Answer:
d. Choose Option B because it has a higher NPV
Explanation:
The computation is shown below:
For Option A:
Investment = $10 million
Present Value of cash flows = Cash flow ÷ Discounting rate
= $2 ÷ 10%
= $20 million
Now
NPV = $20 - $10
= $10 million
We know that
IRR is the rate at which the NPV will be zero
So, 2 ÷ r - 10 = 0
r = 20%
For Option B:
Investment = $50 million
Present Value of cash flows = $6.5 ÷ 10% = $65 million
NPV = $65 - $50 = $15 million
we know that
IRR is the rate at which the NPV will be zero
So, 6.5÷ r -50 = 0
r = 13%
Based on NPV, Option B should be selected as it contains higher NPV as compared to option A.
However, Based on IRR, Option A should be chosen as it contains higher IRR and a higher IRR represent a higher profit percentage
Answer:
Credit to Cash Overage for $5,500
Explanation:
Revenue total is $120,500 so the revenue will be recorded by this amount and the cash is $126,000 so it will also recorded by the same amount. An additional credit entry will be placed to reflect the effect of this transaction.
The journal entry to record the day's sales would include
Debit Cash $126,000
Credit Cash Overage $5,500
Credit Sales $120,500
Answer: Duress
Explanation: Defense of duress can be seen as. Circumstance whereby an individual carries out an act as an outcome of turmoil, threat or any other coercion against the individual.
It is a criminal practice of forcing another person to behave in an involuntary way either by use of conveyed intent to inflict damage or loss on another individual or force. In this case, Justin can assert the defense of duress if he is being brought to law because Andrew held a gun to his head and forced him against his will to steal from the company.
Answer:
Sunk cost
Explanation:
Sunk cost is cost that has already been incurred and cannot be recovered. It should not be considered when making future decisions
Differential cost refers is difference between the cost of two different decisions.
Replacement cost is a the cost incurred in replacing an essential asset.
Answer:
&175
Explanation:
Breakeven price is the minimum price a product or service must be sold to cover the cost of producing it. Its aim is to ensure that items are not sold at a loss.
In the scenario given ,
Cost of room reservation = $3000
Cost of room / student = $3000/20 = $150
Course materials per student = $25
Total cost of course materials = $25 * 20 =$500
Total cost of training = $3,500
Target attendees = 20
Breakeven price = $3500/20 = $175
