Answer:
8 years
Explanation:
payback period the Time duration in which a project pays back the initial investment to the business in the form of cash flows.
Initial Investment = $135,000
First 2 years have variable cash flows
Recovered in first two years = $25,000 + $20,000 = $45,000
Remaining Balance after 2 years = 135,000 - $45,000 = $90,000
After 2 years there is is constant cash flow of $15,000
Pay back years for $90,000 = $90,000 / $15,000 = 6 years
Total Payback period = 2 years + 6 years = 8 years
Answer:
A. True
Explanation:
Primary data are data obtained from the source. They are data collected from where they initially came from. Researchers, reporters often make use of primary data for project purposes.
Examples of primary data are telephone survey, experiments and interview etc.
Before identifying type of data to be used, population target and purpose of the research must be known. The type of data to be choosen must be directed to suit the purpose of a particular research project.
Answer:
Investment balance= $1,028
Explanation:
Giving the following information:
You plan to deposit $ 700 in a bank account now and $ 300 at the end of the year.
Interest rate= 4%
To determine the balance after the second deposit, we need to use the following formula for the first deposit and add the second one:
FV= PV*(1+i)^n
FV= 700*1.04= $728
Investment balance= 728 + 300= $1,028
Answer:
B. Currently used manufacturing capacity that has alternative uses
Explanation:
Make or buy decision is the process involved in determining whether to produce a product in house or purchase it from an external supplier.
Manufacturing Capacity is described as the production capability of an object in a manufacturing process. The object could be an operator, a machine or even a work center. Every resource in a manufacturing process has its determinable capacity and this is a relevant cost to consider when determing whether to produce or buy a product.
Looking at the definition, it is clear that current capacity of manufacturing with alternative uses is important. In other words, it is very crucial to be able to determine the cost of using the current manufacturing capacity to either make the product in house and then weigh this cost against the cost of using the same manufacturing capacity to manufacture an alternate product.
It stands to reason, (although other costs are weighed) that the product production (current or alternate) that can be manufactured at a lesser cost should be chosen and this is a very crucial decision in a make-or-buy decision.
Looking at the other options, the golden rule is that any cost that is not a direct cost to the manufactur of a product in house or its outsourcing should be ignored in making the decision.
Answer:
.B) shutdown, because it cannot even cover all of its variable costs let alone its fixed costs if it stays in business.
Explanation:
In a competitive market, the firm maximize it's profit when the market price of the firm is equal to average variable cost of the firm so that the firm earns normal profits in the long run.
Therefore, if price is less than the average variable cost then the firm should shutdown because it cannot even cover all of its variable costs let alone its fixed costs if it stays in business.