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3 years ago

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A company is considering an iron ore extraction project that requires an initial investment of $504,000 and will yield annual ca

sh inflows of $150,000 for four years. The company's discount rate is 9%. What is the NPV of the project

1 answer:

Lubov Fominskaja [6]3 years ago

4 0

This is it with working.

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An ad for Maybelline age-minimizing makeup in Ladies' Home Journal magazine featured actress Melina Kanakaredes and offered read

mina [271]

Answer:

The correct answer is C

Explanation:

A brand named Maybelline released an ad for the product of age minimizing makeup and offering the readers the $1 off coupon, so in terms of the communication, the source is the term which is described as the person or the reader who use the service or the product.

Therefore, the source of the ad is the readers who redeem the coupon featuring off $1 on the product.

3 0

3 years ago

Consider Pacific Energy Company and Atlantic Energy, Inc., both of which reported earnings of $961,000. Without new projects, bo

lys-0071 [83]

Answer:

A. 7.14

B. 7.96

C.8.71

Explanation:

A. Calculation for the the current PE ratio for each company

First step is to find the market value of the stock using this formula

Market value of stock=Earnings/Return percentage

Let plug in the formula

Market value of stock =$961,000/0.14

Market value of stock =6,864,285

Last step is to find the current PE ratio for each company using this formula

Current PE ratio=Market value of stock/Earnings

Let plug in the formula

Current PE ratio=6,864,285/$961,000

Current PE ratio=7.14

Therefore the Current PE ratio is 7.14

B. Calculation for the new PE ratio of the company

First step is to find the market value of the stock using this formula

Market value of stock =(Earnings+Additional earnings) /Return percentage

Let plug in the formula

Market value of stock =($961,000+$111,000) /0.14

Market value of stock=$1,072,000/0.14

Market value of stock=7,657,142

Last step is to find the new PE ratio of the company using this formula

New PE ratio=Market value of stock/Earnings

Let plug in the formula

New PE ratio=7,657,142/$961,000

New PE ratio=7.96

Therefore the New PE ratio is 7.96

C.Calculation for the new PE ratio of the firm

First step is to find the market value of the stock using this formula

Market value of stock =(Earnings+Increase in earnings) /Return percentage

Let plug in the formula

Market value of stock =($961,000+$211,000) /0.14

Market value of stock=$1,172,000/0.14

Market value of stock=8,371,428

Last step is to find the new PE ratio of the company using this formula

New PE ratio=Market value of stock/Earnings

Let plug in the formula

New PE ratio=8,371,428/$961,000

New PE ratio=8.71

Therefore the New PE ratio is 8.71

7 0

3 years ago

Gilbert is considering purchasing the Side Steamer 3000, a higher-end steamer, which costs $12,000, and has an estimated useful

mixer [17]

Answer:

Explanation:

initial outlay $12,000 + ($2,900 - $700) = $14,200

depreciable value = $10,800

depreciation per year:

$2,160
$3,456
$2,073.60
$1,244.16
$1,244.16
$622.08

incremental revenues = $2,000 + $1,400 = $3,400

CF year 0 = -$14,200

CF year 1 = [($3,400 - $2,160) x 0.6] + $2,160 = $2,904

CF year 2 = [($3,400 - $3,456) x 0.6] + $3,456 = $3,422.40

CF year 3 = [($3,400 - $2,073.60) x 0.6] + $2,073.60 = $2,869.44

CF year 4 = [($3,400 - $1,244.16) x 0.6] + $1,244.16 = $2,537.66

CF year 5 = [($3,400 - $1,244.16) x 0.6] + $1,244.16 = $2,537.66

CF year 6 = [($3,400 - $622.08) x 0.6] + $622.08 + $1,200 + $2,200 = $5,688.83

WACC = 12%

a) the steamer should not be replaced, since the NPV is negative.

b) Using a financial calculator, NPV = -$14,200 + $13,298.29 = -$901.71

8 0

3 years ago

If a tax is imposed on a good where both supply and demand are somewhat elastic, but demand is more elastic than supply, the bur

antiseptic1488 [7]

Answer:

The answer is D - mostly by producers but partially by consumers.

Explanation:

Tax incidence depends on the relative price elasticity of demand and supply. When supply is more elastic than demand, buyers bear most of the tax burden but when demand is more elastic than supply, producers bear most of the cost of tax and consumers bear less.

7 0

3 years ago

Fiscal policy proponents see fiscal as a superior strategy for market corrections.

Arada [10]

Answer: True

Explanation:

Fiscal policy refers to the government suing taxation and spending policies to influence the economy of a country. If the government wants to improve production, they reduce taxes and increase spending and if they want to reduce production, they increase taxes and reduce spending.

Fiscal policy proponents believe that the government is right to use fiscal policy to correct the market because its effect is more direct. John Maynard Keynes was one of the most famous proponent for Fiscal policy.

6 0

4 years ago