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MrRa [10]
4 years ago
14

Here are the cash flows for two mutually exclusive projects: Project C0 C1 C2 C3 A −$ 34,400 +$ 13,700 +$ 13,700 +$ 13,700 B − 3

4,400 0 0 + 43,200 a. At what interest rates would you prefer project A to B?
Business
1 answer:
Natali [406]4 years ago
5 0

Answer:

7.89%

Explanation:

We can find the IRR of Project A and Project B is 9% and 8% respectively

(please see the calculation in excel in attachment)

So if the interest rate below 8% then Project A is more profitable than project B.

You can find NPV of each project follow the decrease in interest rate in the excel attached.

Download xlsx
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The financial staff of Cairn Communications has identified the following information for the first year of the roll-out of its n
Dmitrij [34]

Answer:

$9,600,000

Explanation:

The computation of the projected operating cash flow is given below:

= EBIT × (1 - tax rate) + depreciation expense

where

EBIT should be

= $20,000,000 - $8,000,000 - $6,000,000

= $6,000,000

Now the operating cash flow should be

= $6,000,000 × (1 - 0.40) + $6,000,000

= $3,600,000 + $6,000,000

= $9,600,000

4 0
3 years ago
Ben Collins plans to buy a house for $180,000. If the real estate in his area is expected to increase in value by 1 percent each
rjkz [21]

Answer:

The approximate value of the house is 192984

Explanation:

I don't know what you mean by "<em>Use Exhibit 1-A</em>" but you can calculate this as follows

180000 * (1+1%)^7

The general formula of cumulative interest is

A * (1+i)^n

A = Amount

i = interest, in this case 1%

n = number of periods, in this case, 7

6 0
3 years ago
Mary is a shareholder in CarrollCo, a calendar year S corporation. At the beginning of the year, her stock basis is $10,000, her
Troyanec [42]

Answer:

AAA = (8000)

STOCK BALANCE = 0

AEP = 2000

Explanation:

-----------------AAA-------- stock basis---------AEP

Beg. Bal--- 2000 - - - - 10,000 - - - - - - 6,000

Distribution (2000) - - - - (2000) - - - - - (4000)

Balance - - - 0 - - - - - - - 8000 - - - - - - 2000

LTCG - - - 2000 - - - - - 2000 - - - - - - - - 0

Balance - -2000 - - - - - 10,000 - - - - - - 2,000

Loss - - - (10000) - - - - (10000) - - - - - - - 0

Ending - - (8000) - - - - - 0 - - - - - - - - - 2000

ENDING BALANCE :

AAA = (8000)

STOCK BASIS = 0

AEP = 2000

Beg. bal = beginning balance

LTCG = Long term capital gain

3 0
4 years ago
why do consumers make a choice by looking at both the marginal utility (mu) and the price for a product (mu/p) rather than just
vladimir2022 [97]

Consumers always try to equate marginal utility of a good to its price which is a marginal cost of consumption.

<h3>What is marginal utility and why consumers make a choice by looking at both mu and price?</h3>
  1. So economically a utility is a kind of benefit that a consumer gets by buying a product  of choice.
  2. Now marginal utility is the benefit one gets by buying an additional unit of consumption except the first product bought.
  3. Here the question is asked about the consumer taking notice of both marginal utility and price while buying goods.
  4. Hence consumers watch for the marginal utility and price of the good both to equate the marginal utility to its price which is a marginal cost of consumption.

To know more about marginal utility visit:

brainly.com/question/15561406

#SPJ4

3 0
2 years ago
The mutual interdependence that characterizes oligopoly arises because_______________.a. the products of various firms are diffe
DerKrebs [107]

Answer:

The correct answer is option c.

Explanation:

An oligopoly is a market structure where there are a few sellers. These sellers may be selling homogenous or differentiated products.  

There is high competition in the market. The sellers are interdependent on each other.  

This interdependence happens because of a few sellers. The decisions of a seller affect its rivals. So before making a decision regarding price and output, a firm must consider the reaction of its rivals.  

So all the firms are mutually interdependent.

4 0
3 years ago
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