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sertanlavr [38]
3 years ago
6

Brunette Company is contemplating investing in a new piece of manufacturing machinery. The amount to be invested is $180,000. Th

e present value of the future cash flows generated by the project is $163,000. Should they invest in this project?
A) no, because the rate of return on the project is less than the desired rate of return used to calculate the present value of the future cash flows
B) no, because net present value is +$17,000
C) yes, because the rate of return on the project is equal to the desired rate of return used to calculate the present value of the future cash flows
D) yes, because the rate of return on the project exceeds the desired rate of return used to calculate the present value of the future cash flows
Business
1 answer:
Virty [35]3 years ago
5 0

Answer:

A) no, because the rate of return on the project is less than the desired rate of return used to calculate the present value of the future cash flows

Explanation:

The NPV is calculated by subtracting the initial investment from the Present value of the project's future cashflows;

NPV = 163,000 - 180,000

NPV = -17,000 , this eliminates choice B

NPV and IRR rule always agree on the decision to accept or reject a project so long as the pattern of cashflows is the same.

Since, the NPV is negative, this project will be rejected. For IRR rule to agree with this, the internal rate of return will also be less than the discount rate used to calculate the present value of future cashflows, making choice A correct.

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Diversification is most effective when security returns are _________. a. high b. negatively correlated c. positively correlated
Y_Kistochka [10]

Answer: Option B  

                       

Explanation: In simple words, diversification refers to the process of allocating capital in different investments to reduce the overall risk of the investment portfolio.

Therefore, analyst tries to make portfolio in such a way that securities will be negatively correlated. If two securities are negatively correlated then the decrease of one will lead to proportionate increase of others.

This ensures that the investors money will not be depreciated but at the same time the potential for abnormal returns also decreases.

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3 years ago
An acre lot was purchased for $100,000. A $500,000 office building was erected. The building is placed in service in May. Find t
kolezko [41]

Answer: $8025

Explanation:

From the information given, first and foremost, we need to realise that only the building in this case will be depreciated due to the fact that land is considered to be a non depreciable asset.

Therefore, the MACRS depreciation charge for year 1 will then be:

= MACRS rate × Value of Building

= 1.605% × $500,000

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3 years ago
A new hospital needs a computer that can support hundreds of users. What classification of computer does the hospital need?
vladimir1956 [14]
The answer to the given question above would be option B. If a <span>ew hospital needs a computer that can support hundreds of users, the classification of computer that the hospital needs is a mainframe computer. The level of reliability of this type of computer is very high because of their storage. Hope this helps.</span>
3 0
2 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

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jekas [21]

Answer:

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Explanation:

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