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AlekseyPX
3 years ago
5

Ribelin Corporation is adding a new product line that will require an investment of $218,000. The product line is estimated to g

enerate cash inflows of $32,000 the first year, $18,000 the second year, and $21,000 each year thereafter for ten more years. What is the payback period? A. 856 years B. 10.42 years C. 10.00 years D. 11.17 years
Business
1 answer:
Vikentia [17]3 years ago
6 0

Answer:

C. Payback is 10 years

Explanation:

Payback is the number of years it will takes to recover the initial investment, which in this case translates to: how long will it take for Ribelin Corpration to recover the  $218,000 investment given the stated cash-flows.

Year Cash-flow     Balance

0        (218,000.00)        (218,000.00)

1        32,000.00            (186,000.00)

2        18,000.00            (168,000.00)

3        21,000.00             (147,000.00)

4         21,000.00             (126,000.00)

5        21,000.00              (105,000.00)

6        21,000.00              (84,000.00)

7        21,000.00               (63,000.00)

8       21,000.00                (42,000.00)

9        21,000.00               (21,000.00)

10        21,000.00                -    

11        21,000.00             21,000.00  

12        21,000.00            42,000.00  

By end of year 10, total inflows are exactly equal the initial investment, therefore it will take them 10 years

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The opportunity cost of holding money is ______.
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The opportunity cost of holding money is the interest forgone on an alternative asset.

<h3>What is asset?</h3>

An asset is any resource held or controlled by a business or economic entity in financial accounting. It is anything that has the potential to provide positive economic value. Assets represent ownership value that may be transformed into cash.

A business asset is something that has current or future economic worth to the company. In essence, assets for businesses encompass anything controlled and held by the company that is today valuable or has the potential to give monetary advantage in the future. Patents, machines, and investments are some examples.

Depreciation is the systematic distribution of an asset's depreciable amount throughout its useful life. The depreciable amount of an asset is equal to the asset's cost or another number substituted for cost, less its residual value.

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5 0
1 year ago
On January​ 1, Five Star Services has the following​ balances: Accounts Receivable $ 26 comma 000 ​(debit) Bad Debts Expense $ 0
PIT_PIT [208]

Answer:

$53,000

Explanation:

Data given in the question

Beginning Accounts Receivable = $26,000

Credit Sales = $130,000

Collections of credit sales  = $87,000

Write-offs = $16,000

So

As we know that

Ending Accounts Receivable = Beginning Accounts Receivable + Credit Sales - Collections of credit sales - Write-offs

= $26,000 + $130,000 - $87,000 - $16,000

= $53,000

5 0
3 years ago
A trader sold short a cotton futures contract @ 76.98 cents per pound. Contract size is 50,000 pounds. How much does the trader
shutvik [7]

Answer:

$6360

Explanation:

Contract value when the trader sold short = 76.98c * 50000 = $38,490

Contract value when he closed out his contract = 64.26c * 50000 = $32,130

Since the trader had sold short, he is speculating that the price of the futures contract will go down. The value of the contract did go down (in the traders favor) so the difference in value when he sold short and when he closed out his contract will be the profit gained in dollars. Please note that the initial futures prices are quoted in cents and would need to be converted to dollars by dividing by 100c i.e. 3,213,000c = $32,130

Therefore the profit made by the trader in dollars is $38,490 - $32.130 = $6360

3 0
3 years ago
The rate of return earned on a U.S. Treasury bill is frequently used as a proxy for the:A. risk premium.B. deflated rate of retu
IceJOKER [234]

Answer:

The correct answer is letter "C": risk-free rate.

Explanation:

The United States government issues a variety of debt obligations to finance its operations. Those with the shortest maturity are called Treasury Bills or T-Bills. One of the unique features of T-Bills is that the government does not make regular interest payments to the holder. Instead, the securities are sold at a price below its face value resulting in a profit at the maturity date.  

T-Bills are seen as low-risk investments compared to other securities being <em>the closest to risk-free return</em> in the market.

5 0
3 years ago
Which motivation focuses on the fact that
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The correct answer is C) theory Z.

The motivation that focuses on the fact that management and administration of contemporary organizations must consider the needs of the employee and, more importantly, how those needs can be met within the context of both the organization society as a whole is "theory Z."

When we are referring to the theory "Z," we are referring to the theory developed by economist William Ouchi. It was in the 1980s when Ouchi proposed this management style theory in the book "Theory Z: How American Business Can Meet the Japanese Challenge." The theory refers to the benefits of stable employment that generates productivity, and satisfaction in the workplace.

The other options of the question were A) theory X. B) theory Y. D) expectancy theory.

3 0
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