Answer:
No
Explanation:
The estimation of the net present value is shown below:
= Present value of all yearly cash inflows after applying discount factor - initial investment
where,
The Initial investment is $180,000
All yearly cash flows would be
= Annual cost savings × PVIFA for 8 years at 12%
= $35,000 × 4.9676
= $173,886
Refer to the PVIFA table
Now set these values to the formula above
So, the value would equal to
= $173,886 - $180,000
= -$6,134
Since the net present value is negative, so the project should not be accepted
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Answer:
Elastic demand
Unit elastic demand
Inelastic demand
Explanation:
Elasticity of demand measures the degree of responsiveness of quantity demanded to changes in price.
Elasticity of demand = percentage change in quantity demanded/ percentage change in price.
Denand is elastic if when price is increased, the quantity demanded changes more than the increase in price. Quanitity demanded is more sensitive to changes in price.
If price is increased, the quantity demanded falls and as a result the total revenue earned by sellers falls.
The elasticity of demand is usually greater than 1 when demand is elastic.
Demand is unit elastic if a change in price has the same proportional change on quantity demanded. The coefficient of elasticity is equal to one.
If price is increased, the quantity demanded changes by the same proportion so there's no change in total revenue of sellers.
Demand is inelastic if a change in price has little or no effect on quantity demanded.
Coefficient of elasticity is usually less than one.
If price is increased, there is little or no change in the quantity demanded and as a result the revenue earned by sellers increase.
I hope my answer helps you
