Answer:
A
Decision: Project A should be selected.
B
NPV =$40,909.09
Explanation
A
<em>Since the two projects would achieve the same objectives, the project with the lowest initial cost should be selected.</em>
Kindly note that the $2 million already spend on project A is not a relevant cash flow because it is sunk cost. Hence, the initial cos outlay of project A will be $2 million which will be spent should the project be undertaken.
Project B on the other hand would cost $1.5 million in initial cost which is $500,000 cheaper than project A.
Decision: Project A should be selected.
B
<em>The NPV is the difference between the PV of cash inflows and the PV of cash outflows. A positive NPV implies a good investment decision and a negative figure implies the opposite. </em>
NPV of an investment:
NPV = PV of Cash inflows - PV of cash outflow
Initial cost = 50,000
The NPV of the savings
NPV = 100,000× 1.1^(-1) - 50,000= 40,909.09
NPV =$40,909.09
Answer:
Culver Corporation
Balance sheet as on December 31, 2017
Equity
Common Stock $758,700
Paid-in Capital in Excess of Par-Common Stock $208,400
Non-controlling Interest $36,200
Retained Earnings $122,300
Accumulated Other Comprehensive Loss <u>$153,200</u>
Total Equity <u>$1,278,800</u>
Explanation:
Equity accounts includes all the paid-in capital account common at par and excess of par and retained earning, non controlling interest and accumulated other comprehensive account.
The following account are non equity accounts, so these are not added to equity section of balance sheet.
Bonds Payable $108,400
Goodwill $60,900
Answer:
The answer is -$5
Explanation:
A put option gives its owner/holder the right but not the obligation to sell. The holder of a put option is expecting the price of the underlying asset(stock) to drop.
The formula is:
Profit = max(0, X - St) - P
where X is the strike or exercise price
St is the market value or the spot price of the underlying asset
P is the premium
max(0, $110 - $100) - $15
10 - $15
-$5
Answer:
Medium of exchange
unit of account
store of value)
Explanation:
Functions of money
1. Medium of exchange : money can be used to exchange for goods and services. For example, money serves as a medium of exchange when you buy a car with a check
2. Unit of account : money can be used to value goods and services. SEAN was able to determine which is more valuable between super and duper using the price.
3. Store of value : money can retain its value over the long term, this it can be used as a store of value.