Consider the investment projects listed in the table below, all of which have a four year investment life. 0 1 2 3 4 N A -$3,200 0 0 0 $6,300 B -$3,600 1,600 2,800 3,,500 2200 a) What is the simple payback period of each project? C -$2,600 -1,700 -900 4,500 4,500 D -$2,400 -1,100 1,800 2,500 1,500
Q: Suppose the demand for live comedy performance tickets is downward sloping and the supply of live…
A: Setting a minimum and maximum price for a good is the aim of price regulation, which aims to…
Q: South Korea: Bank reserves raised To rein in spending, the Bank of Korea raised the required…
A: The percentage of deposits that authorities mandate a bank maintain in reserves and refrain from…
Q: f workers accurately predict the rate of inflation, is there a short-run trade-off between inflation…
A: Inflation and unemployment are said to have an inverse connection, according to the Phillips curve.…
Q: Suppose the market supply curve is given by: Q=2P-4 and market demand by: 21-1. a) What is the value…
A: Given Supply equation: Q=2P-4 ......(1) Market demand equation: Q=9P-1 ......(2) The…
Q: SCENARIO: Developers of a new housing scheme spend money putting in roads, lighting and clearing…
A: Market failure occurs when the distribution of goods and services in economy is inefficient.…
Q: If the growth rate of real GDP rises from 3% to 4% per year, then the number of years required…
A: Rule of 72 is used to calculate the no. of years it will take to double. Rule of 72 can be…
Q: Determine the rate of return for the following cash flow using trail & error approach with linear…
A: * SOLUTION :- Given that , Year. Revenue. Expenses 0 $0.00…
Q: Suppose that you hold a piece of land in the City of London that you may want to sell in one year.…
A: The exchange rate(E) is rate at which the value of two currencies is exchanged. E is determined by…
Q: Guelph Inc. would like you to assess the after-tax viability of a new machine using annual worth…
A: The Annual Worth method or AW method is defined as a method which implies that all the incomes are…
Q: You borrow $6,000 for 90 days at 6.5% interest. The lender uses a 365-day year. You make a payment…
A: Simple interest refers to the borrowing cost of money without consideration for the effects of…
Q: What is the arithmeti
A: Given return for last six years = 14% - 17 % - 14 % - 20 % - 16 % & 2 %
Q: The kinked demand curve is a non-colluding oligopoly. Explain
A: An oligopoly refers to a form of a market characterized by a lesser number of firms who realize they…
Q: International economics is theory that helps explain how the real world works. Is this statement…
A: The transfer of commodities, services, money, and technological advancements between nations is…
Q: There is a range of prices, Pc/Ps in which Home and Foreign will specialize? Show this range in your…
A: International trade refers to the exchange of goods and services between two or more nations for…
Q: Question 3 The figure shows the housing price (rent) per square foot of houses located at different…
A: Here we are given the total budget of the household as $800 and we are given a graph where we are…
Q: a company purchases an asset for 20000 and plans to keep it for 10 years. of the salvage value is…
A: The sum of years method utilizes the expected life and adds the digits for every year to give the…
Q: The market equilibrium point for a commodity occurs when 3,200 units are produced and sold at Php124…
A: Law of demand states "everything else constant, there exists an inverse relationship between price…
Q: Consider the following simultaneous game: Player 1 U D Player 2 L 30,20 -10, -10 R -10, -10 20,30…
A: Nash equilibrium is where the two player plays their best response and get to a decision. Dominant…
Q: hich of the four panels illustrated below had increased in quantity supplied?
