1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
djverab [1.8K]
3 years ago
6

A company is evaluating an investment which has an initial investment of $4,000. Annual net cash flows is expected to be $2,000

over the next three years. The company requires a 10% annual return. The present value of an annuity factor for 10% and 3 periods is 2.4869. The present value of $1 factor for 10% and 3 periods is 0.7513. The net present value is (round your answer to the nearest whole dollar).
Business
1 answer:
uysha [10]3 years ago
4 0

Answer:

The NPV of the project is $974.

Explanation:

The net present value is the today's value of a stream of cash flows. The net present value will be the sum of all the expected future cash flows from a project less the initial investment required for the project and it is used to evaluate the investment decisions.

The net present value of an investment project will be:

NPV = CF1 / (1+r) + CF2 / (1+r)^2 + ... + CFn / (1+r)^n - Initial investment

or

If the cash flows are constant or of same amount through out, occur after the same interval of time and are for a defined period of time, they become an annuity and the NPV of such a project can be calculated by,

NPV = (Cash flow per period * Present value of Annuity factor) - Initial cost

The NPV of this project will be = (2000 * 2.4869) - 4000 = 973.8 rounded off to $974

You might be interested in
How can you tell if you linked a account on your Xbox?
slega [8]

Answer:

if you get random payments like games or other things u didn't pay for

4 0
3 years ago
West Corp. issued 25-year bonds two years ago at a coupon rate of 5.3 percent. The bonds make semiannual payments. If these bond
Nataliya [291]

Answer:

YTM is 4.94%

Explanation:

The  yield  to maturity is the return on the bond throughout the bond's tenure and can be computed using rate function in excel as shown below.

=rate(nper,pmt,-pv,fv)

nper is the number of coupons the bond has left to pay(23 years*2)

pmt is the semiannual coupon of the bond=$1000*5.3%*6/12=26.5

pv is the curren price=$1000*105%=$1050

fv is the face value of the bond

=rate(46,26.5,-1050,1000)=2.47%

2.47% is the semiannual yield

annual yield=2.47% *2=4.94%

7 0
3 years ago
Which statement is true of entrepreneurs?
strojnjashka [21]

Entrepreneurs are people that make their own business. Most businesses tend to have a rough start and can possibly even fail. It depends on how the person creating the business acts and how determined they are to make the business flourish. Although many rich people may of started off of just one product that got advertised well and was sold quickly. Even if it isn't a product but more so a service, you can be very successful. Just know what the people want.

Hope this helped!


3 0
3 years ago
Read 2 more answers
) ________ are likely a fixed cost of a firm. A) Wages paid to employees B) The payments for supplies C) Lease payments for offi
aev [14]

Answer:

C) Lease payments for office space

Explanation:

The fixed cost is the cost that remains fixed whether the production level changes or not

So as per the given choices, the option c would be selected i.e. lease payment made for office space as it would be independent with respect to the quantity generated also it would be paid even there is no production take place

Therefore the option c is correct

7 0
3 years ago
For a closed economy, GDP is $11 trillion, consumption is $7 trillion, taxes are $2.5 trillion and the government runs a surplus
alina1380 [7]

Answer:

A. $1.5 trillion and $2.5 trillion, respectively

Explanation:

Given that

GDP = 11 Trillion

Tax = 2.5trillion

C = 7 trillion

Recall that

Private Savings = Disposable Income - Consumption

Disposable income = GDP - Tax

= 11 - 2.5

= 8.5

Private savings = 8.5 - 7

= 1.5 trillion.

National Savings = Private Savings + Budget balance

Given that

Budget balance = 1 trillion

Therefore,

National Savings = 1.5 + 1

= 2.5 trillion.

6 0
4 years ago
Other questions:
  • The Baldwin company will sell 100 units (x1000) of capacity from their Bid product line. Each unit of capacity is worth $6 plus
    15·1 answer
  • John and Audrey have been married for twenty years. Throughout their marriage, John worked at ABCD Company, a corporation that m
    11·1 answer
  • The long-run market supply curve in a competitive market will
    14·1 answer
  • Which two were weaknesses of the Articles of Confederation?
    8·1 answer
  • Leftown is a former guest who owes the Munchies Restaurant $750 for a banquet. Restaurant managers have determined that this deb
    11·1 answer
  • In a closed economy, saving and investment must be equal, but this is not the case in an open economy. In the following problem,
    15·1 answer
  • Seether Co. wants to issue new 15-year bonds for some much needed expansion projects. The company currently has 10.6 percent cou
    8·1 answer
  • What is a savings and loans bank? advantages and disadvantages.​
    11·1 answer
  • Explain the term economic activity
    12·1 answer
  • Using the interest method, the journal entry to record the first interest payment and the related amortization for bonds issued
    11·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!