Answer: Make immediate payment of $2,458,000
Explanation:
The recommended payment option will be the one with a lower present value.
It can make a payment of $2,458,000 now which would be the PV of the first option.
Second option is a constant amount for 15 years to be paid on the first day of every year making it an annuity due.
Present Value of annuity due;
= Annuity * Present value factor of Annuity due, 15 periods, 11%
= 336,800 * 7.9819
= $2,688,303.92
<em>Lower and recommended option is to make immediate payment of $2,458,000. </em>
Answer:
Financial analysis can be understood as the process of assessing the productivity and appropriateness of firms, initiatives, finances, and other financial activities. Financial analysis is often done to determine whether or not a company is secure, stable, liquid, or lucrative enough to support a financial investment.
A weighted grading method (also known as a weighted scorecard) is a project management approach for weighting various decisions, such as prioritising project tasks, prioritising product component creation, acquiring new equipment, and so on.
Answer:
4,444.44 units
Explanation:
For the computation of Number of units to be sold to earn target profit first we need to follow some steps which are shown below:-
Selling price per unit = Sales ÷ Number of units sold
= $300,000 ÷ 5,000
= $60
Variable cost per unit = Total variable cost ÷ Number of units sold
= $180,000 ÷ 5,000
= $36
Increase in selling price = $60 × 5%
= $3
New selling price per unit = $60 + $3
= $63
New contribution margin per unit = New selling price per unit - Variable cost per unit
= $63 - $36
= $27
Number of units to be sold to earn target profit = (Fixed cost + Target profit) ÷ Contribution margin per unit
= ($90,000 + $30,000) ÷ $27
= $120,000 ÷ $27
= 4,444.44 units
Answer:
Mutually exclusive
Explanation:
Mutually exclusive projects are projects where if you accept one project, the other project has to be rejected.
For example, a company has $250,000 to invest in a project. It can either choose to build a warehouse or buy an equipment. Both projects cost $250,000. Because of the limited capital, only one project can be chosen. This is an example of a mutually exclusive project