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Elden [556K]
3 years ago
5

3. You run a construction firm. You have just won a contract to construct a government office building. It will take one year to

construct it, requiring an investment of $10 million today and $5 million in one year. The government will pay you $20 million upon the building’s completion. Suppose the cash flows and their times of payment are certain, and the risk-free interest rate (i.e., the discount rate) is 10%. What is the NPV of this opportunity?
Business
1 answer:
Gre4nikov [31]3 years ago
3 0

Answer:

NPV= $1,983,471.1

Explanation:

Giving the following information:

To calculate the present value you need to use the Net Present Value. The NPV is the difference between the present value of cash inflows and the present value of cash outflows over a period of time.

The formula is:

NPV= -Io + ∑[Rt/(1+i)^t]

where:

R t​     =Net cash inflow-outflows during a single period t

i=Discount rate of return that could be earned in alternative investments

t=Number of timer periods

NPV= -10,000,000 - 5,000,000/1.10 + (20,000,000/1.10^2)

NPV= $1,983,471.1

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With brick-and-mortar toy stores closing, board game manufacturers expect to have trouble finding as many consumers interested i
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Answer:

This is how the market for board games would be affected in the explanation below

Explanation:

Because the manufacturers of the board game expect that the demand for their games would experience a decline, they would have to adjust their Production according to the decline. This is going to shift supply curve to the left, because of the decline in the production. Then equilibrium price would then increase as the quantity decreases because of the shift of the supply curve to the left.

3 0
3 years ago
If an activity generates a positive externality, the government can increase total economic surplus by ___ the activity, and if
Fofino [41]

Answer:

C. subsidizing: taxing

Explanation:

An activity generates a positive externality if the benefits of economic activities to third parties exceeds its costs.

Example of activities that generate positive externality are education and research.

Government ought to encourage the production of activities that generates postive externality. One of the ways this can be done is through Subsidy. Subsidy reduces cost of production and increases production.

An activity generates negative externality if the benefits of economic activities to third parties is less its costs.

An example of negative externality is pollution.

Government can discourage activities that generates negative externality by taxation. Taxation increases the cost of production and discourages production.

I hope my answer helps you

8 0
3 years ago
4.You can buy a machine for $100,000 that will produce a net income, after operating expenses, of $10,000 per year. If you plan
Anon25 [30]

Answer:

$124,966.9

Explanation:

The computation of the market or resale value is shown below:

$100,000 = $10,000 ÷ (1.15^1) + $10,000 ÷ (1.15^2) + $10,000 ÷ (1.15^3) + $10,000 ÷ (1.15^4) + Resale value  ÷ (1.15^4)

$100,000 = $8695.65 + $7561.44 + $6575.16 + $5717.53 + Resale value ÷ 1.749006

Resale value ÷1.749006 = $71,450.22

So, the resale value is  = $124,966.9

We simply applied the present value formula

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3 years ago
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1.) In the United States, nearly two thirds of Starbucks outlets are company owned; the remaining one-third is operated by licen
dexar [7]

Answer:

In United States, the organization has its own outlets on the grounds that the organization S-B has all the assets it requires to open its own stores.  

  • It just licenses a little segment of its business in U.S and that excessively just to those areas where store network is hard to keep up.  
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Organization S-B works in remote markets significantly through permitting on the grounds that purchasing its own stores in different nations would be expensive and dangerous.  

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