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vivado [14]
3 years ago
12

A store offers two payment plans. Under the installment plan, you pay 25% down and 25% of the purchase price in each of the next

3 years. If you pay the entire bill immediately, you can take a discount of 10% from the purchase price. Assume the product sells for $100. a-1. Calculate the present value of the payments if you can borrow or lend funds at an interest rate of 5 percent. (Do not round intermediate calculations. Round your answer to 2 decimal places.) a-2 Which is a better deal
Business
1 answer:
aev [14]3 years ago
6 0

Answer:

a-1. The present value of Plan 1 = $93.08

a-2. The deal 2 which involves paying immediately adn taking the 10% discount is better.

Explanation:

a-1.

The interest rate of 5% is taken as the discount rate to convert future cash flows into the present value.

The First payment plan with installments has a present value of,

Present Value-Plan 1 = 25 + 25/1.05 + 25/1.05² + 25/1.05³ = $93.08

a-2.

The first plan will cost $93.08 in the present value.

The second plan will involve immediate payment and a discount of 10%vwhch makes the present value of plan 2 as $90 (100 - (100*0.1)).

Thus, the second deal or deal involving immediate payment and taking the discount is better.

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A company's ____________ is the percentage of the total target market for the product that belongs to the company. A. Market sat
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Market share can be regarded as the percentage of the total revenue that is been made in a particular market or in a business.

This serves as the amount of money that the company is able to make off the market.

Therefore, option B us correct because company's market share serves as the percentage of the total target market for the product.

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5 0
2 years ago
Annual demand for an item is 11,000 units with the cost per unit at $250. The holding rate is 10% and the order cost is $14.00 p
frutty [35]

Answer:

93 units

Explanation:

Annual demand for an item = 11,000 units

cost per unit = $250

holding rate = 10%

Order cost = $14.00 per order

No. of days in a year = 260

Lead-time = 2 days

Average\ daily\ demand=\frac{Annual\ demand\ for\ an\ item}{No.\ of\ days\ in\ a\ year}

Average\ daily\ demand=\frac{11,000}{260}

                                              = 42.3 units

For a service level of 97%, the value of z is 1.881

Therefore,

Reorder point:

= Average daily demand × Lead time + Standard deviation of the daily demand × no. of standard deviation corresponding to service level probability × \sqrt{Lead\ time}

= (42.3 × 2) + (3 × 1.88 × \sqrt{2})

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Which best describes the purpose of using cost-benefit analysis?
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