a) Your firm is contemplating two investment projects at a discount rate of 10 percent. The first project anticipates a profit of $100,000 in each of the next four years while the second project anticipates a profit of $75,000 in each of the next six years. As the investment manager, you need to advice and then explain to the top management which project your firm should undertake.   b) Using relevant illustration, describe the “Time Value of Money” concept and its significance for managers’ decision making. Do you think this concept is applicable for Muslim managers? Explain your answer

Q: Express the term benefits and costs in monetary units?

A: Benefits and costs in monetary units are those costs and benefits of any investment or projects whic...

Q: Why does CPI not take into account the changing behavior of the consumer?

A: The CPI is the consumer price index. It measures the weighted average price of a basket of consumer ...

Q: Is the consumer price index a good measure of the general price increase of consumers? How?

A: The consumer price index is an extensive measure utilized for estimation of value changes in a bit o...

Q: James Hogan is purchasing a $30,000 automobile, which is to be paid for in 48 monthly installments o...

A: The effective rate of interest is the return on a savings account or an investment, whose interest i...

Q: Indicate whether the statement is true or false, and justify your answer.Health status earlier in li...

A: Answer: True, health status earlier in life is indeed a good predictor of wealth later in life. Acco...

Q: What are the Effects of Inflation on Project Cash Flows?

A: Answer: Inflation refers to the increase in the average price level of different goods and services....

Q: The Hewl-Pact Company produces a popular printer than prints over 100 pages per minute. It recently ...

A: The printer which is capable to produce 100 pages per minute will have higher demand only in offices...

Q: Consider the following. Demand Function   p=(200/x^2)+2 Quantity Demanded x = 5 (a).Find the p...

A: The price elasticity of demand is 0.63. The minus sign shows the negative relation between the price...

Q: What is the Make-or-Buy Decision?

A: Total Revenue: The term revenue refers to the amount that is received by selling goods and services....

Q: How does the bank offer two repayment plans?

A: Loan repayment is an act followed by the borrower to pay back the borrowed amount to the lender. The...

Q: Define the term PW Analysis?

A: The present worth (PW) of present value (PV) is defined as a current value which is related to a fut...

Q: Consider a project that will bring in upfront cash inflows for the first two yearsbut require paying...

A: The given information is as follows.  

Q: Define productivity efficiency and allocative efficiency. What conditions must be met in order to ac...

A: Productive efficiency takes place when production of the optimal combination of output is achieved b...

Q: Show the relationship between production function and cost function

A: Production function refers to the quantities of a physical product to the quantity of factors of pro...

Q: Describe a decision your company has madewhen facing uncertainty. Compute the expectedcosts and bene...

A: Decision with uncertainty based on the probability. Higher the probability the higher will be the ch...

Q: Define the term short-term investments?

A: The investment is a practice of investing money with the expectation of some future benefit or futur...

Q: What are the Guidelines for Selecting a MARR?

A: The MARR is the expected minimum profit that an investor makes from an investment.  It is also calle...

Q: Consider a five-year MACRS asset, which can be purchased at $80.000. Thesalvage value of this asset ...

A: The total accumulated depreciation for three years MACRS can be calculated as follows.  

Q: A Texas chemical company had to file for bankruptcy because of a nationwide phaseout of methyl terti...

A: (a) Investment (I) is $50,000,000. Interest rate is 2% per month compound continuously. Time period ...

Q: What is the cost basis of an asset?

A:  The original value of an asset which is often the purchase price is called Cost basis. It is adjus...

Q: Give an example to explain the Break-Even Analysis?

A: The Break-even analysis refers to finding a level or a point at which total cost is equal to total r...

Q: Economics Question

A: Hello, thank you for the question. Since there are many subpart questions posted here, only the firs...

Q: When performing engineering economic analysis, how can the appropriate price indices be selected? Gi...

A: Meaning of Price Indices: Price indices (PI) measures relative price changes, consisting of series o...

Q: Describe the Profitability Analysis?

A: Profitability analysis is a tool used by the firm to analyze cost and revenue to know whether the fi...

Q: Can we compare the linear-log model and the log-log model? Which of the log regression models best f...

A: The log-log model and linear-log model differs only in the functional form of dependent variables. I...

Q: What is a monotonically decreasing function of interest rate?

A: Monotonic functions are always Increasing or decreasing in nature, It means the value of function de...

Q: Define the term inventories?

A: Inventories refer to the stock of goods of a firm or business.

Q: According to your graph, the equilibrium value of money is (0.25, 0.50, 0.75, 1.00) therefore the eq...

A: The table can be filled as follows.

Q: How can we o determine the extent to which borrowed funds havebeen used to finance assets?

A: Borrowed funds are those funds which business borrows either to finance their assets or to use as wo...

Q: Indicate whether the statement is true or false, and justify your answer.To date, no major health in...

A: A market is a place where the buyers and sellers interact with each other and the exchange of goods ...

Q: Define the term the economic evaluation of investment projects?

A: The aim of any business is to earn the highest possible profit. The investment made by any business ...

Q: How can we assess whether a given set of instruments is valid or not?

A: We can assess whether the given set of instruments is valid or not using the following Criterion:   ...

Q: Use the firm's long-run cost-minimizing decision rule to explain the differences in the relative use...

A: The long-run cost-minimizing decision rule guides a firm in selecting the optimum mix of factor inpu...

Q: What is the meaning of Net Present Worth?

A: The net present worth also known as the net present value calculated the difference between the pres...

Q: Three different plans were presented to the GAO (General Accounting Office) by a high-tech facilitie...

A: Plan A: the initial cost (C) is $1,000,000 per year.   plan B: it is a two-year contract. The cost (...

Q: What do the Secondary regional benefits may include?

A: Sometimes, the country provides the economic benefits to some regions in the country by providing th...

Q: How can we determine the economic service life of the asset?

A: The asset is the any useful or valuable commodity that is owned by an individual in the economy. The...

Q: Define the term future inflation?

A: Inflation is the process of increasing the overall general price level in the economy in a given per...

Q: Cigarette manufacturers were among the first companies to advertise extensively on television. Older...

A: The players are the companies/firms.  Move is the action that is taken by the companies either to ad...

Q: Which of the following is an example of active fiscal policy? Government expenditures rise during ...

A: When the president and congress willingly attempt to change the course of economy through changes in...

Q: Rosalind won $1000 cash in a lucky draw. Find her marginal propensity to consume if she spent $600 o...

A: Marginal propensity to consume(MPC) calculates the proportion of extra income which is spent on cons...

Q: What are the Dividends and Retained Earnings?

A: Total Revenue: Total revenue exhibits to the money that is received by selling the commodities. It c...

Q: What are some of the major factors affecting the stock price?

A: The six factors that affect the stock option prices are: 1) Underlying Price: The current stock mark...

Q: What are Direct Materials?

A: Direct materials are the physical items that are used in the manufacturing process to produce the ou...

Q: Compute the annual-equivalence amount for the following cash flow series ati = 10%:

A: Answer: Given values: Note: Net cash flow = Inflow of cash – Outflow of cash (Outflow is represente...