1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Crank
3 years ago
9

A company is contemplating investing in a new piece of manufacturing machinery. The amount to be invested is $210,000. The prese

nt value of the future cash flows is $225,000. The company's desired rate of return used in the present value calculations was 12%. Which of the following statements is true Select one: a. The project should not be accepted because the net present value is negative. b. The internal rate of return on the project is less than 12%. c. The internal rate of return on the project is more than 12%. d. The internal rate of return on the project is equal to 12%.
Business
1 answer:
xxTIMURxx [149]3 years ago
3 0

Answer:

b. The internal rate of return on the project is less than 12%

Explanation:

Net present value = present value - amount invested

$225,000 - $210,000 = $15,000

The IRR is the discount rate that equates the after tax cash flows from an investment to the amount invested .

$225,000 / (1 + IRR) = $210,000

IRR = 7.14%

The IRR is less than the desired rate of return.

I hope my answer helps you.

You might be interested in
Hitzu Co. sold a copier costing $6,500 with a two-year parts warranty to a customer on August 16, 2018, for $13,000 cash. Hitzu
kari74 [83]

Answer:

kjhfdgf

uigykyjgExplanation:

6 0
4 years ago
Read 2 more answers
HELP ASAP I NEED TO TURN IT IN RN (Econ) idk if the answer is A I accidentally clicked it
Dahasolnce [82]

Answer:

C is S1.

Explanation:

5 0
3 years ago
The following are the stages of both consumer and organization purchase decisions. Place each stage in the most typical order of
777dan777 [17]

Answer:

Problem Recognition.

Information Search.

Evaluation of Alternatives.

Purchase Decision.

Purchase.

Post-Purchase Evaluation

Explanation:

1. Problem Recognition: This relates to the existence and realization of the  <u>need gap</u> between what they have and what they want.

2. Information Search: This is the next stage where the consumer begins to search for how to close the need gap.

3. Evaluation of Alternatives: After searching for  available information on potential way(s) to meet the existing need, the product of the search could reveal numerous alternatives from which a choice will be made after thorough evaluation

Purchase Decision: This is the point where the choice is made from the available alternatives to buy one or not to buy any at all.

Purchase: After the decision, the purchase is made

Post-Purchase Evaluation: After a purchase decision, it is imperative that the customer gives feedback on whether or not they are satisfied with the decision that was made or not, to buy the product.

3 0
3 years ago
zonk corp. is a manufacturer of ball bearings. data below is in dollar amounts in millions: total assets $7460 interest-bearing
satela [25.4K]

Answer:

Zork's cost of equity capital is 12.85%

Explanation:

Cost of equity=Rf+Beta* Mrp

Rf is the risk-free rate of 4.6% which is rate of return on government security

Beta of the stock is 1.13

Mrp is the market risk premium which is the incentive given over and above the risk free rate in order to compensate investors for risk taken by investing in stock i.e 7.3%

cost of equity=4.6%+(1.13*7.3%)=12.85%

4 0
3 years ago
True/False
Anvisha [2.4K]

Answer:

False.

Explanation:

Liquidity ratios are used by creditors to determine the ability of a company or debtor to pay off current short-term debt without any external help. They are thus, of great importance to creditors to show them the debtor's ability.

7 0
3 years ago
Other questions:
  • A pharmaceutical company has a weekly meeting. every week, the meeting starts with a story about a research breakthrough. what i
    7·2 answers
  • Edgar received a text message from Groupon this morning, letting him know about an opportunity to take a series of five horsebac
    10·1 answer
  • On January 1, Year 1, Sanders Company acquired a patent in conjunction with the purchase of another company. The patent, valued
    15·1 answer
  • Selected Information from Balance Sheets (As of Year End for Years 0 and 1)
    11·1 answer
  • Which of the following is an essential characteristic of enduringly great companies? They undergo continuous change. They are so
    8·1 answer
  • A process with 1200 units of beginning work in process, completed and transferred out 26300 units during a period. There were 90
    8·1 answer
  • True or False?<br> Social workers work at both the state and national level.
    6·1 answer
  • Which precaution should be taken to prevent cross contact?
    14·1 answer
  • How would a list of personal property and its worth help when
    6·2 answers
  • creative textiles inc. manufactures cloth and buys the chemical dyes for its use from california chemicals inc. california chemi
    10·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!