Answer:
3.5 years
Explanation:
The computation of the payback period is shown below:
In year 0 = -$44,000
In year 1 = $10,000
In year 2 = $10,000
In year 3 = $15,000
In year 4 = $18,000
In year 5 = $15,000
If we add the first 3 year cash inflows than it would cost $35,000
Now we deduct the $35,000 from the $44,000 so the amount left would be $9,000 as if we added the fourth year cash inflow so the total amount exceed to the initial investment. So, we deduct it
And, the next year cash inflow is $18,000
So, the payback period equal to
= 3 years + $9,000 ÷ $18,000
= 3 years + 0.5
= 3.5 years
Since the question has ask about only payback period so we ignored the discount rate i.e given in the question
Answer:
35 years
Explanation:
Data given in the question
Increase in dividend = 2%
Annual effective interest rate = 5%
So by considering the above information, the duration of the stock in years is
= 1 ÷ (Annual effective interest rate - increase in dividend)
= 1 ÷ (5% - 2%)
= 1 ÷ 3%
= 33.33
Now the duration of the stock in years is
= (1 + interest rate)^ 33.33
= (1 + 0.05)^33.33
= 1.05^33.33
= 34.999 years i.e 35 years
Answer:
d. If the WACC is 9%, Project B's NPV will be higher than Project A's.
Explanation:
The internal rate of return is the return in which the NPV is zero i.e cash inflows equal to the initial investment
While the WACC refers to the cost of capital by considering the capital structure i.e cost of equity, cost of preferred stock and cost of debt by taking their weightage
Now if the WACC is 9% so project B NPV would be higher as compared to project A as we can see that project B IRR is greater than the project A IRR
Therefore option d is correct
I believe the answer u are looking for is c......You can use the reference to support your claim. however be careful that you still use updated information as well
Answer:Five years into operations, the corporation has still failed to make profits and consequently files for bankruptcy. Who has been defra