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QveST [7]
3 years ago
6

Consider the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B) 0 –$218,917 –$16,419 1 25,700 5,985 2 5

3,000 8,370 3 58,000 13,931 4 420,000 8,655 Whichever project you choose, if any, you require a 6 percent return on your investment. What is the IRR (in %) for Project A?
Business
1 answer:
Kryger [21]3 years ago
5 0

Answer:

The IRR (in %) for Project A is 31%.

Explanation:

Let IRR be x%

At IRR, present value of inflows = present value of outflows.  

218917 = 25700/1.0x + 53000/1.0x^2 + 58000/1.0x^3 + 420,000/1.0x^4

solving for x, we find:

x = 31%

Therefore, The IRR (in %) for Project A is 31%.

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According to a study conducted by an​ organization, the proportion of americans who were afraid to fly in 2006 was 0.10. a rando
faust18 [17]

Answer:

This is not necessarily evidence that the proportion of Americans who are afraid to fly has  decreaseddecreased  because belowbelow  0.10 because the proportion of sample, is nothing very close to 0.10.

Explanation:

n = 1100

p = 0.10

Using the formula np(1-p), we will have

= 1100(0.10)*(1 - 0.10)

= 1100*0.10*0.90

= 99

99 ≥ 10

This satisfies normal distribution condition. That is, proportion of sample are normally distributed.

3 0
3 years ago
Elc inc. is an electronic appliances manufacturer that has many strategic business units (sbus), among which, television and com
Sedbober [7]

Answer:

The answer is multi-divisional structure.

Explanation:

A company employing multi-divisional structure would usually function as a parent company that has many business units under it operating different business sectors. This is clearly the case of Elc Inc., since it both manufactures televisions and computers. The fact that both businesses share the same budget shows that the two business units are still operating in the same company.

4 0
3 years ago
One of your employees has performed well this year. At performance appraisal time, she asks you about how raise and bonus amount
mr Goodwill [35]

Answer:

The best method of distributing the resources is Equity.

Explanation:

Under the equity method of distribution, the resources are paid on the basis of their performance. This method focuses on the performance of the employees. More the hard work more will be the bonus. It is a fair method of distribution of resources.

5 0
3 years ago
5,000 7.5 percent coupon bonds outstanding, $1,000 par value, 19 years to maturity, selling for 105 percent of par; the bonds ma
vitfil [10]

Answer:

10.53%

Explanation:

WACC = wE*rE + wP*rP + wD*rD(1-tax)

<u>Market values;</u>

Debt = 1.05 *5,000*1000 = 5,250,000

Preferred stock = 15,500 *107 = 1,658,500

Common equity = 105,000 *63 = 6,615,000

Total market value = 13,523,500

wE = 6,615,000/ 13,523,500 = 0.4891

wP= 1,658,500/13,523,500 = 0.1226

wD = 5,250,000/13,523,500 = 0.3882

<u>Cost of capital;</u>

Cost of common equity, rE using CAPM;

rE = 0.06 + (1.13*0.09) = 0.1617

rE = 16.17%

Cost of preferred stock = 6%

Cost of debt

using a financial calculator, input the following; N= 38, PV = -1050, PMT = 37.5,

FV =1000, then CPT I/Y = 3.51% . So annual rate = 3.51% *2 = 7.02%

WACC = (0.4891*0.1617) +(0.1226* 0.06) + [0.3882 *0.0702(1-0.31)]

WACC = 0.0791 + 0.007356 + 0.0188

WACC = 0.1053 or 10.53%

4 0
3 years ago
Harvey Rabbitt pays for monthly cable TV service. Last​ week, the cable company informed Harvey that his monthly cable price wou
hichkok12 [17]

Answer:

The company pass from monopoly to a competitive market.

The new companies increase the supply and therefore, the equilibrium price decreases.

Explanation:

The approval of new cable companies generates an increase in the supply. As the suply shift to the right the quantity (people wiht a monthly cable service) will increase and the price (monthly fee) decrease.

Harvey's Company is already starting to decrease his price to do an effort to retain his customer. This company is no longer a monopoly so it will decrease price to be more competitive.

8 0
2 years ago
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