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spin [16.1K]
3 years ago
12

The annual profit from an investment is $ 25 comma 000 each year for 5 years and the cost of investment is $ 75 comma 000 with a

salvage value of $ 40 comma 000. The cost of capital at this risk level is 14​%.
Business
1 answer:
REY [17]3 years ago
5 0

Answer:

Year Cashflow [email protected]%             PV

            $                         $

0         (75,000)                1  (75,000)

1-5          25,000          3.4331     85,828

5               40,000          0.5194             20,776

                                                   NPV     31,604

Explanation:

In this question, we need to consider the initial outlay in year 0. The cashflows for year 1 to year 5 will be discounted at present value of annuity factor of 3.4331, which could be obtained from present value of annuity table. The salvage value will be considered in year 5 and discounted at the discount factor for year 5, which could also be obtained from present value table. Thus, net present value is calculated by adding the present value of cash inflows for year 1 to 5 to the present value of salvage value and deduct the initial outlay.

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A higher required reserve ratio​ _________ the value of the simple deposit multiplier.
Sergio [31]
The answer to this question is decreases
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</span><span>simple deposit multiplier. refers to the amount of money  that the bank does not hold as excess reserve.
When the amount of cash that need to be held is lower, the amount of excess will also tend to be lower</span>
3 0
3 years ago
Stine Company uses a job order cost system. On May 1, the company has a balance in Work in Process Inventory of $3,770 and two j
maxonik [38]

Answer:

Explanation:

WORK IN PROCESS INVENTORY    

May 1 balance 3770 May 31 Finished Goods 9234

31-May Material 11470    

31-May labour 13870    

31-May Overheads 9431.6    

may 31 Balance 29307.6    

JOB COST SHEET      

Job no. Beg. WIP Material Labour Overheads Total  

430 1340 3850 3400 2312 10902  

431 0 4680 8170 5555.6 18405.6  

TOTAL 1340 8530 11570 7867.6 29307.6  

Note: Total cost of Job 429 transferred to Finished goods:  

Beginning cost  2430    

Add: Material  2940    

Add: Labour  2300    

Add: Overheads (2300*68%) 1564    

Total cost of Job 429  9234  

4 0
3 years ago
Can we get negative cost of equity? and what does it represent?
Dovator [93]
Yes u can get negative cost of equity
8 0
3 years ago
Read 2 more answers
Suppose that Italy and Sweden both produce rye and cheese. Italy's opportunity cost of producing a pound of cheese is 5 bushels
mars1129 [50]

Answer:

Italy has a comparative advantage in the production of cheese

Explanation:

Suppose that Italy and Sweden both produce rye and cheese.

Italy's opportunity cost of producing a pound of cheese is 5 bushels of rye while Sweden's opportunity cost of producing a pound of cheese is 10 bushels of rye.

<u>By comparing the opportunity cost of producing cheese in the two countries, you can tell that Italy has a comparative advantage in the production of cheese because it has a lower opportunity cost (as a matter of fact half the cost) in comparison with Sweden.</u>

<u>Comparative advantage is an economic term that refers to an economy's ability to produce goods and services at a lower opportunity cost than that of trade partners</u>

6 0
3 years ago
Road Hazards has 12-year bonds outstanding. The interest payments on these bonds are sent directly to each of the individual bon
Alexeev081 [22]

Answer:

At par

Explanation:

From the question we are informed about Road Hazards with has 12-year bonds outstanding. The interest payments on these bonds are sent directly to each of the individual bondholders. In this case these direct payments are a clear indication that the bonds can accurately be defined as being issued at par. A par bond can be regarded as bond that is been sold at the exact face value, most mind sells at the face value of $1000, that $1000 is the face value, any par bond usually give an investor a yield which matches the amount of coupon that is associated to the bond.

.

7 0
3 years ago
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