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koban [17]
3 years ago
14

A company is considering purchasing a machine for $21,000. The machine will generate income from operations of $2,000; annual ne

t cash flows from the machine will be $3,500. The payback period for the new machine is 6 years.a. Trueb. False
Business
1 answer:
Ksenya-84 [330]3 years ago
5 0

Answer:

True

Explanation:

Data provided in the question:

Purchasing cost of the machine = $21,000

Income generated = $2,000

Annual net cash flows from the machine = $3,500

Now,

The Payback period = [ Purchasing cost ] ÷ [ Annual net cash flows ]

or

Payback period = $21,000 ÷  $3,500

or

Payback period = 6 years

Since,

the calculated payback period and the mentioned payback period in the question are equal

Hence,

the given statement is true

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Answer: Jessica's implicit costs are $46,000.

Implicit costs are the benefits that an individual gives up when they take a decision. Implicit costs are also known as opportunity costs.

In this case, Jessica will lose her salary of $40,000 each year. She will also lose the rent of $6000 a year from the building if she opens her fast food joint. So, total implicit costs are:

Total implicit cost = 40000+6000 = 46000

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3 years ago
Several factors affect a firm’s need for external funds. Evaluate the effect of each following factor and place a check next to
Studentka2010 [4]

Answer:

1.

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This will increase the need for external funds because with more funds going towards dividends, there will be less funds available to fund operations. The company will therefore be more probable of being in need of Additional funds.

  • The firm’s inventory turnover decreases, with no effect on the sales forecast.

If the firm's inventory turnover increases, it means that the firm is taking longer to sell off inventory. This will mean that the company will have to invest more in working capital to maintain these inventory levels. This will lead to a higher probability of them needing additional funds.

2. Yes, dividends still affect a firm’s AFN even though they are paid out of after-tax earnings.

Even though they are paid after-tax, they still eat into the funds that the business can be able to set aside to fund operations. So when dividends are paid, the need for AFN increases as well.

5 0
3 years ago
NDP Mp will be equal to:
Ivanshal [37]

Answer:

B) NDPFC + Indirect Taxes

Explanation:

Net domestic product (NDP) is obtained by subtracting depreciation from gross domestic product (GDP), and it can be calculated at market price (NDPmp) or at factor cost (NDPfc):

  • NDPmp = GDPmp – depreciation
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If we substitute NDPfc into option B, we will get:

NDPmp = NDPfc + indirect taxes

NDPmp = (GDPmp - depreciation - indirect taxes) + indirect taxes

NDPmp = GDPmp - depreciation

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Below are the expected afterminustax cash flows for Projects Y and Z. Both projects have an initial cash outlay of​ $20,000 and
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Answer:

Project Y = -$1,825.80

Project Z = $4,148.00

Explanation:

Calculation are as attached in the file

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When citibank repays a loan it had previously taken from the fed, it the money supply?
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