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Evgen [1.6K]
3 years ago
7

"consider noah's decision to go to college. if he goes to college, he will spend $80,000 on tuition, $15,000 on room and board,

and $4,000 on books. if he does not go to college, he will earn $22,000 working in a store and he will spend $13,000 on room and board. noah's cost of going to college is"
Business
1 answer:
zhuklara [117]3 years ago
6 0
If I'm correct it would be $99,000 since he has tuition, room and board, and books. The other cost do not relate to going to college.
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Answer:

This business idea worth $430,127 today

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Today value of the future cash flows can be calculated by discounting the cash flows on the given discount rate. It is called the present value and sum of present value of all cash flows is called Net present value.

We use following format to calculate NPV for the given business idea

Years                                     1                  2                  3

Cash Flows                      $5,600       $48,200      $125,000

Sale Proceeds                                                         $450,000

Net Cash Flows               $5,600       $48,200      $575,000

Discount Factor    14%    0.8772        0.7695        0.6750

Present values                 $4,912.32   $37,089.9    $388,125

Net present value of business idea = $4,912.32 + $37,089.9 + $388,125

NPV = 430,127.22

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3 years ago
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7 0
1 year ago
Jones Manufacturing sent Blue Company an invoice for equipment with a list price of $10,000. The invoice is dated July 27 with t
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Answer:

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