Answer:
NPV= $4,079.63
Explanation:
Giving the following information:
Initial cost= -$20,000
Rate of return= 10%
<u>To calculate the net present value, we need to use the following formula:</u>
NPV= -Io + ∑[Cf/(1+i)^n]
<u>First, we need to discount the cash flows:</u>
PV= Cfn / (1+i)^n
Cf1= 5,000/1.1= 4,545.45
Cf2= 10,000/1.1^2= 8,264.46
Cf3= 15,000/1.1^3= 11,269.72
Total PV= $24,079.63
Now, the NPV:
NPV= -20,000 + 24,079.63
NPV= $4,079.63
Answer:
A. Savings ratio
Explanation:
The savings ratio is expressed as a percentage and is computed by dividing average household savings by average household disposable income.
Answer:
Fixed costs are the costs associated with your business's products or services that must be paid regardless of the volume you sell. ... Insurance - the liability insurance you hold on your business. Rent - the rent you pay on your office, factory, and storage space. Utilities - electricity, water, and other utilities.
Explanation:
Answer:
$331,500
Explanation:
The computation of the ending balance of the pension benefit obligation is shown below:
= Opening balance of PBO + service cost + interest cost - pension benefits
= $265,000 + $80,000 + $26,500 - $40,000
= $331,500
The computation of the interest cost is shown below:
= Opening balance of PBO × discount rate
= $265,000 × 10%
= $26,500
The increased value of the plan assets would be ignored.
Priya Rahavy, M.D., is a general practitioner whose offices are located in the Lake Forest Professional Building. In the past, Dr. Rahavy has operated her practice with a nurse, a receptionist/secretary, and a part-time bookkeeper. Dr. Rahavy, like many small-town physicians, has billed her patients and their insurance companies from her own office. The part-time bookkeeper, who works 15 hours per week. is employed exclusively for this purpose.
North Avenue Physician's Service Center has offered to take over all of Dr. Rahavy's billings and collections for an annual fee of $24,000. If Dr. Rahavy accepts this offer, she will no longer need the bookkeeper. The bookkeeper's wages and fringe benefits amount to $20 per hour, and the bookkeeper works 50 weeks per year. With all the billings and collections done elsewhere, Dr. Rahavy will have three additional hours available per week to see patients. She sees an average Of four patients per hour at an average fee of $30 per visit. Dr. Rahavy's practice is expanding, and new patients often have to wait several weeks for an appointment. She has resisted expanding her office hours or working more than 50 weeks per year. Finally, if Dr. Rahavy signs on with the center, she will no longer need to rent a records storage facility for $200 per month.
a. Conduct a relevant cost analysis to determine if it is profitable to outsource the bookkeeping.
