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shepuryov [24]
3 years ago
15

Suppose an investor is interested in purchasing the following income producing property at a current market price of $450,000. T

he prospective buyer has estimated the expected cash flows over the next four years to be as follows: Year 1 = $40,000, Year 2 = $45,000, Year 3 = $50,000, Year 4 = $55,000. Assuming that the required rate of return is 12% and the estimated proceeds from selling the property at the end of year four is $500,000, what is the NPV of the project?
Business
1 answer:
Vikki [24]3 years ago
6 0

Answer:

Net Present value of Project is $9,890

Explanation:

Net present value is the Net value all cash inflows and outflows in present value term. All the cash flows are discounted using a required rate of return.

Net Present Value of Property is $9,890

Workings are made in an MS Excel file, which is attached with this answer. please find it.

Download xlsx
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Answer:

A. average total cost is rising.

Explanation:

Whenever marginal cost is more than average cost it means it costs more to produce a unit now compared to the average cost of the previous units. Lets assume that a company produces 3 units  of a good.

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Now if the marginal cost for producing a unit is more than the average cost for example if the marginal cost is 4, then this will mean that average total cost is rising. we can mathematically check this.

The first unit costs $1

The second unit costs $2

The third unit costs $3.

The fourth unit costs $4

Average cost= (1+2+3+4)/4=10/4=2.5

Here we see that the average cost increased from 2 to 2.5 because marginal cost was greater than average cost.

4 0
3 years ago
Blossom Company purchased equipment for $303,200 on October 1, 2020. It is estimated that the equipment will have a useful life
givi [52]

Answer:

Answer A  =  $9,000  

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Explanation:

[ find attachments for complete solutions]

Note: Complete question is attached to the attachment section

5 0
4 years ago
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Answer:

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Answer:

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Explanation:

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3 years ago
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harkovskaia [24]

Answer:

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