1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Mice21 [21]
3 years ago
10

Deep Mining and Precious Metals are separate firms that are both considering a silver exploration project. Deep Mining is in the

actual mining business and has an aftertax cost of capital of 16.7 percent. Precious Metals is in the precious gem retail business and has an aftertax cost of capital of 12.6 percent. The project under consideration has initial costs of $755,000 and anticipated annual cash inflows of $152,000 a year for 10 years. Which firm(s), if either, should accept this project?
Business
1 answer:
Julli [10]3 years ago
5 0

Answer:

Precious metals should accept the project

Explanation:

To determine which company should accept the project, one has to calculate the net present value.

The net present value is the present value of after tax cash flows from an investment less the amount invested.

NPV can be calculated using a financial calculator:

Cash flow in year 0 =

Cash flow each year from year one to ten =

For Deep Mining ,

I = 16.7%

NPV = $39,096.09

Precious Metals,

I = 12.6%

NPV = $83,144.67

Precious metals should accept the project because its npv is postive.

To find the NPV using a financial calacutor:

1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.

2. After inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.

3. Press compute

I hope my answer helps you

You might be interested in
An example of a consumer would be a
goldenfox [79]

A bear would be an example of a consumer

4 0
3 years ago
The Bell Weather Co. is a new firm in a rapidly growing industry. The company is planning on increasing its annual dividend by 1
Keith_Richards [23]

Answer:

$259.34

Explanation:

the value of the stock can be determined using the two stage dividend discount model.

In the first stage, the present value would be determined using a discount rate of 18%.

In the second stage, the present value would be determined using a discount rate of 6%.

Values from the first and second stage would be added together to determine the value of the stock

First stage

Present value in year 1 = ($3.2 x 1.18) / 1.087 = $3.47

Present value in year 2 = ($3.2 x 1.18²) / 1.087² = $3.77

Present value in year 3 = ($3.2 x 1.18³) / 1.087³ = $4.09

Present value in year 4 = ($3.2 x 1.18^4) / 1.087^4 = $4.44

Second stage

($3.2 x 1.18^4 x 1.06) / (0.087 - 0.06) = 243.57

Value of the stock = $3.47 + $3.77 + $4.09 + $4.44 +  243.57 = $259.34

7 0
2 years ago
he country Grupindor recently experienced a drastic increase in inflation. This led to the depreciation in the value of its curr
GaryK [48]

Answer:

The correct answer is economy of the nation.

Explanation:

Inflation has a consequence in companies, but we can say that it can cause an initial increase in benefits since wages and other costs are modified based on price variations, that is, they are altered once prices They have varied.

This results in increases in dividend payments, interest and capital investment. In addition, many people can increase their spending with the feeling that buying later can be more expensive. But this is the first initial action in some cases.

In this way, inflation at the national level can lead to an improvement in the trade balance if the same amount of goods can be sold but at higher prices. Even in spite of this, it is a value that distorts normal economic activity, since on the other hand it reduces the purchasing power of people and can lead to a reduction in consumption since you can not buy more.

4 0
3 years ago
safety equipment like fire extinguishers in fire blankets are used to prevent accidents Is This True Or False
Mkey [24]
False, they are meant to contain accidents if they happen. They are suuuuper important to have around though!!
7 0
3 years ago
Usually, price elasticities of supply areA) positive, because higher prices yield larger quantities supplied.B) considered short
Anna35 [415]

Answer:

A) Positive, because higher prices yield larger quantities supplied.

Explanation:

The correct answer to the question is A) Positive, because higher prices yield larger quantities supplied. The price elasticity of supply determines the change in price as a response to the change in supply of the good or service supplied. This is usually calculated in a figure that determines that if price increases what will be the impact on its supply, which usually is a positive figure.

3 0
3 years ago
Other questions:
  • Assets for a particular business might include: A) cash, accounts payable, and notes payable. B) cash, retained earnings, and ac
    14·1 answer
  • A bond is aa.financial intermediary. b.certificate of indebtedness. c.certificate of partial ownership in an enterprise. d.None
    9·1 answer
  • The communication advantages of social media use by businesses can best be summarized as _____.productivitydistractionself-promo
    8·1 answer
  • When the share of individual income tax collected by the government from people with higher incomes is smaller than the share of
    8·1 answer
  • 2. Business and financial risk The impact of financial leverage on return on equity and earnings per share Consider the followin
    12·1 answer
  • Jimmy establishes a Roth IRA at age 47 and contributes a total of $89,600 over 18 years. The account is now worth $112,000. How
    10·1 answer
  • Explained moral lessons for the life of Okomfo Anokye​
    11·1 answer
  • The following information is taken from the 2022 general ledger of Sunland Company.
    12·1 answer
  • Beginning inventory, purchases, and sales for Item Zeta9 are as follows: Oct. 1 Inventory 200 units at $30 7 Sale 160 units 15 P
    5·1 answer
  • Scientific management is the study of work methods to improve the productivity of _____.
    5·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!