Answer:
The maximium cost I would be willing to purchase the asset is 26.033,84 above this price the investment will not yield the 6% return.
Explanation:
We calcualte the present value of all cash flows:
annual cashflow:
15,000 revenue - 2,000 expenses = 3,000
C 3,000.00
time 20
rate 0.06
PV $34,409.7637
Pv of the 10th year investment:
Maturity $15,000.0000
time 10.00
rate 0.06000
PV 8,375.9217
present value of the cashflow
34,409.7637 - 8,375.92 = 26.033,84
Answer:
B. its fixed cost in both the short run and the long run.
Explanation:
As there is no production the fixed costs remains the same for short run and long run too, because there is no activity which might be used for these costs allocation in the short or long run. In the long run a fixed cost might behave as a variable cost if there is any activity involved. I the short run the fixed costs is considered as fixed whether there is any activity or not.
Answer:
B. a dividend yield which is less than that of the average firm
Explanation:
The P/E ratio can be regarded as ratio that give analysis of value that market is willing to pay at the moment with regards to the earnings in past or future. When the P/E ratio is high then
stock's price is considered high compare to the earnings, a low P/E ratio can be interpreted as having low stock price with respect to the earnings. Stocks that has its P/E ratios below 15 are usually regarded as been cheap , those with ratio above 18 are considered expensive. It should be noted that, A company whose stock is selling at a P/E ratio greater than the P/E ratio of a market index most likely has a dividend yield which is less than that of the average firm.
Answer:
E. Customer satisfaction
Explanation:
Customer satisfaction is a benefit and not a cost.
