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Mariana [72]
3 years ago
9

Analyze if the investment in new equipment is profitable based on the information given below. Cost of new equipment $66,000 Yea

rly expected cash flows to be received $20,000 Expected life 4 years Minimum desired rate of return 10% Present Value of an Annuity of $1 at 10% for 4 years 3.170
a.The internal rate of return is greater than 10% and is not profitable.
b.The internal rate of return is greater than 10% and is profitable.
c.The internal rate of return is less than 10% and is profitable.
d.The internal rate of return is less than 10% and is not profitable.
Business
1 answer:
katrin [286]3 years ago
8 0

Answer:

D

Explanation:

Internal rate of return is the discount rate that equates the after-tax cash flows from an investment to the amount invested

IRR can be calculated with a financial calculator  

Cash flow in year 0 =  $-66,000

Cash flow each year from year 1 to 4 = $20,000

IRR = 8.16%

For the project to be profitable, the IRR has to be greater than the desired rate of return

Since the IRR (8.16%) is lower than the desired rate of return (10%), the project isn't profitable

To find the IRR using a financial calculator:

1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.

2. After inputting all the cash flows, press the IRR button and then press the compute button.  

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Selling goods only at certain predetermined prices that reflect definite price breaks is called .
Firlakuza [10]

selling goods only at certain predetermined prices that reflect definite price breaks is called Price lining

Price lining, also known as product line pricing, is a marketing tactic where a company charges for its products in accordance with its quality, features, or other characteristics to set them apart from competing ones.

Price line, to put it simply, is the practice of placing comparable products in various price ranges, each of which differs significantly in terms of the characteristics or qualities it offers. These brackets typically have lower starting prices and higher price points.

Despite having "price" in its name, price lining is a marketing tactic. The major goal of this strategy is to increase sales and audience size by making the offering more appealing to a wider range of consumers.

Apple, a company that makes smartphones, is a good illustration of price lining in action. Apple offers its iPhone lineup in a range of price points, with each model differing mainly in the small number of extra features that are added to the more expensive ones. Instead of solely selling expensive iPhones, Apple now offers a variety of models to appeal to customers with varying levels of purchasing power, which helps them grow sales.

To know more about price lining

brainly.com/question/7250116

#SPJ4

8 0
10 months ago
In February 2017 the risk-free rate was 4.97 percent, the market risk premium was 7 percent, and the beta for Twitter stock was
Gnesinka [82]

Answer:

14.77%

Explanation:

In this question, we apply the Capital Asset Pricing Model (CAPM) formula which is shown below

Expected rate of return = Risk-free rate of return + Beta × (Market rate of return - Risk-free rate of return)

= 4.97% + 1.40 × 7%

= 4.97% + 9.8%

= 14.77%

The (Market rate of return - Risk-free rate of return)  is also called market risk premium and the same is shown in the answer

5 0
3 years ago
Which procedure would be of most assistance to an auditor discovering a large credit sale that has erroneously been recorded twi
koban [17]

Answer:

B. Sending accounts receivable confirmations.

4 0
3 years ago
Bank A quotes a bid rate of $.300 and an ask rate of $.305 for the Malaysian ringgit (MYR). Bank B quotes a bid rate of $.306 an
alexdok [17]

Answer:

B. $1,639 ​

Explanation:

To do arbitraje we will ask at Bank A for $0.305

and then bid in Bank B at $0.306

As the transactions has no cost we are doing a profit by using the exchange as they allowed. Doing this procedure will at some point eliminate the difference in exchange rate for these bank as the purchase will rise the ask rate for Bank A and the sale will decrease the bid rate.

500,000 \times \frac{0.306}{0.305}

Total: 501639,3442622951

The profit will be for: 501,639.34 - 500,000 = 1,639.34

7 0
3 years ago
A parent sold land costing $400,000 to its subsidiary for $450,000 in 2017. The subsidiary still holds the land at the end of 20
nadezda [96]

Answer:

correct option is a. Land

Explanation:

given data          

land costing =  $400,000        

subsidiary 2017 = $450,000      

land credit = $50,000        

                 

solution            

While when we consolidating  land that will  appear in the group asset at the amount of 450,000.  

so here the appreciation in the value of land is not  realized gain .

so that there will be  credit to land with 50,000

so correct option is a. Land

5 0
2 years ago
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