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loris [4]
3 years ago
12

Elena is trying to decide whether she should expand her ice cream shop to a bigger space. She decides to be very methodical abou

t it and follow the phases of the decision-making process she learned in college. Which of the following statements is true?
a) During the intelligence phrase, Elena will build a model using assumptions about the business.
b) During the design phrase, Elena will define the opportunity.
c) During the choice phase, Elena will lay out her options.
d) During the implementation phase, Elena will implement two of her solutions.
e) Elena will use test data to validate her model
Business
1 answer:
Nana76 [90]3 years ago
4 0

Answer: e) Elena will use test data to validate her model

Explanation:

Test data is a computer program that will help Elena to verify the type of results to expect using some set of inputs.

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A company has the opportunity to take over a redevelopment project in an industrial area of a city. No immediate investment is r
Ganezh [65]

Answer:

1-a. The are multiple IRRs stated as follows:

The first IRR value = 4.09%

Second IRR value = 31.82%

1-b. Rate of return = 7.58%

2. This is NOT a good investment because the NPV is negative.

Explanation:

Note: The estimated Net Cash Flow for the 4th year in the data is erroneously stated in the question as a positive value instead as a negative value since it is a cost.

The estimated net cash flows correctly before answering the question as follows:

Year End             Net Cash Flow

1                             $500,000

2                            $300,000

3                            $100,000

4                          –$2,400,000

5                            $150,000

6                            $200,000

7                            $250,000

8                            $300,000

9                            $350,000

10                           $400,000

The explanation of the answers is now given as follows:

1-a. Tabulate the PW versus the interest rate and determine whether multiple IRRs exist.

Note: See Part 1-a of the attached excel file for the tabulation of the PW versus the interest rate.

From Part 1-a of the attached excel file, it can be observed that multiple IRRs exist. This is because there two IRRs stated as follows:

The first IRR value = 4.09%

Second IRR value = 31.82%

1-b. If so, use the ERR method when e 8% per year to determine a rate of return.

Note: See Part 1-a of the attached excel file for the calculation of total future value of income when e = 8% per year.

In the attached excel file, note that year 4 has a cost not income. Therefore,

From attached excel, we have:

Total Future Value of Income = $3,661,508.81

In the attached excel file, note that year 4 has a cost (not income) of $2,400,000. Therefore, it future value is not calculated. However, the present of the cost can be calculated as follows:

Present value of cost in year 4 = $2,400,000 / (100% + e)^4 = $2,400,000 / (100% + 8%)^4 = $1,764,071.65

The rate of return can now be calculated as follows:

Rate of return = ((Total Future Value of Income / Present value of cost in year 4)^(1/Number of period)) - 1 = (($3,661,508.81 / $1,764,071.65)^(1/10)) - 1 = 0.0758, or 7.58%

2. Use the PW method and a MARR of 18% to determine whether this is a good investment.

Note: See Part 2 of the attached excel file for the calculation of net present value (NPV).

From part 2 of the attached excel file, we have:

Net present value = –$21,043.15

Since the net present value is negative, this implies that this is NOT a good investment.

Download xlsx
5 0
3 years ago
Currently, the yield curve is ascending. A customer believes that the Federal Reserve will start to tighten credit by raising sh
sleet_krkn [62]

Answer:

Short-selling long-term bonds and taking long position on short-term assets

Explanation:

When the yield curve ascends, the long-term bond's price will go down. Hence, do short-sell the long-term bonds. On the other hand, short-term asset's price will be depreciated because Fed tightens credit and raise short-term rate, which is the chance to purchase and make profits from capital gains.

3 0
4 years ago
Which of the following statements are TRUE about credit scores?
Fittoniya [83]
The statement that are true about credit scores are; credit scores reflect how likely individuals are to repay their debts. The credit bureau does not hide how it calculates peoples credit. The correct answer is A. 
7 0
3 years ago
Read 2 more answers
Differentiate between the short run and Long run?​
kramer

Answer:

Short-run is a time limit during which at least one input can be fixed and other input quantities can be verified.

The long run is a time period in which all the inputs can be verified in quantities.

Explanation:

  • Both the fixed and variable costs occur in the short term.
  • There are no fixed costs in the long term.
  • The combination of the output of a company results in the desired amount of the goods at the lowest possible cost is sustained by efficient long-term costs.
  • The output changes variable costs. For instance, the employee's salaries and raw material costs are variable costs.

  • Based on variable costs and the production rate, the short-run costs are increasing or falling. If a company manages its short-term costs well over time, the desired long-term costs and goals will more likely be achieved.
3 0
3 years ago
If you have two insurance policies on the same property, the ____ clause explains how the two insurance companies will share the
pantera1 [17]

Answer:

e. other insurance clause.

Explanation:

The other insurance clause is found in both property and liability insurance. This clause determines how loss is divided up when multiple policies cover the same loss.

5 0
3 years ago
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