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Ierofanga [76]
3 years ago
6

A small craft store located in a kiosk expects to generate annual cash flows of $6,800 for the next three years. At the end of t

he three years, the business is expected to be sold for $15,000. What is the value of this business at a discount rate of 15 percent
Business
1 answer:
Dafna11 [192]3 years ago
6 0

Answer:

The monetary value is $24,201.23

Explanation:

Giving the following information:

Cash flows:

Year 1= $6,800

Year 2= 6,800

Year 3= 6,800

Year 4= $15,000.

The discount rate is 15 percent.

We need to discount each cash flow to the present value:

PV= FV/(1+i)^n

Year 1= 6,800/1.15= 5,913.04

Year 2= 6,800/1.15^2= 5,141.78

Year 3= 6,800/1.15^3= 4,471.11

Year 4= 15,000/ 1.15^4= 8,576.30

Total= $24,201.23

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SVETLANKA909090 [29]

Answer:

The production range between 1120,000 and 150,000 is called Relevant range

correct option is c) relevant range

Explanation:

given data

normally produces = 120,000 to 150,000 units

to find out

The production range between 1120,000 and 150,000 is called

solution

The production range between 1120,000 and 150,000 is called Relevant range because there are 2 point

  • if Craft, Inc. need to reduce fixed expenses then production volume is reduce less than 120000 unit
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and if expected fixed expenses will not change than the production volume is 120000 units to 150000 units

so that production range between 1120,000 and 150,000 is called Relevant range

correct option is c) relevant range

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