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butalik [34]
3 years ago
11

A project costs $12,800 and is expected to provide a real cash inflow of $10,000 at the end of each of years 1 through 5. Calcul

ate the net present value of this project if inflation is expected to be 4% in each year and the firm employs a nominal discount rate of 10.76%. $26,311.15 $33,522.30 $28,756.79 $33,294.07
Business
1 answer:
Lemur [1.5K]3 years ago
6 0

Answer:

Net Present Value = $28756.79

Explanation:

First we need find the real rate of interest

Real rate of interest = (Nominal rate of interest - Inflation rate )

Real Rate of interest = (10.76% - 4%)

Real of Interest = 6.76%

Now using stream of cash flows and discount the at 6.76%

0 -12800              1.000        

1 10000               0.937

2 10000               0.877

3 10000               0.822

4 10000               0.770

5 10000               0.721

Through multiplying discount value with cash flow we get the discounted value of cash flows.

0 -12800      x        1.000      = -12800  

1 10000       x       0.937      =     9370

2 10000       x        0.877     =     8770

3 10000       x        0.822     =    8220

4 10000       x        0.770      =   7700

5 10000       x        0.721       =  7210

Adding the discounted cash flows we get the value of Net present value and that is equal to $28756.79

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Which of the following is not correct? a. The consumer price index gives economists a way of turning dollar figures into meaning
Marina CMI [18]

Answer:

The consumer price index is used to measure the quantity of goods and services that the economy is producing.

Explanation:

CPI  or consumer price index is a measure of changes in the average prices of a basket of products and services in a given time. The selected goods and services are a fair representation of consumption expenditure in the economy. Economists use the CPI as a Macroeconomic indicator of inflation.

As a measure of inflation, the CPI statistics communicate increases or decreases in the prices of goods and services in the economy. It forms a basis for policy decisions by the government that aid in the prevention of reduced purchasing power of the dollar.  CPI is all about changes in prices and nothing to do with the production of goods and services.

5 0
3 years ago
Shackleford corporation net income this year is $800,000. The company generally retains 35% of net income for reinvestment. the
ZanzabumX [31]

Answer:

A. $22.61

Explanation:

First,

find the growth rate(g);

g = ROE *retention  rate

retention  rate = 35%

ROE = Net income/value of equity

ROE = 800,000/5,000,000 = 0.16

Therefore, g = 0.16*0.35

g =0.056 or 5.6%

Price = \frac{D0(1+g)}{(r-g)}

D0 = Recently paid dividend

g = growth rate

r = required return

Price = \frac{1.37(1.056)}{0.12-0.056} \\ \\ =\frac{1.44672}{0.064} \\ \\ =22.605

Therefore, the value of this stock is $22.61

4 0
2 years ago
The VP of Customer Experience at an international hotel chain is constantly looking for ways to improve customer service, whethe
mojhsa [17]

Answer:

The correct answer is Points of interaction.

Explanation:

The term touchpoint refers to all the points of contact between the client and a brand “that imply an interaction with a human need, at a specific time and place” (Risdon, 2013).

If there is an interaction then there is also an exchange of value between the individual and the organization. And professionals in Customer Experience have to understand what kind of value flows. We must ensure that the perceived value is greater than the cost.

On the other hand, the fact that an interaction occurs before a specific human need tells us that we must know what drives it. The need is what marks the nature of the interaction. In other words, the design of an experience changes radically depending on the needs involved.

8 0
3 years ago
Halp! I need an answer right away<br> Thank you
garri49 [273]

Answer:

see below

Explanation:

Revenue is the money a business receives by engaging in its normal trading activities. It is the money paid to the business for selling goods or services to clients.  For a business to be profitable, its revenues must exceed expenses.

If the business owner has revenue of $2000 and is finding it difficult to stay in business, it means the expenses are almost or more than $2000. Revenue, as stated, is generated from sales. Expenses refer to the costs incurred in generating revenue. They include the cost of materials, rent, wages, and all other business-related expenses.

When the expenses are more than revenue, the business suffers losses. This business owner is probably incurring losses; that's why they have a challenge in staying open.

7 0
3 years ago
Dr. regan was hired by the siri company to assist them with retaining their employees without lowering profits and expectations.
Anestetic [448]
Dr. Regan was hired to help retain employees by the Siri corporation without losing money and expectations. He was the one who suggested that employees could decorate their work spaces and this would help employees feel more comfortable where they have to work 8 or more hours per day. This then helped the company by people not calling in and less people quit their jobs. Dr. Regan was most likely an industrial and organizational psychologist. Many companies hires these types of psychologists to help their employees with stress at work and to put employees at ease. 
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