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butalik [34]
3 years ago
10

A company is considering two capital investments. Each requires an initial investment of $15,000 and has a 4 year useful life. I

nvestment A has expected cash inflows of $5,000 each year for the 4 years for total cash inflows of $20,000. Investment B has the following expected cash flows: Year 1: $8,000; Year 2: $6,000; Year 3: $4,000; Year 4: $2,000; Total cash flows: $20,000. Calculate the payback period for Investment A.
Business
1 answer:
yaroslaw [1]3 years ago
7 0

Answer:

3 years

Explanation:

The computation of the payback period is shown below:

Payback period = Initial investment ÷ Net cash flow

where,  

Initial investment is $15,000

And, the net cash flow would be

= Year 1 + year 2 + year 3 + year 4

= $5,000 + $5,000 + $5,000 + $5,000

= $20,000

As we see that the net cash flow is recovered in three years that means net cash flows and the initial investment are equal

So,

Payback period would be

= $15,000 ÷ $15,000

= 3 years

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Multiple Choice Best Buy decided to bring in Hubert Joly as CEO to replace Brian Dunn. Amazon has many strategically located dis
Fynjy0 [20]

Complete question reads;

Which of the following is not a reason Best Buy has had a hard time competing with Amazon? Multiple Choice

a. Best Buy decided to bring in Hubert Joly as CEO to replace Brian Dunn.

b. Amazon has many strategically located distribution centers across the United States.

c. Best Buy had significant expenses that did not help improve sales.

d. Amazon has a deep supply of products to draw from.

e. Best Buy has faced some key leadership challenges.

Answer:

a

Explanation:

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6 0
3 years ago
Income smoothing refers to: a. the ability of management to use accruals to reduce the volatility of reported earnings over time
svetoff [14.1K]

Answer: The correct answer is "a. the ability of management to use accruals to reduce the volatility of reported earnings over time.".

Explanation: Income smoothing refers to <u>the ability of management to use accruals to reduce the volatility of reported earnings over time.</u>

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6 0
3 years ago
Brown Street Grocers has a cost of equity of 11.8 percent, a pre-tax cost of debt of 6.9 percent, and a tax rate of 35 percent.
motikmotik

Answer:

The correct answer to the following question is option E) 9.06% .

Explanation:

Here the cost of equity given is  - 11.8%

Pre tax cost of debt- 6.9%

Tax rate- 35%

So the after tax cost of debt - 6.9% x 65%

= 4.485%

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Weight of equity - 1 / ( 1 + .06 )

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= 4.485 x .375 + 11.8 x .625

= 1.681875 + 7.735

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ASHA 777 [7]

Answer:

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