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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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Rolfes Company purchased merchandise on account from a supplier for $7,500, terms 1/10, n/30. Rolfes Company returned $1,200 of
Blababa [14]

Answer:

$6,237

Explanation:

The computation of the cash required for the payment is shown below:

= Merchandise amount - return and allowances - discount

= $7,500 - $1,200 - $63

= $6,237

The discount = (Merchandise amount - return and allowances) × discount rate

= ($7,500 - $1,200) × 1%

= $63

Simply we consider the items i.e merchandise purchase amount, returned merchandise amount and the discount given amount

6 0
3 years ago
Select the correct answer.
Gwar [14]

Answer:

I believe the answer is B. 30 percent

<em>good luck, i hope this helps :)</em>

<em />

3 0
3 years ago
Read 2 more answers
A restaurant bill is made up of the following: $12.50 for starters, $28.55 for main courses, and $8.95 for deserts, plus a 15% s
Alina [70]

Answer:

The bill is $57.5

Explanation:

The computation of bill is shown below:

= Price for starters + price for main course + price for deserts + service charge tax

= $12.50 + $28.55 + $8.95 + $7.5

= $57.50

The service charge would be calculated by considering all food costing.

In mathematically

= Service tax rate × ( Price for starters + price for main course + price for deserts)

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7 0
3 years ago
If a monopsonist offers a wage of $6, he finds that 1,200 people are willing to work for him. This means that the:
lbvjy [14]

If a monopsonist offers a wage of $6, he finds that 1,200 people are willing to work for him. This means that the: a marginal factor cost is $6.

<h3>Monopsonist</h3>

If a monopsonist offers a wage of $6, he finds that 1.200 people are willing to work for him. This means that the O a. total wage cost is $1,200. b. marginal factor cost is $6. O c. total wage cost is $7.200. o d. $6 wage is too high. o e marginal factor cost is $200.

Learn more about monopsonist here :

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7 0
2 years ago
The probability of survival for an international business increases if it: Group of answer choices A. enters a national market a
Vika [28.1K]

Answer:

A. Enters a national market after several other foreign firms have already done so.

7 0
3 years ago
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