Answer:
The net present values of the two investments are $46000 and $55000 respectively .
However, the present value index for the first investment is 1.40 while the second investment has 1.2 as net present value index.
Judging from net present value,the the second investment is preferable,but since net present value is an absolute value,it does not relate the net present value to the underlying outlay,the first investment is preferred based on present value of index 1.4
Explanation:
The net present value for both alternatives is shown below:
$ $
Present value of cash inflows 160000 335000
Present value of cash inflows (114000) (280000)
Net present value 46000 55000
Present value index=present value of inflows/present value of outflows
First investment =160000/114000=1.40
Second investment =335000/280000=1.2
Answer:
b. the average number of days to collect receivables is 64.
Explanation:
Average number of days to collect receivables = Accounts Receivable ÷ ( Sales / 365)
= $46,000 ÷ ($266,000 / 365)
= 63.10 or 64
Conclusion
The average number of days to collect receivables is 64
Answer:
A positive constant
Explanation:
the hedge ratio cimparez the amount of a position that is hedged to the entire position