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Oduvanchick [21]
3 years ago
9

The owners of a chain of​ fast-food restaurants spend $ 25 million installing donut makers in all their restaurants. This is exp

ected to increase cash flows by $ 10 million per year for the next five years. If the discount rate is 6​%, were the owners correct in making the decision to install donut​ makers?
Business
1 answer:
RideAnS [48]3 years ago
4 0

Answer:

yes as it net present value is $24.17 million

Explanation:

In this question we have to find out the net present value which is shown below

              (In millions)                                            (In millions)

Year Cash flows Discount rate 6% PV of cash inflows  

0            -$25                     1                          -$25  (A)

1              $10                  0.9434                   $9.43

2              $10                   0.8900                   $8.90

3               $10                   0.8396                   $8.40

4              $10                   0.7921                   $7.92

5             $10                    0.7473                   $7.47

6             $10                    0.7050                    $7.05

Present value                                       $49.17   (B)

Net present value                              $24.17  (A - B)

As we can see that the net present value comes in positive which means it generated the return in near future so the decision should be yes

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When building a business model canvas, the ________ is where your offering goes - how you plan to solve the pains or create the
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Answer: value proposition

Explanation:

In simple terms, a value proposition makes a case for why a customer should pick one product over another, citing the unique value the product provides over its contenders.

The Business Model Canvas value proposition provides a unique combination of products and services which provide value to the customer by resulting in the solution of a problem the customer is facing or providing value to the customer. This is the point of intersection between the product you make and the reason behind the customer’s impulse to buy it. A product can have a single value proposition or multiple value propositions.

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3 years ago
Depreciation expense is added back to net income when preparing the cash flow from operating activities section because deprecia
luda_lava [24]

Answer:

Depreciation expense is added back to net income when preparing the cash flow from operating activities section because depreciation represents a non cash reduction to net income. Depreciation is a non cash reduction because it notes down the the reduction in the value of an asset due to use as an expense and because the company isn't making any cash transactions due to depreciation of assets therefore it is a non cash expense and this is why it is added back to net income when preparing cash flow from operating activities.

Explanation:

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3 years ago
Select the items that describe how business investments can cause economic growth.
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A five-year project has a projected net cash flow of $15,000, $25,000, $30,000, $20,000, and $15,000 in the next five years. It
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The value of Net present value is $12,895.45.

Given that

initial investment = $50,000

1st-year cash flow = $15,000

2nd-year cash flow =$ 25,000

3rd-year cash flow =$ 30,000

4th-year cash flow = $20,000

5th-year cash flow = $15,000

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using formula

NPV = \frac{R}{({1+i})^t}

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<h3>What is Net Present value?</h3>
  • The current value of a future stream of payments from a business, project, or investment is determined using net present value, or NPV.
  • You must predict the timing and size of future cash flows in order to determine NPV, and you must choose a discount rate that is equal to the least allowable rate of return.
  • Your cost of capital or the rewards offered by substitute investments with comparable risk may be reflected in the discount rate.
  • Positive NPV indicates that the rate of return on a project or investment will be higher than the discount rate.
  • to learn more about Net present value with the given link

brainly.com/question/14293955

#SPJ4

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The gross requirements of a given component part are determined from ______________________.
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Answer: The correct answer is "c) planned orders of the parent".

Explanation: The gross requirements of a given component part are determined from <u>planned orders of the parent</u>

Without the release of planned orders from immediate parents, the gross requirements of a given component part could not be determined.

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