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3 years ago

Game theory:

Business

1 answer:

emmainna [20.7K]3 years ago

5 0

Answer:

B) is the analysis of how people (or firms) behave in strategic situations.

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Divine plc is a pure-honey producing plant. The firm wants to replace its aging processing machine. One option is to purchase a

AleksAgata [21]

Answer:

Project A

Years Cashflows Discount factor Present values

0 250,000 1 -250,000

1-10 45,100 6.144 277,094.40

Sum of all present value=NPV=27,094.40

IRR (by using trial and error method) = 12.4696%

Note: Discount factor for the year 1-10 is calculated by using annuity formula i.e [1-(1+10%)]/10% = 6.144

Project B

Years Cashflows Discount factor Present values

0 (350,000) 1 (350,000)

1 72,500 0.91 65,975

2 65,500 0.83 54,365

3 73,800 0.75 55,350

4 71,500 0.68 48,620

5 69,800 0.62 43,276

6 75,500 0.56 42,280

7 31,000 0.51 15,810

8 47,500 0.47 22,325

9 55,500 0.42 23,310

10 29,200 0.38 11,096

Sum of all present values=NPV=32,407

IRR(by using trial and error method=12.4186%

On the basis of NPV project B is better because it gives higher NPV than project A. Whereas, Project A is better than project B on the basis of IRR because project A has slightly higher IRR than project B.

b)The conflict between both the investment appraisal technique is likely due to different cash flow patterns of both the project. In such situation decision should be based on NPV because this is an absolute measure

5 0

3 years ago

Read 2 more answers

A business will want to borrow to undertake an investment project when the rate of return on that project is:

pychu [463]

Answer:

B) higher than the interest rate.

Explanation:

In the case when the business wants to borrow for a project so the rate of return would be greater than the rate of interest

And in the case when the rate of interest is lesser than the expected return so the investment would look attractive due to this there is a rise in the borrowing for that investment

Hence, the option b is correct

3 0

3 years ago

Snap_group166

tekilochka [14]

Interesting thing you’re doing lol

6 0

3 years ago

Read 2 more answers

Two people save money in a tax-deferred Individual Retirement Account that earns 8% annually. Person A invests $ 3,000 a year fr

riadik2000 [5.3K]

Answer:

Person B

Explanation:

If Person A begins investing $3,000 a year from age 20 to 29 he would have invested a total of $30,000. Each year he earns 8% of the amount in his account, so the first year he earns $3,000 x 8% = $240, the second year $6,000 x 8 = $ 480...and so on. Total interest earned are $99,600 from the age of 20 thru 65, because at age 30 no more money in invested but the $30,000 continues to earn 8% interest until the age of 65.

Person A earns a total of $30,000 + $99,600 = $129,600

Person B begins investing $3,000 a year at age 30 and invests a total of $108,00 from age 30 thru 65. Interest of 8% also needs to be considered from age 30 thru age 65. Total interest earned is $159,840.

Person B earns a total of $108,000 + $159,840 = $267,840

So Person B would earn more money at the age of 65.

PS: Spreadsheet attached.

Download xlsx

3 0

3 years ago

When an employee joins an online group that shared tips with one another about common problems related to their job tasks, the g

guajiro [1.7K]

Answer: Training and development

Explanation: In the given case, the employee is joining the online group with the intent of solving problems that is related to their task, hence, he is trying to self train himself through the help of others and is trying to develop his skills. The knowledge he gains from the group members will help him to better his performance in the job.

Thus, from the above we can conclude that the right option is B.

6 0

3 years ago