1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Montano1993 [528]
3 years ago
10

Which of the following are present value methods of analyzing capital investment proposals? a. internal rate of return and avera

ge rate of return b. average rate of return and net present value c. net present value and internal rate of return d. net present value and cash payback
Business
1 answer:
Dmitriy789 [7]3 years ago
8 0

Answer:

C) Net present value and internal rate of return

Explanation:

Of the methods discussed, cash payback and average rate pf return does not take into account the time value of money. Cash payback and ARR basically only use the cash flows and profits in relevance to the investment.

Net present value as the name suggests, discounts these cash flows and then subtracts the initial outlay costs and Internal rate of return also discounts the project cash flows so that they equal zero. Thus these two are the options that take into account the time value. IRR often is calculated by discounting cash flows at different rates until the NPV = 0.

Hope that helps.

You might be interested in
James purchased a commercial property at a 7.5% cap rate. The previous owner agreed to finance the deal at 8%. Why may James ele
dlinn [17]

Answer:

James will lose money, since his earnings will be lower than the interest that he must pay.

Explanation:

The capitalization (cap) rate is a ratio calculated by dividing the net operating income over the property asset value.

For example, if James is purchasing the property at $100,000, his net earning will be $7,500 per year (cap rate of 7.5%), but he will have to $8,000 in interests for the property. The interests are higher than the earnings, therefore the leverage is negative.

7 0
3 years ago
Anyone finna be friends with me
Andreyy89

Answer:

yupp

Explanation:

:)

3 0
2 years ago
Bill Buckely has​ split-limit 50​/100​/20 automobile liability insurance on his 2012 Subaru. Driving home from work in a​ snowst
iren2701 [21]

Answer: The answer is given below

Explanation:

It should be noted that the split limits approach is used by several auto insurance policies and this simply combines per person and occurrence approach.

For every accident, three dollars amount are being applied. The first limit is simply a per person limit which is the maximum amount that one injured person will get. The second limit is simply the per occurrence limit which is the maximum amount that all the injured persons will get while the third limit applies during the claim of property damage as it is the maximum amount that will be paid for damages by an insurer to property that results from the accident.

since the split is 50/100/20, it implies that $50,000 medical coverage for every injured person, $100,000 injury coverage for all accident victims and then $20,000 for property damage.

1. Bill's insurance company will pay $20000.

2. Amount Bill will pay:

= ​$17,603​ + ​$3,136​ + ​$9,659 - $20,000

= $30,398 - $20,000

= $10,398

7 0
3 years ago
Anomaly-based intrusion detection systems compare current activity with stored profiles of normal (expected) activity.
Contact [7]

Anomaly-based IDS pg. 250 is an intrusion detection system that compares current activity with stored profiles of normal (expected) activity. While an intrusion detection system that uses pattern matching and stateful matching to compare current traffic with activity patterns (signature) of known network intruders is Pattern-(signature) based IDS pg. 250.





8 0
3 years ago
You bought one of Great White Shark Repellant Co.’s 5.8 percent coupon bonds one year ago for $1,030. These bonds make annual pa
defon

Answer:

total rate of return on the Bond = 9.40%

Explanation:

given data

coupon bonds  = 5.8%

bonds price =  $1,030

maturity time = 14 year

required return on the bonds = 5.1 percent

solution

we know here market price of the bond is Present Value of Coupon Payments + Present face Value  

so that face Valueof  bond = $1,000

and here annual Coupon Amount will be

annual coupon amount = $1000 × 5.80%

annual coupon amount = $58

and here Market Price of the Bond will be

Market Price of Bond = Present Value of Coupon Payments + Present face Value    ......................1

here Present Value of Coupon Payments  at PVIFA 5.10% and 14 Years

Present Value Annuity Inflow Factor (PVIFA) =  \frac{1-(1/(1+r)^t}{r}  ....2

Present Value Annuity Inflow Factor =  \frac{1-(1/(1+0.0510)^14}{0.0510}

Present Value Annuity Inflow Factor = 9.83566

and

Present Value Inflow Factor (PVIF) 5.10%, 14 Years= \frac{1}{(1+r)^t}   ...........3

Present Value Inflow Factor (PVIF) = \frac{1}{(1+0.0510)^14}

Present Value Inflow Factor = 0.49838

so

Market Price of Bond = ( $58 × 9.83566 ) + ( $1,000 × 0.49838 )

Market Price of Bond = $1,068.85

so total rate of return on the Bond will be

total rate of return on the Bond = [ { Annual Coupon Amount + ( Change in Bond Price ) } ÷ Current Price]  ...............4

total rate of return on the Bond = \frac{58+(1068.85-1030)}{1030}

total rate of return on the Bond = 9.40%

5 0
3 years ago
Other questions:
  • Nora was thinking about something else the day her teacher explained the difference between the words "between" and "among," so
    5·1 answer
  • _________ include management's commitment to the ethics program and the methods or system for ethics evaluation.
    10·1 answer
  • At the equilibrium price, the quantity of the good that buyers are willing and able to buya. is greater than the quantity that s
    12·1 answer
  • The manager of a savings and loan branch wants to estimate the average amount held in passbook savings accounts by the branch ba
    7·1 answer
  • Suppose a competitive market has a horizontal long-run supply curve and is in long-run equilibrium. If demand decreases, we can
    5·1 answer
  • The forces that make up the external marketing environment of a firm
    7·2 answers
  • If a sole proprietorship fails, the owner of the business will _______
    10·1 answer
  • When pay is made public, people evaluate how equitable their pay is in light of the pay other people are receiving. The problem
    5·1 answer
  • ¿De qué palabra deriva el verbo "betunear"?
    5·1 answer
  • Investor A has an initial wealth of $100 and a utility function of the form: U(w) = log(w) where w is her wealth at any time. In
    10·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!