Not available for individual investors hola
Answer:
(a) What is the net present value of this potential investment?
Net present value of Investment is $(3,903)
(b) Should you invest in this machine?
We should not invest in this investment because Net present value of this investment is negative by discounting Minimum acceptable rate of return.
Explanation:
Present Values:
Revenue $144,146
O&M Cost ($48,049)
Initial Investment <u>$(100,000)</u>
Net Present value $(3,903)
Working :
Present Value Calculation = P x ( (1- ( 1 + r )^-10) / r
Revenue = $21,000 x ( (1- ( 1 + 0.075 )^-10) / 0.075 = 144,146
O&M Costs = $7,000 x ( (1- ( 1 + 0.075 )^-10) / 0.075 = 48,049
Answer:
A
Explanation:
Because there are plenty of suppliers for some goods, the food truck owner is more powerful in this case than the suppliers. Here the power of suppliers is low
For the other goods with only a single supplier. the supplier has more powerful than the taco seller. here the power of supplier is high. If the supplier increases price, the taco seller would most likely have an inelastic demand and would be at the mercy of the supplier
thus, the power of suppliers is relatively high for some items and relatively low for others.