A: The equilibrium means economic condition where the demand and supply are equal. The movement along…
Q: Process X is estimated to have a fixed cost of $35,000 per year and a variable cost of $60 per unit…
A: At break-even point the total cost equals total revenue. There will be no profits at this point
Q: A utility company is considering the following plans to provide a certain service required by…
A: Future Worth provides the compounded values of the present cash flows . FW = ∑ Cash Flow (1+R)n
Q: What is the accumulated amount of a 10-year annuity paying ₱ 10,000 at the end of each year, with…
A: Given Annuity A=10,000 Time interval (n) =10 years Rate of interest (i)=15% Required: Future value…
Q: 2. The consumer has Leontief preferences for two goods and y: u(x, y) = min{2x, 5y}. Pz > 0, Py> 0…
A: Given Utility function: u(x,y)=min2x,5y .....(1) This function is Leontief preferences which…
Q: 7. A gardener sells herbal plants at Php38 per pack, selling all that he harvests. His fixed cost is…
A:
Q: Firms using prerequisites (perks ) along with cash compensation for employees is an example of…
A: Economic cost includes both the explicit cost and the opportunity cost; while the accounting cost…
Q: 14. In a market economy The allocation of scarce resources determines prices and prices in turn…
A: Answer to the question is as follows:
Q: The TLC Yogurt Company has decided to capitalize on the exercise fad and plans to open an exercise…
A: Net Present Value: It is a measure of profitability used in capital budgeting to determine the…
Q: Suppose the fed were to reduce sharply its discount rate from nine percent to five percent, catching…
A: Federal Reserve is an apex financial institution. It has been entrusted with responsibility to…
Q: 10. Which area shows the welfare loss caused by this business, relative to a firm operating at the…
A: Welfare maximizing output level occurs at the intersection of the MC and demand curve. Hence, the…
Q: A mining company CEO wants to help provide college education for the daughter of a high performance…
A: Given First 4 years, (beginning on the fourth birthday) the annual cash flow is $-750. Annual cash…
Q: Study the table below and answer the question that follows. Afghanistan US Carpets 100 500 Fighter…
A: Opportunity cost is the cost of producing one good in terms of other. Opportunity cost is used to…
Q: Consider the following simultaneous move game: Player 1 U M D Player 2 L 2,10 2,5 8,7 C 5,2 11,8 8,4…
A: The Nash equilibrium is best strategy for given strategies of rival firm. A game can have multiple…
Q: In the second half of 2021, Congress passed and President Biden signed into law a $1 trillion…
A: The aggregate supply and aggregate demand model is the one in which the equilibrium level of output…
Q: Some MPs believe that there is a causal relationship between earnings and years of schooling. They…
A: The MPs' assumption that an additional year of education will yield a 25% annual return is not a…
Q: 1.1. The following mathematical equations reflect the performance of the economy and inventory…
A: According to the Keynesian model, the national income is represented as the aggregate demand which…
Q: On the day his grandson was born, a man deposited to a trust company a sufficient amount of money so…
A: Grandson will be receiving an amount of P 10,000 for 5 years starting after the 18th birthday. To…
Q: Price adjust until quantity demanded equals quantity supplied.
A: Competitive market- It refers to to a market where many buyers and sellers meet and they have…
Q: the position of equilibrium output in relation to potential output.
A:
Q: The General Mills Company (GMC) purchased a milling machine for $80,000, which it intends to use for…
A: The yearly cost of owning, using, and maintaining a resource over the course of a resource's life is…
Q: Guelph Inc. would like you to assess the after-tax viability of a new machine using annual worth…
A: * SOLUTION :- Given that, Machine Initial Cost = $1,000,000 The Annual Benefits = $175,000 The…
Q: A real estate company has 18 houses listed for sale by their clients. In how many ways can 3 of the…
A: Permutations and combinations is included in the branch of econometric engineering called…
Q: Which of the following scenarios would result in a decrease in a bank's capital ratio? Check all…
A: The capital ratio of a bank is the percentage of a bank's capital to its risk-weighted assets. A…
Q: A rise in wages would raise cost of production and hence leads to A a fall in the price level. B)…
A: Inflation is the rise in the general price level in the economy. There are two causes of inflation,…
Q: Suppose there are 500 identicsl competitivd firms producing widgets and assume the total cost curve…
A: Profit is referred as the difference between the total revenue and total cost of production . Profit…
Q: Guelph Inc. would like you to assess the after-tax viability of a new machine using annual worth…
A: The annual worth method or AW method implies that all the incomes along with disbursements, regular…
Q: QUESTION 16 Assume that we have the following two alternatives to choose from: • Option A:…
A: Economic profits is = Revenues - Explicit cost - opportunity cost. Accounting profits = Revenue -…
Mm.45.
Trending now
This is a popular solution!
