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Illusion [34]
2 years ago
12

Shenandoah Springs Company is considering two investment opportunities whose cash flows are provided below:

Business
2 answers:
Sunny_sXe [5.5K]2 years ago
8 0

Answer:

PV Index = 1.158

Explanation:

Present value index is the ratio of discounted cash flows of the project divided by initial outlay required for the project thus first we calculate the Present Values for Investment B

Present value factors @ 12% for year 0, 1, 2, 3, 4 respectively.

1

0.893

0.797

0.712

0.636

Net Present Value = -9000 + (5000 * 0.893) + (4000 * 0.797) + (3000 * 0.712) + (1000 * 0.636)

NPV = $1425

Present value Index = NPV / Initial investment = 1425/9000 = 0.158

This can be interpreted as 1 + 0.158 = 1.158,

1 being the initial investment. You can also choose not to subtract the initial outlay when calculating NPV.

Hope that helps.

krok68 [10]2 years ago
5 0

Answer:

Consider the following calculations

Explanation:

We need to work out the net after tax cash flows for each of the five years of the project, which are calculated as follows:

Net annual cash flows = annual cash inflows – annual cash outflows

INVESTMENT A = 15000- (5000+5000+5000+4000) = -4000

INVESTMENT B = 9000- (5000+4000+3000+1000) =-4000

HURDLE RATE = 12 %

The present value factor for 4 years annuity is 3.0373

INVESTMENT A

Present value of future net cash flows = 3.0373* $4000 = $12149.39

INVESTMENT B

Present value of future net cash flows = 3.0373* $4000 = $12149.39

HENCE PRESENT VALUE IS GREATER THAN INITIAL FLOW.. HENCE IT SHOULD BE ACCEPTED

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2 years ago
Among the states, the law governing limited liability companies is far from uniform because Group of answer choices a limited li
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Answer: State limited liability company statutes vary from state to state.

Explanation:

States are able to pass their own laws regarding the treatment of certain things within a state and limited liability companies are one of them.

The states have different corporate values and therefore will pass different laws to treat limited liability companies based on these values. These laws and statutes will therefore by extension, vary just as the values vary.

For this reason, the law governing LLCs in the different states is not uniform.

5 0
3 years ago
Dallas Boot Corporation has been asked to submit a bid on supplying 1,000 pairs of military combat boots to the Armed Forces Tra
Kipish [7]

Answer:

Dallas Boot Corporation

Assuming that there would be no commission on this potential sale, the lowest price the firm can bid is some price greater than:_________

= $20.

Explanation:

a) Data and Calculations:

Pairs of military combat boots on the bid = 1,000

Direct material                                     $8

Direct labor                                            6

Variable overhead                                3

Variable selling cost (commission)      3

Fixed overhead (allocated)                  2

Fixed selling and administrative cost  1

Total cost of production and sales $23

Less commission                                 3

Total cost per boot                         $20

b) The bidding price less sales commission will be a price that is greater than $20 per boot.  The extra amount per boot will cover the profit expected from the transaction.

7 0
2 years ago
As distances between buyers and sellers increase, problems related to operations performance increase. What are the primary resu
timama [110]

As distances between buyers and sellers increase, problems related to operations performance increase.

The primary results of this increase in distance and geographic complexity are:-

  • Security issues
  • Potential for delays and disruptions
  • Increase in lead time

A seller is a person or entity that sells products, services, or financial assets. Shorting means borrowing security you don't own, selling it, and buying it back at a lower price. An option seller is called a "writer" who collects a premium from the buyer.

A seller's market is the opposite of a buyer's market, and excess inventory for interested potential buyers means that the buyer has the power to set terms and prices.

Learn more about sellers here:brainly.com/question/906651

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4 0
1 year ago
Acme Company has variable costs equal to 30% of sales. The company is considering a proposal that will increase sales by $12,000
mina [271]

Answer:

$0

Explanation:

The net income is the difference between the sales and total cost which comprises of the variable cost and fixed cost. The sales and variable cost are dependent on the number of units sold.

Let

u = number of units

s = selling price per unit

v = variable cost per unit

F = Fixed cost

I = Net income

I = su - F - vu

but vu = 0.3su

Hence

I = su - 0.3su - F = 0.7su - F

Given that the proposal will increase sales by $12,000,

New sales = su + 12000          ( in $)

and total fixed costs by $8,400

New fixed cost = F + 8400

New variable cost = 0.3( su + 12000) = 0.3su + 3600

New net income = su + 12000 - 0.3su - 3600 - F - 8400

= 0.7su - F

New net income is same as the old net income hence no increase.

4 0
3 years ago
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