The price of the bill is closest to

Clark Oil and Gas incurred costs of $15.3 million for the rights to extract resources from a natural gas deposit. The company ex

miss Akunina [59]

Answer and Explanation:

The computation is shown below

Depletion expense per cubic feet would be

= Total cost ÷ Total cubic feet

= $15.3 million ÷ 8 million

= $1.9125 per cubic feet

Now

Depletion for year 1

= Number of cubic feet extracted × Depletion per cubic feet

= 800,000 × $1.9125

= $1,530,000

And, for the depletion for year 2

= 1,600,000 × $1.9125

= $3,060,000

7 0

3 years ago

River Wild is considering purchasing a water park in Charleston, South Carolina, for $ 2,050,000. The new facility will generat

Kipish [7]

Answer:

1. Payback period = 3.94 Years

The ARR is $262,750

The NPV is $937,102,

The approximate IRR of this investment is 20.87%

2. The Company should invest in this project as it NPV is positive, payback period is lower than the required Payaback period, ARR is greater than the minimum ARR, IRR is greater than cost of capital

Explanation:

In order to calculate the Payback period ARR, the NPV, and the approximate IRR of this investment we would have to use the following formula:

Payback period = Initial Investment/Annual net Cash inflow

Payback period = $ 2,050,000/$ 520,000

Payback period = 3.94 Years

ARR = Average Net Income/Average Investment

Average Net Income = Annual net Cash Flow - Annual Depreciation

Average Net Income = $ 520,000-$ 2,050,000/8

Average Net Income = $262,750

Average Investment = ($ 2,050,000+0)/2 = $1,025,000

ARR = $262,750/1,025,000

ARR = 25.63%

NPV = -Initial Investment + Annual Cash Inflow *(1-(1+r)^-n)/r

NPV = -$ 2,050,000 + $ 520,000*(1-(1+10%)^-8)/10%

NPV = 937,102.15

IRR = rate(nper,pmt,pv,fv)

IRR = rate(8, $ 520,000,-$ 2,050,000,0)

IRR = 20.87%

The Company should invest in this project as it NPV is positive, payback period is lower than the required Payaback period, ARR is greater than the minimum ARR, IRR is greater than cost of capital

6 0

3 years ago

When starting a new job, the form you complete to determine how much tax to withhold from your paycheck is called the _______.

VMariaS [17]

You would fill out a W-4 form. Hope this helps:)

7 0

3 years ago

Read 2 more answers

Suppose that preferences over private consumption C and public goods G are such that these two goods are perfect substitutes, th

Temka [501]

Answer:

Please see explanation below.

Explanation:

Public goods are goods consumed collectively, they are provided for all members of a community,

no one can be excluded from their consumption. The consumption by one person does not decrease the consumption possibilities for others. Public goods are available for everybody without paying, and these goods cannot be rationed: they are either provided for the whole community, or for no one. Examples of public goods include the public lighting system, public roads, radio broadcasts, national defence, lighthouses, town pavements, etc.

Private goods, on the other hand, are goods consumed individually, and if a unit has been consumed by

someone, then no one else can also consume the same unit. Private goods are scarcely available, and consuming a unit will decrease the amount available for further consumption. Therefore consumers compete for private goods, i.e. private goods are rival in consumption. Consumers can consume them if they pay the price, non-payers are excluded from consumption.

In the first scenario, given that both the private good and public good are perfect substitutes, the optimum quantity produced by the government is at the point where marginal social cost is equal to the marginal social benefit. This optimum output is lower than that of the private firm because the price of public good is higher than price of private good (since marginal social cost > marginal private cost).

If b increases, that means consumers are willing to give up more units of public goods for one unit of the private good. Therefore, the quantity produced by the government will reduce.

For the second part of the question: C = aG, where a > 0.

This implies that equal or more units of the private good is consumed with a particular units of public good. The optimum output still remain at the point where marginal social cost is equal to marginal social benefit but this output level is lower than if the two goods were to be perfect substitutes.

7 0

4 years ago

Suppose that France and Sweden both produce oil and cheese. France's opportunity cost of producing a pound of cheese is 3 barrel

Anni [7]

Answer:

FRANCE has a comparative advantage in the production of cheese and SWEDEN has a comparative advantage in the production of oil.

Comparative advantages result form the lowest opportunity costs. In this case, France's opportunity cos tot produce cheese is lower, while Sweden's opportunity cost of producing oil is lower.

France can gain from specialization and trade as long as it receives more than 3 BARRELS of oil for each pound of cheese it exports to Sweden. Similarly, Sweden can gain from trade as long as it receives more than 1/11 POUNDS of cheese for each barrel of oil it exports to France.

Based on your answer to the last question, which of the following terms of trade (that is, price of cheese in terms of oil) would allow both Sweden and France to gain from trade?

a. 6 barrels of oil per pound of cheese
c. 4 barrel of oil per pound of cheese

5 0

3 years ago