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Mkey [24]
3 years ago
10

Charley has a typing service. he estimates that a new computer will result in increased cash inflow $1,600 in year 1, $2,000 in

year 2 and $3,000 in year 3. if charley's required rate of return is 12%, the most that charley would be willing to pay for the new computer would be:
Business
1 answer:
quester [9]3 years ago
4 0
<span>Ans : $ 5158. First, let us compare the Present Value of the investment with the PV of the future cash flows, discounted at 12%. The PV of 1,600, N 1, R 12%, is 1,429. The PV of 2,000, N 2, is 1,594, and the PV of 3,000, N 3, is 2,135. That's a total of 5,158.</span>
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3 0
3 years ago
Little LampLighter Inc has a book value of $10 million in debt; its bonds are trading at $900 and there are 11,000 outstanding.
kumpel [21]

Based on the amount of debt and equity that Little LampLighter has, the weighted average rate of return would be 12.3%.

<h3>What is the weighted average rate of return?</h3>

First find the total value of debt and equity:
= 10 + 25

= $35 million

The weighted average return is:

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= 12.3%

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7 0
2 years ago
Aircraft Products, a manufacturer of aircraft landing gear, makes 1,000 units each year of a special valve used in assembling on
Sedaia [141]

Answer:

b. Increase by $17,000

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Make options:

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= $70 + $60

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Buy options:

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= $77 + $60 × 60%

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4 0
3 years ago
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Answer:

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3 years ago
Describe the difference between cost of goods and operating expenses.
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Both operating expenses and cost of goods sold (COGS) are expenditures that companies incur with running their business. However, the expenses are segregated on the income statement. Operating expenses and COGS measure different ways in which resources are spent in the process of running a company.

8 0
3 years ago
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