Answer:
- $651,234.54
Explanation:
Data provided in the question:
Cost of remodeling = $3.4 million = $3,400,000
Rent paid each year = $820,000
Duration, n = 5 years
Discount rate, r = 15% = 0.15
Now,
Present value of the amount rent paid each year = A × ![\left[ \frac{1-(1+r)^{-n}}{r} \right]](https://tex.z-dn.net/?f=%5Cleft%5B%20%5Cfrac%7B1-%281%2Br%29%5E%7B-n%7D%7D%7Br%7D%20%5Cright%5D)
Here,
A = Rent paid each year
Thus,
Present value of the amount rent paid each year
= $820,000 × ![\left[ \frac{1-(1+0.15)^{-5}}{0.15} \right]](https://tex.z-dn.net/?f=%5Cleft%5B%20%5Cfrac%7B1-%281%2B0.15%29%5E%7B-5%7D%7D%7B0.15%7D%20%5Cright%5D)
= $820,000 × 3.352153
= $2,748,765.46
Therefore,
Benefit = Present value of the amount rent paid - Cost of remodeling
= $2,748,765.46 - $3,400,000
= - $651,234.54
Answer:
$6 per game
Explanation:
The probability of getting a head on a toss is given as 0.5 for a fair coin.
Therefore the expected number of times that the coin would be tossed to get the first head would be given as the expected value of the geometric distribution with parameter of p = 0.5. therefore the expected value here would be 1/0.5 = 2
Therefore, we expect to get 22 = 4 dollars but we paid initially $10, therefore in long run we expect to lose $6 per game.
Answer:
COnsider the following calculations
Explanation:
1. $
Annual Savings in Part-time help 6300
Added Contribution Margin from expanded sales 2600x1.50 3900
Annual Cash Inflows 10200
2.
NPV @ 5%
= Present Value of Cash inflows - Present Value of Cash outlfows
= [10200x 5.076] - 47300
= $4475
NPV @ 10%
= Present Value of Cash inflows - Present Value of Cash outlfows
= [10200x4.355] - 47300
= -$2779
Internal Rate of Return = Lower Rate + [Lower rate NPV/ (Lower rate NPV - Higher rate NPV] x Difference in rates
= 5 + [4475 / (4475+2779)] x 5
= 8%
3. NPV @ 5%
= Present Value of Cash inflows - Present Value of Cash outlfows
= [(10200x 4.355) + (12000x0.564)] - 47300
= $3889
NPV @ 15%
= [(10200x 3.784) + (12000x0.432)] - 47300
= -$3519
Internal Rate of Return = Lower Rate + [Lower rate NPV/ (Lower rate NPV - Higher rate NPV] x Difference in rates
= 10 + [3889 / (3889+3519)] x 5
= 13%
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Answer:
Its operating expenses were $ 3.588 B
Explanation:
The operating ratio is the ratio of operating expense to the operating or revenue generated.
This ratio is used for comparison of results from the operations of various industries.
Given that the operating ratio of 78% and the operating revenue is $4.6B, the operating expense T may be computed as
78% = T/4.6 * 100%
T = 4.6 *.78
= $3.588 B
