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3 years ago

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An opportunity cost: Multiple Choice Is an unavoidable cost because it remains the same regardless of the alternativ

1 answer:

Diano4ka-milaya [45]3 years ago

8 0

Answer:

Is the potential benefit lost by choosing a specific alternativecourse of action among two or more.

Explanation:

This question is incomplete. The complete question can be found here: https://www.chegg.com/homework-help/questions-and-answers/opportunity-cost--unavoidable-cost-remains-regardless-alternative-chosen-b-requires-curren-q10956439

Here is the complete question:

An opportunity cost:

Is an unavoidable cost because it remains the same regardless ofthe alternative chosen.

Requires a current outlay of cash.

Results from past managerial decisions.

Is the potential benefit lost by choosing a specific alternativecourse of action among two or more.

Is irrelevant in decision making because it occurred in the past.

Opportunity cost is the cost of the next best option forgone when one alternative is chosen over other alternatives.

An example of opportunity cost :

Martha has three options : Start her company, remain employed or go on vacation. If she leaves her job to start her company she would earn $5,000,000 per year. She earns $1 million where she works. She values vacation at $2 million.

If she decides to stay employed, her opportunity cost is $5 million. The amount she would have made if she started her company.

If she decides to start her company, her opportunity cost is $2 million. The amount she values vacation

Opportunity cost doesn't remain the same regardless of the option taken.

If martha wants to maximise profit , she would start her business because if yields the highest payoffs. Opportunity cost is relevant to making decisions.

I hope my answer helps you

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Which of the following is a general two-year college level degree

svetlana [45]

Answer:

an associates degree

Explanation:

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3 years ago

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Which one of the following will produce the highest present value interest factor? A. 6 percent interest for five years B. 6 per

disa [49]

Answer:

The correct answer is A

Explanation:

The formula to compute the present value interest factor using excel is as:

= 1/(1+r)^ n

where

r is the rate

n is number of years

So, in case of A,

The present value interest factor is:

= 1/(1+0.06)^5

= 0.74725

In case of B,

The present value interest factor is:

= 1/(1+0.06)^8

= 0.62741

In case of C,

The present value interest factor is:

= 1/(1+0.06)^10

= 0.55839

In case of D,

The present value interest factor is:

= 1/(1+0.08)^5

= 0.68058

In case of E,

The present value interest factor is:

= 1/(1+0.08)^10

= 0.46319

Therefore, it is highest in option A.

3 0

3 years ago

Celeste Nossiter borrowed $6200 from her father to buy a used car. She repaid him after 9 months, at an annual interest rate of

Pie

Answer:

$6,530.15

Explanation:

Calculation:

First, converting R percent to r a decimal

r = R/100

= 7.1%/100 = 0.071 per year.

Putting time into years for simplicity,

9 months / 12 months/year = 0.75 years.

Solving our equation:

A = 6200(1 + (0.071 × 0.75)) = 6530.15

A = $6,530.15

The total amount accrued, principal plus interest, from simple interest on a principal of $6,200.00 at a rate of 7.1% per year for 0.75 years (9 months) is $6,530.15.

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2 years ago

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On January 1, DogMart Company purchased a two-year liability insurance policy for $32400 cash. The purchase was recorded to Prep

aleksley [76]

Answer: $1,350

Explanation:

The insurance is for 2 years but has to be apportioned monthly on account of the Accrual basis in Accounting where expenses will only be recognized when they are incurred.

The expense to be recorded for the first month will therefore be:

= 32,400 / 24 months

= $1,350

4 0

2 years ago

Universal Laser, Inc., just paid a dividend of $3.10 on its stock. The growth rate in dividends is expected to be a constant 6 p

Vadim26 [7]

Answer:

Ans. The current price of the stock is $56.82

Explanation:

Hi, well, the problem here is that we have different discount rates, in other words the required rate of return for the stock changes several times, therefore we are going to break this problem in 3 parts, or bring to present value all the cash flows in 3 steps. Let´s start with the value of the dividends.

We have to use the following formula.

$Dn=D_{(n-1)} *(1+g)$

Where, D(n-1) is last dividend and Dn is the dividend that we are looking for, for example, D1 = 3.10*(1+0.06)=3.29, D2=3.29*(1+0.06)=3.48, and so forth. The amount to pay on dividends per share is,

D1=3.29; D2=3.48; D3=3.69; D4=3.91; D5=4.15; D6=4.40; D(7)=4.66

Since the first 3 years are to be discounted at a 15%, this is how the formula should look like.

$PV(1)=\frac{D1}{(1+r(1))^{1} } +\frac{D2}{(1+r(1))^{2} } +\frac{D3}{(1+r(1))^{3} }$

$PV(1)=\frac{3.29}{(1+0.15)^{1} } +\frac{3.48}{(1+0.15)^{2} } +\frac{3.69}{(1+0.15)^{3} }=7.92$

Now, for the second part, we have to bring all cash flows to year 3 at r(2)=13% and then bring it to present value at r(1)=15%. This is because we have 2 different discount rates, this is as follows.

$PV(2)=(\frac{D4}{(1+r(2))^{1} } +\frac{D5}{(1+r(2))^{2} } +\frac{D6}{(1+r(2))^{3} })*\frac{1}{((1+r(1)^{3} }$

$PV(2)=(\frac{3.91}{(1+0.13)^{1} } +\frac{4.15}{(1+0.13)^{2} } +\frac{4.40}{(1+0.13)^{3} })*\frac{1}{(1+0.15)^{3} } =6.42$

Finally, we need to bring all the future cash flows from year 7 and beyond, notice that we need to use the return rate r(3) to bring everything to year 6, then we have to bring it to year 3 and then to present value, everything as follows.

$PV(3)=(\frac{D7}{(r(3)-g)} )*(\frac{1}{(1+r(2))^{3} } )*(\frac{1}{(1+r(1))^{3} } )$

$PV(3)=(\frac{4.66}{(0.11-0.06)} )*(\frac{1}{(1+0.13)^{3} } )*(\frac{1}{(1+0.15)^{3} } )=42.48$

So, the price of the stock is PV(1) + PV(2) + PV(3), or:

$Price=7.92+6.42+42.48=56.82$

Price= $56.82/share

Best of luck.

3 0

3 years ago