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nasty-shy [4]
3 years ago
14

A store manager must decide how many rug cleaners to rent to customers. The manager estimates that the first would yield $200 a

year, the second $150, the third $75, and the fourth $50. If the interest rate is 12 percent and each rug cleaner costs $500/yr (all costs included), including replacement cost, how many should the manager rent?
Business
1 answer:
Harrizon [31]3 years ago
5 0

Answer:

The store manager must decide to buy 3

Explanation:

Given that:

  • The first:  $200 a year
  • The second $150
  • The third $75,
  • The fourth $50
  • Interest rate is 12 percent
  • Investment: $500

As we know that the rate of return will be: Income / Investment

So the rate of return of:

  • The first:  $200 / $500 = 0.4 = 40%
  • The second $150 / $500 = 0,3 = 30%
  • The third $75 / $500 = 0.15 = 15%
  • The fourth $50 / $500 = 0.1 = 10%

Only three rug cleaners have the rate of return greater than the interest rate so the store manager must decide to buy 3

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Answer:

B.right, sell

Explanation:

Put option is a contract giving owner the right not obligation to sell the underlying asset or stocks at predetermined price (strike price) before the specified time. Put option protect the owner from loss if the price of underlying asset goes below the strike price in the specified period of time. It also help the owner to sell the stock obove the market price  as specified earlier to earn some profit for owner. There is another option available in contrast to put option is called Call option, which gives right to buy underlying asset at specified price and time. These option help the owner to avoid loss and earn profit.

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What is the main reason why you need a financial reserve?
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An auditor wants to verify that for a given inventory acquisition, (1) the merchandise was ordered by the company, (2) the merch
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A firm has determined its cost of each source of capital and its optimal capital structure which is comprised of the following s
barxatty [35]

Answer:

10.25%

Explanation:

Data provided in the question:

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Preferred stock = 15%, after-tax cost = 10%

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Now,

The  weighted average cost of capital for this firm will be calculated as:

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