Answer: c. greater because interest rate changes have a greater impact on distant cash flows than near-term cash flows.
Explanation:
Interest rate changes have a greater impact on distant cashflows because those cashflows will be exposed to the interest rates for longer. This means that they will be subjected to more discounting than a cashflow that is due in one year which would be subject to only a single year of discounting.
For instance, assume the required rate of return for two investments is 10%. One investment yields $10,000 in 20 years and another yields $10,000 in 2 years .
The present value of both are:
= 10,000 / (1 + 10%)²⁰ = 10,000 / ( 1 + 10%)²
= $1,486.43 = $8,264.46
<em>Notice the difference. The longer term investment was more exposed to interest rate effects. </em>
Answer:
A base salary of $500,000 plus a stock option package for 250,000 shares, with 20% of shares maturing at the end of each of the next five years
Explanation:
This options will force the employee to stay in the firm for at least 5 years
Also it will tie his contribution to the market share
So their interest will be alinged with the company's interest of increasing his value and project better earnings through the five years program.
Answer:
I use coffee daily. The supply for the coffee I bought (Colombian Coffee) is few then the price is expensive. As the price is expensive I can only buy 2 pounds of this item per month. My demand is affected for the price that producers set to this coffee. I would like to buy more but then the supply of this product is limited therefore the prices will always be high.
Answer:
False
Explanation:
If an investment project can be repeated, i.e. its life cycle can be extended by reinvesting, the NPV of the project will change.
When considering two mutually exclusive projects, the NPV method should always be considered before the IRR as a means of evaluating which project should be carried out.
Answer:
To ,
The Concern specialists/Editor/Citizens
Subject: To Generate Cash for social assistance right now tempest and debacle .
Dear partners ,
We are confronting an incredible test to loss of our home and harms to our infrastructural improvement . As, I am another business visionary . I wish to contribute cash to greatest individuals with the goal that they can fix their home. This can not be conceivable without your important commitment and backing. I demand each resident , understudies, clients of treats, specialists and so forth to contribute wilfully at all you wish to do right now cause and at the hour of crisis.
Looking for your gifts and an important commitment.
Yours Sincerely,
SALLY
Proprietor AND SOLE PROPRIETOR
CALIFORNIA COOKIES
USA
