Answer:
BUILDING C
Explanation:
Calculation to determine In which building would you recommend that The Nash Inc. locate, assuming a 12% cost of funds
BUILDING A $611,000
Calculation for BUILDING B
Annual payments $71,370
X PV factor 8.65246=1+(1-(1.11)^-24)/0.12
Net present value $617,526.1
Calculation for BUILDING C
Annual rental $6,800
X PV factor 7.71993 =(1-(1.11)^-25)/0.12
Present value 52,495.5
Net present value =$657,400- $52,495.5
Net present value =$604,905
Net present value
Building A $611,000
Building B $617,526.1
Building C $604,905
Based on the above calculation Nash inc should locate itself in Building C because it has less Net present value
Therefore the building you would recommend that The Nash Inc. locate, assuming a 12% cost of funds is BUILDING C
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Geography, cultural and social factors, economic conditions, and political and legal factors are the four parts of the international business environment
Answer:
The present value of the cashflows will be $12830.30
Explanation:
The present value of the cashflows can be calculated by dividing the cash flows by the appropriate discount rate and for the appropriate time period.
The present value of the given cash flows will be,
Present Value = CF1 / (1+r) + CF2 / (1+r)^2 + .... + CFn / (1+r)^n
As the first payment is received today, it will already be in the present value so it will not be discounted.
Present value = 2000 + 3000 / (1+0.1) + 5000 / (1+0.1)^3 + 7000 / (1+0.1)^5
Present value = $12830.295 rounded off to $12830.30
Answer: Variable ... Fixed
Explanation:
In the short run, Variable Inputs or costs are known as those which can be changed and their quantities can be varied. In this scenario, the employees that Cho's uses can be varied and so are the Variable Inputs.
Similarly, those costs that cann ot be changed or varied in the short run are rightly known as Fixed Inputs. Cho's Kitchen cannot take more than 3 ovens and also she has already signed a lease for them. These costs cannot be changed and so make the oven a Fixed Input.
It is worthy of note that in the long term, all Costs are considered Variable.
