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
Mashutka [201]
3 years ago
10

Kaleb Konstruction, Inc., has the following mutually exclusive projects available. The company has historically used a three-yea

r cutoff for projects. The required return is 10 percent.
Year Project F Project G
0 $150,000 $235,000
1 78,000 54,000
2 54,000 72,000
3 68,000 103,000
4 60,000 139,000
5 54,000 156,000

Required:
a. Calculate the payback period for both projects.
b. Calculate the NPV for both projects.
Business
1 answer:
Neko [114]3 years ago
8 0

Answer:

Instructions are listed below.

Explanation:

Giving the following information:

The company has historically used a three-year cutoff for projects. The required return is 10 percent.

Year - Project F - Project G

0: $150,000 - $235,000

1: 78,000 - 54,000

2: 54,000 - 72,000

3: 68,000 - 103,000

4: 60,000 - 139,000

5: 54,000 - 156,000

A) Payback period: it is the necessary time to recover the initial investment.

Project F:

Io= -150,000

Year 1= +78,000= -72,000

Year 2= +54,000= -18,000

Year 3=+68,000= 50,000

We have to determine the number of days:

(18,000/68,000)= 0.26*365= 95 days

It will take 3 years and 95 days to recover the initial investment

Project G:

Io= -235,000

Year 1= +54,000= -181,000

Year 2= +72,000= -109,000

Year 3= +103,000= -6,000

Year 4= +139,000= 133,000

We have to determine the number of days:

(6,000/139,000)= 0.043*365= 16 days

It will take 4 years and 16 days.

2) To calculate the Net present value, we need to discount the cash flows.

NPV= -Io + ∑[Cf/(1+i)^n]

Cf= cash flow

Project F:

NPV= -150,000 + 78,000/1.10 + 54,000/1.10^2 + 68,000/1.10^3 ...

NPV= $91,137.15

Project G:

NPV= -235,000 + 54,000/1.10 + 72,000/1.10^2 + ...

NPV= $142,783.06

You might be interested in
You are the manager of a theater. At present the theater charges the same admisssion price of $8 to all customers, regardless of
Goshia [24]

Answer:

Explanation:

Provided that the demand is inelastic, there would be an increment in revenue.

Total revenue is calculated as the quantity of a good sold multiplied by its price.

There is a close interrelation between price elasticity of demand and total revenue, in the sense that they deal with the same two variables - which are price and quantity.

If the product has an elastic demand, revenue can be increased by decreasing the price of the good. Q will increase at a greater rate, while  P will decrease,  thereby, increasing the total revenue.

If the product has an inelastic demand, then the prices of goods can be increased and sold slightly less of that item but a higher revenue must be obtained.

7 0
3 years ago
Firms are institutions that organise​ _____ of goods and services.
Zinaida [17]

Answer:

The correct word for the blank space is: the production.

Explanation:

A firm is a business or organization that produces goods or services on a for-profit basis. While the term is typically related to law firms, it applies to an array of entities. For example, a firm can be a corporation which is a legal entity that is separate from its owners and enjoys the right to entering contracts, loan, and borrow money or conduct other business.

3 0
3 years ago
________ is a competitive strategy for creating brand loyalty by developing new and unique products and services that are not ea
boyakko [2]

Answer: PRODUCT DIFFERENTIATION

Explanation:

This is a marketing strategy that some companies employ whereby they aim to distinguish their products from that of competitors by giving it certain features that expound on its strength in the market.

This strategy can create a competitive advantage for goods that will ensure that the company maintains a dominant place in the market.

7 0
3 years ago
Wiley incorporates his business as Wiley Wire Corporation in Texas. He and his group of shareholders intend to make a profit fro
ruslelena [56]

Answer:

d. a private corporation.

Explanation:

A private corporation is a limited company that is owned by a few numbers of shareholders.  The shares of a private corporation are not publicly traded in the securities exchanges, neither are they issued through an initial public offer.  Ownership of a private corporation is transferable but is restricted to the founders who, in most cases, are family members, close friends, or associates.

Wiley and the shareholders have a private corporation. Formation of a private corporation is through incorporation, as is the case of Wiley wire corporation. Private corporations are established with a profit motive. Ownership of Wiley wire corporation will be restricted to Wiley and the other shareholders.

4 0
3 years ago
Which of the following types of advertising is particularly expensive? A. Internet ads B. Newspaper ads C. TV commercials D. Rad
Vera_Pavlovna [14]
C, tv commercials are ussualy the most expensive.

If that helps make sure to mark this as the brainliest!
-procklown <3
7 0
3 years ago
Read 2 more answers
Other questions:
  • If goods are sold on terms fob shipping point, the ________.
    11·1 answer
  • How has culture affected technology?
    15·1 answer
  • Opportunity cost refers to:
    6·1 answer
  • In its role as money manager, the Federal Reserve has three primary goals: to maintain stable prices (control inflation), ensure
    9·1 answer
  • Bennett is a software engineer who starts his own website development firm. His friend, Callie, is the owner of a store that sel
    6·1 answer
  • Sheffield Corp. uses the composite method and its composite rate is 7.5% per year, what entry should it make when plant assets t
    6·1 answer
  • You have decided that you want to be a millionaire when you retire in 44 years. If you can earn an annual return of 11.38 percen
    15·1 answer
  • Suppose that the position of a​ nation's long-run aggregate supply​ (LRAS) curve has not​ changed, but its​ long-run equilibrium
    8·1 answer
  • Most Americans avoid the use of credit when it comes to buying big ticket items like a car or furniture for their home
    9·1 answer
  • if a customer has a margin account with a long position worth $20,000 and a debit balance of $8,000, what is the purchasing powe
    6·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!