Relatively unknown events are best marketed through

Fuente, Inc., has identified an investment project with the following cash flows. Year Cash Flow 1 $ 950 2 1,180 3 1,400 4 2,140

Anon25 [30]

Answer:

$6,225.08

Explanation:

The computation of the future value of these cash flows in year 4 is shown below:

= Year 1 cash flow × (1 + interest rate)^year + Year 2 cash flow × (1 + interest rate)^year + Year 3 cash flow × (1 + interest rate)^year + Year 4 cash flow × (1 + interest rate)^year

= $950 × 1.08^3 + $1,180 × 1.08^2 + $1,400 × 1.08^1 + $2,140

= $950 × 1.259712 + $1,180 × 1.1664 + $1,400 × 1.08 + $2,140

= $1,196.7264 + $1,376.352 + $1,512 + $2,140

= $6,225.08

3 0

3 years ago

Those aspects of business that a retailer can directly affect are referred to as ________.

Alexeev081 [22]

Those aspects of business that a retailer can directly affect are referred to as controllable variables. Generally speaking, strategy, marketing, finances, human resources, technology and equipment, and operations make up the six functional areas of business management. As a result, all business planners should focus on thoroughly investigating and comprehending these topics as they apply to the specific business.

The book All Aspects of the Business/Organization lists nine characteristics that apply to all businesses. The book All Aspects of the Business/Organization lists nine characteristics that apply to all businesses. For success, learners should practice and comprehend the related ideas and abilities.

To learn more about business, click here.

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5 0

1 year ago

You are thinking about buying a piece of art that costs $ 20 comma 000. The art dealer is proposing the following deal: He will

Irina-Kira [14]

Answer:

Explanation:

This is an annuity question. You can solve this using a financial calculator with the following inputs;

Present value ; PV = -20,000

Duration; N = 15 payments

2 year interest rate; I = [(1.07)^2 ] -1 = 14.49%

One-time future cashflow; FV = 0

Then compute recurring payment ; CPT PMT = $3,336.28

Therefore, you'll pay $3,336.28 every 2 years

3 0

3 years ago

a. Suppose that banks have decided they need to keep a reserve ratio of 10%—this guarantees that they’ll have enough cash in ATM

d1i1m1o1n [39]

Answer:

A. The money multiplier is the amount of money supply with each dollar increase in reserves. so, it is correct.

b.- Since there is an inverse relationship between the reserve ratio and the money multiplier, a higher reserve ratio leads to a lower money multiplier. So increase the ratio and lower the money.

7 0

3 years ago

Firm A has 11 equally risky capital budgeting projects, each costing $29.608 million and each having an expected rate of return

Vanyuwa [196]

Answer:

How much capital should Firm A raise and invest?

$296.08 million should be raised and invested in projects.

Explanation:

WACC = 8% when A's retained earnings breakeven point = $296.08 million

Expected rate of return = 8.25%

WACC is less than expected rate of return.

Therefore, WACC is less than expected rate of return, which is beneficial, since cost of capital is less than expected rate of return.

therefore, $296.08 million should be raised.

If the firm A raises, more than $296.08 million, WACC would be increasing to 8.5%, this is greater than the expected rate of return i.e. 8.25%.

Hence raising amount more than $296.08 million will not be beneficial.

Hence it is clear that amount which should be raised and invested =$296.08 million.

Investment required in one project=$29.608 million.

Number of projects which can be started =$296.08/$29.608 =10 projects

All are equally risky therefore it does not matter which project should be left.

Hence, $296.08 million should be raised and invested in projects.

5 0

3 years ago