All categories

3 years ago

Which one of the following is an example of an incremental cash flow for Project A?

Business

1 answer:

gtnhenbr [62]3 years ago

3 0

Answer:

c) The rental cost of some new machinery that will be acquired for Project A

Explanation:

Incremental cash flow for a project relate to those activities undertaken specifically for the project which involve a fixed outlay of cash flows.

It means possible increase or decrease in cash flows when a new project is taken up. Such cash flows are entirely attributable to the project under consideration.

In the given case, property taxes, insurance were pre existing costs i.e which would've been incurred anyway.

Similarly, test marketing cost to know of project viability is not a recurring but one time cost and most importantly it is incurred prior to taking up the project.

Contractual annual salary of the president is not attributable to Project A alone.

Hence, the rental cost of some new machinery that will be specifically acquired for Project A would be termed as incremental cash flow for Project A.

You might be interested in

Due to a downturn the wage of entry level workers has declined by 10 per cent, as a

lilavasa [31]

The cross elasticity of demand for senior workers is 1.5. Senior workers and entry-level workers are gross complements.

The scale effect dominates in this example.

If the wage of the entry level workers increase, the demand curve would shift to the right.

<h3>What is the crosss price elasticity?</h3>

Cross price elasticity of demand measures the responsiveness of quantity demanded of good A to changes in price of good B.

Cross price elasticity = 15% / 10 = 1.5

Complement goods are goods or resources that are used together. As a result of the decline in wages, senior workers would be laid off. This means that senior workers and entry level workers work together.

<h3>What is the effect on the demand curve if the wages of entry level workers increase?</h3>

If the wage of the entry level workers increase, the demand for senior workers wouuld increase. This would lead to a shift to the right of the demand curve for senior workers.

To learn more about cross price elasticity, please check: brainly.com/question/26054575

8 0

2 years ago

A bakery is one of many that operate in the bread industry. The market demand curve for bread is downward-sloping. The bakery in

RoseWind [281]

Answer: (d.)The bakery faces a flat demand curve.

Explanation:

The bakery faces a flat demand curve because a firm in a perfectly competitive market is a price taker and the demand curve for a firm is equal to the price the supply curve is a part of Marginal cost above Average variable cost , so the supply curve is upward sloping . The bakery is in the perfectly competitive market so it can earn positive, negative or zero economic profit in the short run and zero economic profit in the long run.

7 0

3 years ago

Antipoverty programs that are set up so that the amount of government benefits will decline substantially as poor people earn mo

Alex17521 [72]

Antipoverty programs that are set up so that the number of government benefits will decline substantially as poor people earn more income typically create a <u>poverty trap.</u>

What is the Poverty trap?

A "poverty trap" is a collection of self-reinforcing factors that causes nations to start out poor and stay that way. Because poverty breeds poverty, existing poverty directly contributes to future poverty.

In the United States, poverty traps are areas, counties, or localities with chronic institutional and economic issues that result in persistently high rates of poverty. Residents are frequently stuck in unfavorable situations where there is no chance for advancement or economic progress.

The majority of nations are enjoying some growth, and poor people don't seem to have significantly different income dynamics from those who earn more, which shows that poverty traps are not common at either the national or individual level.

Learn more about poverty traps here:

brainly.com/question/14995157

#SPJ4

6 0

1 year ago

A former employee of your firm was dismissed when it was suspected that she had stolen from the petty cash account. It could not

Flura [38]

Answer:

I would reccomend her, but I would tell the other company to be careful. She may not have been proven guilty, but it doesn not mean that she did not do it. Now, it is all up to the company to make the choice.

Explanation:

5 0

3 years ago

Great Lakes Packing has two bond issues outstanding. The first issue has a coupon rate of 3.50 percent, a par value of $1,000 pe

katrin [286]

Answer:

2.9652%

Explanation:

to determine the cost of debt we must use the FMV of the bonds plus the YTM:

first bond:

FMV = 1.09 x $1,000 = $1,090 x 3,600 bonds = $3,924,000

YTM = {C + [(F - P)/n]} / [(F + P)/2] = {17.5 + [(1000 - 1090)/16]} / [(1000 + 1090)/2] = (17.5 - 5.625) / 1045 = 1.136% x 2 = 2.27% annual

second bond:

FMV = 0.95 x $2,000 = $1,900 x 3,950 bonds = $7,505,000

YTM = {C + [(F - P)/n]} / [(F + P)/2] = {59.4 + [(2000 - 1900)/42]} / [(2000 + 1900)/2] = (59.4 + 2.38) / 1950 = 3.168% x 2 = 6.34% annual

total debt = $3,924,000 + $7,505,000 = $11,429,000

weighted average after tax cost of debt:

{($3,924,000/$11,429,000 x 2.27%) + ($7,505,000/$11,429,000 x 6.34%)} x (1 - 0.40) = (0.779% + 4.163%) x 0.6 = 4.942% x 0.6 = 2.9652%

6 0

3 years ago