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Andrej [43]
2 years ago
13

You want to start a business that you believe can produce cash flows of $44,000, $61,000, and $80,000 at the end of each of the

next three years, respectively. At the end of three years you think you can sell the business for $200,000. At a discount rate of 9.7 percent, what is this business worth today
Business
1 answer:
madam [21]2 years ago
5 0

The present worth of this business it has been calculated is given as $302,898.

How to solve for the worth of the business

<u>In the first year</u>

Cash flow = 44000

PVF at 9.7% = 0.91158

The present value = 0.91158 * 44000

= $40106

<u>In the second year </u>

Cash flow =  $61,000,

PVF at 9.7%  = 0.83097

The present value = $50689.17

<u>In the third year</u>

Cash flow = $80,000

PVF at 9.7% = 0.7575

The present value = $60600

<u>In the 4th year </u>

Cash flow = $200,000

PVF at 9.7% = 0.7575

The present value = $151,500

The worth of the business today is going to be the sum of all the present values

=  $151,500 + $60600 +  $40106.52 + $50689.17

= $302,898

Read more on present value here: brainly.com/question/20813161

#SPJ1

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larisa [96]

Answer and Explanation:

True

3 0
3 years ago
(−2,6) and (−12,2)? Write your answer in simplest form.
Naily [24]

The addition of the decimal number that's given will be -14.8

<h3>How to calculate the decimals?</h3>

It should be noted that decimal numbers are the numbers that have a whole number and the fractional part is separated by a decimal.

In this case, the addition will be:

= -2.6 + (-12.2)

= -2.6 - 12.2

= -14.8

In conclusion, the correct option is -14.8.

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brainly.com/question/1827193

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8 0
2 years ago
Yasmin Co. can further process Product B to produce Product C. Product B is currently selling for $33 per pound and costs $28 pe
Lyrx [107]

Answer:

Differential cost of producing Product C = $0

Explanation:

<em>A company should process further a product if the additional revenue from the split-off point is greater than than the further processing cost.  </em>

<em>Also note that all cost incurred up to the split-off point (the cost of crushing) are irrelevant to the decision to process further .  </em>

                                                                                                   $

Sales revenue after the split off point (Product C)                    58

Sales revenue at the split-off point  (Product B                        <u> 33</u>

Additional sales revenue per unit                                              25

Further processing cost                                                            <u>  (25)</u>

Differential cost of Product C                                                       <u>  0</u>

Differential cost of producing Product C = $0

<em> Note that the cost incurred up until the split off point was not included because it is Irrelevant to the decision to process further. It has already been incurred , hence it is a sunk cost</em>

6 0
3 years ago
If he devotes all of his available resources to cantaloupe production, a farmer can produce 120 cantaloupes. If he sacrifices 1.
MrMuchimi

Answer:

C. His opportunity cost of one watermelon is 2/3 of a cantaloupe.

Explanation:

Opportunity cost refers to units of production sacrificed of one good to produce an extra unit of another good.

In the given case, for every 1 unit of Cantaloupe, a farmer is required to sacrifice the production of 1.5 units of watermelon.

This means, production of 1 cantaloupe = production of 1.5 water melons.

Thus, to produce an additional unit of watermelon, sacrifice of 1/1.5 cantaloupe is required.

This means, the farmer's opportunity cost of one watermelon in the form of cantaloupe sacrificed is 2/3 of a cantaloupe.

6 0
3 years ago
The price elasticity of demand measures the:A. responsiveness of quantity demanded to a change in quantity supplied.B. responsiv
gulaghasi [49]

Answer:

C. responsiveness of quantity demanded to a change in price

Explanation:

Price elasticity of demand is a measure of the sensitivity of demand for a good or service to changes in the price of that product. We say that the price elasticity of demand is elastic when a percentage change in the price of this good has major impacts on demand. On the contrary, we say that the price elasticity of demand is inelastic when variations in the price of goods have little or no influence on demand.

6 0
3 years ago
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