Answer:
The Net Present Value (NPV) of this project is <u>$93,405.59</u>.
Explanation:
Note: Find attached the excel file for the calculation of the NPV of this project.
Net present value (NPV) refers to the present value of cash inflows minus the present value of cash outflows over a specified period of time.
On its own, present value (PV) refers the value that a future sum of money or stream of cash flows has now or currently given a specified rate of return. The formula for calculating the PV is given as follows:
PV = FV / (1 + r)^n
Where,
FV = Future value
r = discount rate. This is given as 10% in this question
n = Relevant period, e.g. year
The above explanation and formula together with other stated formulae in the attached excel file is used in calculating the NPV of this project.
Answer:
C
Explanation:
Based on the scenario being described within the question it can be said that FL Systems Inc. will find it harder than Oryxo Systems Inc. to attain competitive advantage. This is mainly due to the fact that FL Systems Inc. has a large percentage of their money locked in intangible assets. These are assets that cannot be touched or physically used by the customers which makes it very difficult for customers to see the potential value which ultimately hurts their competitive advantage.
Answer:
$415,000
Explanation:
Following is the formula for cash flow:
<em>Ending Cash Balance = CFO + CFI + CFF + Beginning Cash Balance</em>
<em>CFO = Cash flow from operating activities</em>
<em>CFI = Cash flow from investing activities</em>
<em>CFF = Cash flow from financing activities</em>
We can easily rearrange the formula to find CFO
<em>Ending Cash Balance - CFI - CFF - Beginning Cash Balance = CFO </em>
<em>or </em>
<em>CFO = Ending Cash Balance - CFI - CFF - Beginning Cash Balance</em>
<u>Solution</u>
<em>CFO = $415,000</em>
Answer:
(a) $7; $205 million
(b) $9; $195 million
(c) $400 million
(d) $390 million
(e) Loss = $10 million
Explanation:
(a) Price paid by consumers when no tariff imposed:
= Marginal cost + Distribution cost
= $6 + $1
= $7
Quantity demanded:
Q = 240 - 5P
= 240 - 5 × $7
= 240 - $35
= $205 million pounds
(b) At imposed tariff of $2 per pound, then the new price paid by consumers:
= Marginal cost + Distribution cost + Tariff
= $6 + $1 + $2
= $9
New quantity demanded:
Q = 240 - 5P
= 240 - 5 × $9
= 240 - $45
= $195 million pounds
(c) Lost consumer surplus:
= ($9 - $7)($195) + (0.5)($9 - $7)($205 - $195)
= ($2 × $195) + (0.5 × $2 × $10)
= $390 + $10
= $400 million
(d) Tax revenue collected by government:
= Quantity demanded under tariff × tariff
= $195 × $2
= $390 million
(e) Tax revenue of $390 million received is less than the value of coffee sold under tariff $400 million.
Loss = $400 million - $390 million
= $10 million
Answer:
b. 0.77
Explanation:
The formula to compute the loan to value ratio is shown below:
= Loan amount ÷ Purchase price
= $1,000,000 ÷ $1,300,000
= 0.77
It shows a relationship between the loan amount and the purchase price so that the accurate ratio can come
All other information that is given is not relevant as it is related to the debt yield ratio. Hence, ignored it
