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Y_Kistochka [10]
4 years ago
15

An electronics company makes devices for two different federal agencies. The company just completed the two contracts. The Homel

and Security contract was for 2,200 devices and took 27 workers two weeks (40 hours per week) to complete. The DEA contract was for 5,454 devices that were produced by 35 workers in three weeks. Calculate the productivity for the Homeland Security contract in units produced per labor hour. (Round your answers to 2 decimal places.)
Business
1 answer:
prohojiy [21]4 years ago
8 0

Answer: 1.02 unit per hour

Explanation: total unit of devices for homeland security is 2200 units

Total labourer = 27 people

Total hour for two weeks = 40 × 2 = 80

Productivity per hour = devices number/total hour 2200/ 80 = 27.5

productivity for the Homeland Security contract in units produced per labor hour = 27.5/27 = 1.0185 = 1.02

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Comment for statement B - There should be a higher discount rate on risky cash flows than the rate used to discount less risky cash flows.

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“I like the IRR rule. I can use it to rank projects without having to specify a discount rate”

The firm must still compare the IRR with the opportunity cost of capital when using the IRR rule. Therefore, even with the IRR method, the   appropriate discount rate must still be specified.

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There should be a higher discount rate on risky cash flows than the rate used to discount less risky cash flows.

Making use of the payback rule is equivalent to using the NPV rule with a zero discount rate for cash flows before the payback period and an infinite discount rate for cash flows thereafter.

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