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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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Six months ago, you purchased 3,000 shares of ABC stock for $47.06 a share. You have received dividend payments equal to $.80 a
Sergeeva-Olga [200]

Answer:

Total dollar return = 2400 + 8040 = $10440

Option d is the correct answer

Explanation:

To calculate the total dollar return on the investment, we will calculate the value of dividend received from the shares and the capital gain made on this investment. The capital gain is the appreciation in value less the initial cost paid for the investment.

First we calculate the value of dividend received on the investment.

Dividend received = 3000 * 0.8 = $2400

Now we calculate the value of capital gain.

Capital gain = (Sale price - Initial cost) * Number of shares

Capital gain = (49.74 - 47.06) * 3000

Capital gain = $8040

Total dollar return = 2400 + 8040 = $10440

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2 years ago
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Answer:

(a) Given that a chip passes the test, what is the probability that it is a good chip?

LetB = {the chip is good}

A={the chip passes the cheap test}.

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P(A | B) = 1

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= \frac{P(A | B)P(B)}{P(A | B)P(B) + P(A | Bc)P(Bc)} = \frac{1.0.8}{1.0.8+ 0.075 · 0.2}  ≈ 0.9751

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wlad13 [49]
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Answer:

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Explanation:

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The following steps should be followed:

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Subject

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8 0
3 years ago
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