Answer:
Real rate of returns are lower than nominal rates of return, therefore, using a real discount rate would overestimate a project's net present value. This could result in unprofitable projects being accepted because the NPV was erroneously calculated. If you want to use a real discount rate, you must first convert cash flows to real dollars.
For example, nominal discount rate is 10%, inflation rate is 5%, real discount rate is 5%.
Initial outlay $100
NCF year 1 = $40
NCF year 2 = $40
NCF year 3 = $40
Using the real discount rate, the NPV = $8.93
Using the nominal discount rate, the NPV = -$0.53
Answer:
There could be many reasons to this, there could be many possible reasons, managers need to carefully analyse what might be the cause.
Job advertisement might not be posted in the appropriate newspapers, websites and magazines. Here IBM human resource manager needs to find the most appropriate sources to put the ads.
IBM might not getting the right candidates because the current candidates might positing some negative reviews about its working conditions, here managers need to address this issue properly but figuring out the actual root cause for this problem.
IBM might not presenting the idea of diverse workforce in their recruiting advertisement, here they need to show diverse workforce in their hiring ads.
Answer:
A
Explanation:
A country gains from trade if it specialises in the production of the good for which it has a comparative advantage
A country has comparative advantage in production if it produces at a lower opportunity cost when compared to other countries. this means that the country can produce the good by forgoing fewer alternative products
For example, country A produces 10kg of beans and 5kg of rice. Country B produces 5kg of beans and 10kg of rice.
for country A,
opportunity cost of producing beans = 5/10 = 0.5
opportunity cost of producing rice = 10/5 = 2
for country B,
opportunity cost of producing rice = 5/10 = 0.5
opportunity cost of producing beans = 10/5 = 2
Country A has a comparative advantage in the production of beans and country B has a comparative advantage in the production of rice
Answer:
$14,000
Explanation:
The computation the retained earning balance for dividend distribution is shown below:
= Retained earnings - retained earnings was restricted for plant expansion - restricted for bond repayments
= $18,000 - $3,000 - $1,000
= $14,000
Simply we deduct those items which affect the retained earnings balance.
All other information which is given is not relevant. Hence, ignored it
Answer:
The gain on the transaction is $5,500
Explanation:
Gain on Transaction = Fair Value of Truck - Cash Paid - Note Payable - carrying value of car exchanged
= $25,000 - $4,000 - $10,000 - ( $8,000 - $2,500)
= $25,000 - $4,000 - $10,000 - $5,500
= $5,500 Gain
