Let us see it from a cost-efficiency point of view. We have that every unit of the first selles costs 40$. But the total cost might be higher, since there is a chance for defect. On average, on 3% of the cases the defect will happen and it will cost him 500$. Hence, on average, a fence unit from producer a costs 40$ and has a repair cost of 3%*500$=15$. The total thus is 55$. For the second provider of fences, the standard cost is 50$. Similarly, the average repair cost is 0,5%*500$=2,5$. Hence, the total cost per unit is 52,5$ (total cost=upfront payment+repair costs). We see thus that the lady should win the bid; even if you pay more upfront, the difference in durability makes up the cost difference.
Whatas the question i work at chilis so im a genius at servers answers with the needed things and idk where im going i hate my job and life but like besides the pioint wheres the question
Answer:
Chen should buy the new machine since it produces a positive NPV of $1,294
Explanation:
Summary of the Project Cash Flows is as follows :
Year 0 = ($120,000)
Year 1 to Year 10 = $18,900
The Project cost of capital = 9%
Calculation of the Project`s NPV :
<em>NPV can be calculated from this summary using a financial calculator as :</em>
<em>CF0 = ($120,000)</em>
<em>CF1 = $18,900</em>
<em>Nj = 10</em>
<em>i = 9 %</em>
<em>NPV = ? </em>
<em>NPV = $1,293.73 or $1,294</em>
The Project is accepted only if it has a Positive NPV
Conclusion,
Chen should buy the new machine since it produces a positive NPV of $1,294.
Answer:
The correct option is $1.14
Explanation:
D1=D0*(1+g)
D1 is year 1 dividend
g growth rate of dividend of 15%
D1=$0.54*(1+15%)
D1=$0.54*(1+0.15)
D1=$0.54*1.15
D1=$0.621
00
D2=$0.621*1.15
D2=$0.71415
We need to apply the discount factor to each of the dividends,the discount factor is 1/(1+r)^n
r is the rate of return of 11%
n is the relevant year
present value of year 1 dividend=$0.62100*1/(1+11%)^1
present value of year 1 dividend=$0.559459459
Present value of year 2=$0.71415*1/(1+11%)^2
Present value of year 2=$0.579620161
Total value present values=$0.559459459
+$0.579620161
=$1.14
Answer:
The total opportunity cost of investing in the business is explained below:
Explanation:
Opportunity cost is also known as alternative cost, the cost incurred from giving up one benefit for an alternative. Kelly withdrew 1000$ from his account, which was giving him a 3% profit annually, and the total opportunity cost of withdrawing 1000$ is 30$ annually. Similarly, he withdrew another 2000$ at 7% interest rate that is 140$which he has to pay annually.
30$ + 140$ =170$
The total annual opportunity cost is 170$
