1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Art [367]
3 years ago
6

Consider the following two projects. Both have costs of $5,000 in Year 1. Project 1 provides benefits of $2,000 in each of the f

irst four years only. The second provides benefits of $2,000 for each of Years 6 to 10 only. Compute the net bene- fits using a discount rate of 6 percent. Repeat using a discount rate of 12 percent. What can you conclude from this exercise?
Business
1 answer:
frutty [35]3 years ago
6 0

Answer:

1. Compute the net benefits using a discount rate of 6 percent.

Net befit of Project 1 = $629.04

Net befit of Project 2 = $1,578.47

2. Repeat using a discount rate of 12 percent.

Net befit of Project 1 = $339.38

Net befit of Project 2 = - $373.39

3. What can you conclude from this exercise?

(a) Project 2 should be chosen when the discount rate is 6 percent.

(b) Project 1 should be chosen when the discount rate is 12 percent.

Explanation:

Note: See the attached excel file for the calculations of net benefits for Project 1 and Project 2.

3. What can you conclude from this exercise?

(a) When a discount rate of 6 percent is used, both Project 1 and Project 2 have positive net benefit. But the net benefit of Project 2 of $1,578.47 is higher than the net benefit of Project 1 of $629.04.

Therefore, project 2 should be chosen when the discount rate is 6 percent.

(a) When a discount rate of 12 percent is used, only Project 1 has a net benefit of $339.38, but the net benefit of Project 2 is negative at minus $373.39.

Therefore, project 1 should be chosen when the discount rate is 12 percent.

Download xlsx
You might be interested in
When driving in the city, _____ may help you avoid traffic, but they may not be as safe or they may increase your travel time be
Darya [45]
The correct answer is side streets.
If you are in a hurry, it may be better to take a different route and drive through side streets in order to avoid the traffic which is usually present in the more 'popular streets.' However, side streets have a lot of traffic control lights, which may slow down your ride even more.
7 0
3 years ago
Read 2 more answers
Mark wants to be a web designer. He recently found out that a local company is
ExtremeBDS [4]

Answer:

No his parents aren't exactly right, a college is far more expensive, not only money wise, but also time wise. These programs/bootcamps can get you started in web design, and make sure you pass with a certificate and fully understand the topic, and they only take around a 2 - 5 months.

6 0
3 years ago
George is looking at the colors on a paint swatch card to select the right shade of red for his wall. he is able to differentiat
bulgar [2K]

Based on his perception of the differences in the shades, this can be attributed to the wavelengths of light reflecting from the shades. Wavelength in physics is being defined as measuring the direction in regards of the propagation of a wave in which are in between a two successive points in the wave that are being characterized by its same phase.

4 0
3 years ago
When the effective-interest method of amortization is used for a bond premium, the amount of interest expense for an interest pe
gayaneshka [121]

The amount of interest expense for an interesting period is calculated by multiplying the carrying value of the bonds at the beginning of the period by the effective interest rate.

Amortization is an accounting approach used to periodically decrease the ebook value of a loan or an intangible asset over a fixed time frame. Concerning a mortgage, amortization focuses on spreading out mortgage bills through the years. When applied to an asset, amortization is similar to depreciation.

Amortized price is an accounting approach in which all economic properties need to be suggested on a stability sheet at their amortized fee that is identical to their acquisition general minus their essential payments and any reductions or charges minus any impairment losses and change variations.

Input the corresponding values in cells B1 thru B3. In cellular B4, input the components "=-PMT(B2/1200, B3*12, B1)" to have Excel routinely calculate the monthly charge. As an example, in case you had a $25,000 mortgage at 6.5 percent annual hobby for 10 years, the month-to-month fee could be $283.87.

Learn more about the method of amortization here brainly.com/question/10561878

#SPJ4

5 0
2 years ago
A performance obligation is:
ANEK [815]

Answer:

.

Explanation:.

5 0
3 years ago
Other questions:
  • Joey's father is in a car accident and cannot work. what type of insurance replaces his father's earnings?
    7·2 answers
  • Which of the following statements is false? A) Battery acid cannot be neutralized B) Batteries should never be stored on metal t
    8·1 answer
  • Kyei weighed half the total weight of his two brothers. his two brothers be weighed 44 1/2kg and 32 1/2kg.what was kyei's weight
    7·1 answer
  • The numerator of the return on total assets is: a.net income. b.net income minus preferred dividends. c.net income plus tax expe
    12·1 answer
  • A monopolist, unlike a competitive firm, has some market power. It can raise its price, within limits, without the quantity dema
    13·1 answer
  • Carrie's Car Care receives more than 25% of its total sales revenues from operations outside of the United States. Carrie's woul
    11·1 answer
  • Sunland Construction enters into a contract with a customer to build a warehouse for $890000 on March 30, 2021 with a performanc
    8·1 answer
  • If Acme Corporation's current share price is $40 and it has issued 1 million shares of stock, then its market cap is
    7·1 answer
  • PLEASE HURRY!!! I WILL GIVE BRAINLIEST!!!
    14·1 answer
  • What is the moving force of air
    7·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!