Step by step
Solved in 5 steps
- A firm has the opportunity to invest in a project having an initial outlay of $20,000. Net cash inflows (before depreciation and taxes) are expected to be $5,000 per year for five years. The firm uses the straight-line depreciation method with a zero salvage value and has a (marginal) income tax rate of 40 percent. The firms cost of capital is 12 percent. Compute the IRR and the NPV. Should the firm accept or reject the project?Cori's Meats is looking at a new sausage system with an installed cost of $495,000. This cost will be depreciated straight-line to zero over the project’s five-year life, at the end of which the sausage system can be scrapped for $73,000. The sausage system will save the firm $175,000 per year in pretax operating costs, and the system requires an initial investment in net working capital of $32,000. If the tax rate is 23 percent and the discount rate is 10 percent, what is the NPV of this project?Given the following cash flows for project X and project Y, Year Project X Project Y 0 -55000 -100000 1 20000 15000 2 13500 17000 3 11000 19000 4 10000 25000 5 9000 30000 6 7500 35000 Calculate the NPV, IRR, MIRR and traditional payback period for each project, assuming a required rate of return of 7 percent If the projects are independent, which project(s) should be selected? If they are mutually exclusive, which project should be selected?
- 2.5. An electric cooperative is considering the use of a concrete electric pole in the expansion of its power distribution lines. A concrete pole costs P18,000 each end will last 20 years. The company is presently using creosoted wooden poles which cost P12,000 per pole and will last 10 years. If money is worth 12 per cent, which pole should be used. Assume annual taxes amount to 1 per cent of first cost and zero salvage value in both casesGiven the Given, solution and cash flow diagram. Factory equipment has an initial cost of P200,000. Its salvage value after 10 years is P20,000. AS a percentage of initial cost, what is the straight-line depreciation rate of the equipment? A. 8% B. 6% C. 9% D. 5%An investment in a new piece of equipment costing P 50,000 is expected to yield the following over its 5-year useful life: Revenues (cash), P 40,000; operating costs (cash), P 18,000; depreciation, P 10,000. The present value of P 1 received annually for 5 years and discounted at the cost of capital is 4.10 assuming that all cash flows occur at year-end. Ignoring tax effect, what is the benefit/cost ratio (profitability index) for this piece of equipment?
- Part 1Please calculate the payback period, IRR, MIRR, NPV, and PI for the following two mutuallyexclusive projects. The required rate of return is 15% and the target payback is 4 years.Explain which project is preferable under each of the four capital budgeting methodsmentioned above: Cash flows for two mutually exclusive projects Year Investment A Investment B 0 -$5,000,000 -5,000,000 1 $1,500,000 $1,250,000 2 $1,500,000 $1,250,000 3 $1,500,000 $1,250,000 4 $1,500,000 $1,250,000 5 $1,500,000 $1,250,000 6 $1,500,000 $1,250,000 7 $2,000,000 $1,250,000 8 0 $1,600,000 Part 2 Please study the following capital budgeting project and then provide explanations for thequestions outlined below:You have been hired as a consultant for Pristine Urban-Tech Zither, Inc. (PUTZ),manufacturers of fine zithers. The market for zithers is growing quickly. The company bought some land three years ago for $2.1 million in…Need answers,ASAP 4. a sediment control project in nueva vizcaya requires an initial investment of 145,000, has a salvage value of 22,000 after six years, incurs annual expenses of 10,000, and provides annual revenue of 18,000. using a marr of 10%, determine the aw of this project.You've estimated the following cash flows (in $ million) for two mutually exclusive projects: Year Project A Project B 0 -27 -43 1 30 45 2 40 50 What is the crossover rate, i.e., the discount rate at which both projects have the same NPV? What is project A's NPV at the crossover rate? What is project B's NPV at the crossover rate?
- A proposed project will require the immediate investment of $50,000 and is estimated to have year-end revenues and costs as follows: Year Revenue Costs 1 2 3 4 5 $ 75,000 90,000 100,000 95,000 60,000 $ 60,000 77,500 75,000 80,000 47,500 An additional investment of $20,000 will be required at the end of the second year. The project would terminate at the end of the 5th year, and the assets are estimated to have a salvage value of $25,000 at the time. Solve for the IRR of the project by PW using 15% and 16% rates. A. 15.68% B. 15.28% C. 15.88% D. 15.48%A project requires an initial investment of 45,000$, has a salvage value of 11,000$ after six years, incurs annual expenses of 9,000$, and provides an annual revenue of 16,000$. Using MARR of 10%, determine the AW of this project detailed answer pleaseA fixed capital investment of ₱87,000,000 is required for a proposed manufacturing plant and an estimated working capital of ₱3,000,000. Annual depreciation is estimated to be 11% of the fixed capital investment. Annual revenue is ₱2778,000.What is the payback period (in years) of the proposed manufacturing plant?