Select the correct answer.

Simulation results help us to make decision recommendations for the controllable inputs that address not only the _______ output

faltersainse [42]

Answer:

The correct answer is letter "D": average; variability.

Explanation:

The Monte Carlo Simulation is a method of probability analysis done by running several variables through a model to determine different outcomes. By using Monte Carlo's simulation decision-makers can determine the range of possibilities and their probability of occurrence for any choice of action. In other words, it allows us to make decision recommendations for inputs that involve the outputs on <em>average </em>but also in <em>variability</em>.

4 0

3 years ago

How do a sole proprietorship and a corporation differ?

timofeeve [1]

Answer:

D. All of these are differences between the two type of business

Explanation:

The sole proprietorship is a business organzation owned, controlled and organized by one person.

Features of sole proprietorship

1. It is owned and controlled by one person

2. The owners is personally liable for all business debt.

3. Owners can establish a sole proprietorship instantly, easily, and inexpensively.

4. Sole proprietorships rarely survive the death of their owners.

5. Capital is limited since the business owner is the only provider of capital.

Features of Corporation

1. It protect its owners from personal liability for corporate debts and obligations.

2.A corporation has perpetual life, that is, when shareholders pass on or leave a corporation, they can transfer their shares to others who can continue a corporation's business

3. Corporation is owned by its shareholders and managed by its board of directors.

4. Corporations can raise capital more easily through the sale of securities.

6 0

4 years ago

Semtech Manufacturing purchased land and building for $5 million. In addition to the purchase price, Semtech made the following

cluponka [151]

Answer:

Semtech Manufacturing

1. Initial valuation of each asset:

Land = $3,526,460

Building = $1,511,340

2. The initial valuation of land = $5,449,800

Explanation:

a) Data and Calculations:

Cost of purchased land and building = $5 million

Additional expenditures:

Title insurance $ 24,000

Legal fees for drawing the contract 9,000

Prorated property taxes for the period after acquisition 44,000

State transfer fees 4,800

Allowed additional costs:

Title insurance $ 24,000

Legal fees for

drawing the contract 9,000

State transfer fees 4,800

Total additional costs $37,800

Total expenditure on the land and building = $5.037.8 million

Initial valuation of each asset:

Land = $3,526,460 ($5,037,800 * $4,200,000/$6,000,000)

Building = $1,511,340 ($5,037,800 * $1,800,000/$6,000,000)

Cost of land after the demolition of the building:

Initial purchase cost of land and building = $5 million

Additional cost = $37,800

Demolition costs = $330,000

Salvage of materials ($5,000)

Clearing and grading land = $87,000

Total cost of land = $5,449,800

4 0

3 years ago

You were hired as a consultant to giambono company, whose target capital structure is 40% debt, 15% preferred, and 45% common eq

alexgriva [62]

By definition, the Weighted Average Cost of Capital or WACC is the rate that an organization is expected to pay to all its security holders to finance its assets.

Mathematically this can be calculated by summation of the weighted average of the cost:

wacc = 0.4 * 0.06 + 0.15 * 0.075 + 0.45 * 0.13

wacc = 9.38%

8 0

3 years ago

Your best friend wants to borrow $2000 from you today for an emergency purchase they need to make that requires a cash payment.

kvasek [131]

Answer:

a. It is not a fair deal for me.

The question is how much is $1,000 today when received in 12 months' time from now. The present value of $1,000 at 5% effective interest rate is $952 ($1,000 * 0.952). The other repayment of $1,100 in 2 years' time from now is worth $997.70 today at the 5% effective interest rate. This implies that my friend is repaying me $1,949.70 in present value terms.

For friendship sake, I may lend her the money, but in economic analysis terms, the NPV value will yield a negative value of $50.30 ($2,000 - $1,949.70). My friend is not actually paying me back the amount I would lend to her. She is paying me less than I actually would lend to her.

b. Cash Flow Diagram:

Year 1 Year 2

F1 F2

$1,000 $1,100 (Inflows)

Fo⇵.................⇵.......................⇵...........................⇵n period

Year 0

$2,000 (outflows)

Explanation:

The cash flow diagram for this loan is the graphical representation of the timing of the cash flows with a clear marking of the repayments made by my best friend in two instalments and the $2,000 that I lent to her. This cash flow diagram presents the flow of cash as arrows on a timeline scaled to the magnitude of the cash flow, where outflows are down arrows and inflows are up arrows.

The Net present value (NPV) of this loan shows the difference between the present value of repayments by my best friend and the present value of $2,000 that I lent to her over a period of 2 years. To obtain this difference, the present values of cash inflows of $1,000 in a year's time and $1,100 in two years' time are determined using the discount factor table based on the given interest rate of 5%.

6 0

4 years ago