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koban [17]
3 years ago
8

Assume a company has a cost of capital that is greater than zero and has cash flows related to the changes in net working capita

l as follows: Year 0 = -10,000, Year 1 = +4,000, Year 2 = +4,000, Year 3 = +2,000 Given the above information, if NWC requirements doubled (i.e. each year's NWC were twice as much), what would be the impact on NPV? O A Decrease B. Increase c. No impact The information provided is insufficient to make a decision.
Business
1 answer:
Otrada [13]3 years ago
7 0

Answer:

A. Decrease

Explanation:

In investment appraisal with the method of Net Present Value, the bone of contention and the central matter is the TIME VALUE OF MONEY.

In the above scenario, the initial working capital was 100% released in proportions of 40%, 40% and 20%, throughout the 3 years of the project. However, if the reverse had been the case, i.e. parting with more cash now and the requirement of working capital now becomes: Year 0 = -10,000, Year 1 = - 10,000, Year 2 = -10,000, Year 3 = +30,000; the NPV would definitely shrink because the value of 10,000 each in Years 0-2 would not be the same when it is recovered from the project in year 3. The value will be smaller and hence the NPV of the project would have decreased as a result of the time value of money.

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Roadtec Tire Company has a corporate culture that emphasizes an internal focus on the involvement and participation of employees
Otrada [13]

Answer: (D) Involvement culture

Explanation:

 According to the given question, the involvement culture is one of the type of corporate culture that helps in focusing the various types of internal functions such as the involvement and also the participation of the employees in an organization.

The road-tech tire is one of the company that possess the involvement corporate culture for its family like environment and caring nature for the employees.

The main advantage of the involvement culture is that it helps in reduce the stressful environment of an organization and also providing the various types of economical and social based benefits.

 Therefore, Option (D) is correct answer.

5 0
3 years ago
Jamie received a bonus of $3,000. She decided to deposit the money in a savings account that earns 3.5% compounded daily for 180
alex41 [277]

The compound amount recieved by Jamie after 180 days is $1,466,844.98

Explanation:

We know that money in any sort of banking account earns interests in a compounding manner.

Amount at the end of time “x” is given by A= P(1+R/100) ˣ

Where A= amount after the said time period

P= Principal

R= Rate  

x= time period

One must note that “x” and “R” must be in same time-frame i.e. if the rate is compounded daily, time period must be considered daily and so on.

Substituting the values of P as $ 3000, R as 3.5%, and x as 180

Amount after 180 days= 3000 (1+3.5/100) ¹⁸⁰

Amount= $1,466,844.98

Thus, the amount is $1,466,844.98

7 0
3 years ago
Which is TRUE regarding the trade-off a firm makes when it spends money on an investment project? A. The trade-off a firm faces
luda_lava [24]

Answer:

A. The trade-off a firm faces when using retained earnings or borrowed funds is the same.

Explanation:

  • A trade-off is based on the situational decisions that usually involve the loss of quality and a property that is set or designed to give a return in the other aspects.
  • As one part has to increase and the other has to decrease. The trade-off is commonly expressed as in the terms of opportunity costs which states the loss of the best alternative.
3 0
4 years ago
What strategy should you use while communicating with employees from other cultures
Alik [6]
Understand culture diversity( ◠‿◠ )
8 0
4 years ago
Which statement is the converse of the given statment
pochemuha
Might seem controversial though :) but I am pretty sure that the correct variant that properly shows the converse of given statement is the third one. As you know, the converse (in plane language) has the same meaning of the statement just by replacing two points. This statement has positive tone (if you make - you ll have) so it's directly coincides with C(you have, cause you have made)
4 0
3 years ago
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