Answer:
1. IRR for the first investment: 13%
2. IRR for the second investment: 10%
3. IRR for the first investment give changes in cash flow: 4%
Explanation:
IRR is the discount rate that will bring project's net present value to 0. Apply this, we will calculate IRR in each given scenario:
1. -900,000 + (300,000/IRR)/ [ 1 - (1+IRR)^-4] = 0 <=> IRR = 13%
2. -755,000 + 400,000/(1+IRR) + 500,000/(1+IRR)^2 = 0 <=> IRR = 10%
3. -900,000 + (250,000/IRR)/ [ 1 - (1+IRR)^-4] = 0 <=> IRR = 4%
(all the answers have been rounded to whole percentage values as required in the question).
Answer:
Consumers buy and use the products that producers make and sell to the public. So the roles are consumers=buy while producers=make.
Answer:
corporate philanthropy.
Explanation:
Corporate philanthropy refers to an act done by a corporation or business organization with a motive to promote the welfare of a society by charitable donations of funds
Since in the question it is mentioned that the Jessica already aside the amount of $10,000 for the nonprofit organization and already it meets the requirement of government to contribute 4% of the company revenue for the social benefits
So this given situation represents the corporate philanthropy.
Answer:
A
Decision: Project A should be selected.
B
NPV =$40,909.09
Explanation
A
<em>Since the two projects would achieve the same objectives, the project with the lowest initial cost should be selected.</em>
Kindly note that the $2 million already spend on project A is not a relevant cash flow because it is sunk cost. Hence, the initial cos outlay of project A will be $2 million which will be spent should the project be undertaken.
Project B on the other hand would cost $1.5 million in initial cost which is $500,000 cheaper than project A.
Decision: Project A should be selected.
B
<em>The NPV is the difference between the PV of cash inflows and the PV of cash outflows. A positive NPV implies a good investment decision and a negative figure implies the opposite. </em>
NPV of an investment:
NPV = PV of Cash inflows - PV of cash outflow
Initial cost = 50,000
The NPV of the savings
NPV = 100,000× 1.1^(-1) - 50,000= 40,909.09
NPV =$40,909.09
