Answer:
The annual difference between Option 1 (15 years) and Option 2 (20 years) is $7,211.19 in favor of the first one.
Explanation:
Giving the following information:
Option 1:
Number of years= 15
FV= 450,000
i= 0.0525
Option 2:
Number of years= 20
FV= 450,000
i= 0.0525
To calculate the annual cash flow, we will use the following formula on each option:
A= (FV*i)/{[(1+i)^n]-1}
A= annual cash flow
<u>Option 1:</u>
A= (450,000*0.0525) / [(1.0525^15) - 1]
A= $20,464.72
<u>Option 2:</u>
A= (450,000*0.0525) / [(1.0525^20) - 1]
A= $13,253.53
The annual difference between Option 1 (15 years) and Option 2 (20 years) is $7,211.19 in favor of the first one.
Answer:
A is the correct answer I think hope this helps
Answer:
1,875,000 Economic Value Added
Explanation:
Net Operating Profit After Taxes - Invested Capital x Weighted Average Cost of Capital = Economic Value added
This represent the return on the shareholders after their investment return is paid. It is the value generated from the investent resources.
3,700,000 x ( 1- 0.25 ) = 2,775,000 Operating Income after taxes
18,000,000 x 5% = (900,000) Required Return
1,875,000 Economic Value Added
If a government chooses to do this, the reduction in pollution will TAKE PLACE IN THE FIRMS WHERE ITS LEAST EXPENSIVE TO DO SO. If a government desire to establish a marketable permit program, it must first define the pollutants that will be allowed and their overall amounts that will be permissible. Companies that will mostly participate in the program will be those that do not produce much pollutants.
