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mojhsa [17]
2 years ago
13

Two firms examined the same capital budgeting project which had an IRR of 16%. One firm accepted the project but the other rejec

ted it. One of the firms must have made an incorrect decision.
Discuss the validity of this statement.
Business
1 answer:
Mrrafil [7]2 years ago
7 0

Answer:

the statement is not valid. A company can reject the 16% IRR project if it is less than its discount rate. the discount rate is the minimum acceptable rate at which a project can be accepted. so, if 16% is less than than the discount rate, the project would be rejected.

on the other hand, if the discount rate is less than 16%, the project should be accepted because the return of the project would be greater than the discount rate.

Explanation:

Internal rate of return is the discount rate that equates the after tax cash flows from an investment to the amount invested.

You might be interested in
Lakeside Inc. produces a product that currently sells for $64.80 per unit. Current production costs per unit include direct mate
iren [92.7K]

Answer:

a. Incremental costs = (Direct materials + Direct labor) * 20%

Incremental costs = ($26 + $28) * 20%

Incremental costs = $54 * 20%

Incremental costs = $10.8

Incremental selling price = $72 - $64.8 = $7.2

Incremental profit (loss) = Incremental selling price - Incremental costs = $7.2 - $10.8 = $(3.6)

b. No. As there is Incremental loss, it should not be processed further

5 0
2 years ago
How many years would it take for money to increase to 3 times the initial amount at an interest rate of 18% per year?
arlik [135]

Answer:

7 years (to the nearest year)

Explanation:

Given that;

A = amount

P= principal

t = time

r = rate

A =3P(given in the question)

Formula for compound interest;

A = P(1 + r)^t

Substituting values;

3P = P(1 + 18/100)^t

3P/P= (1.18)^t

3 = (1.18)^t

log 3 = t log 1.18

t = log 3/log 1.18

t = 0.4771/0.0719

t = 6.6 years

t = 7 years (to the nearest year)

3 0
2 years ago
You are the executive director of a nonprofit that runs an animal shelter and animal services, such as low-cost spay/neuter prog
EleoNora [17]

Answer:

Hold meeting with employees, volunteers and representatives of other local shelters and listen carefully as they brainstorm ideas.

Explanation:

A leader can be defined as an individual who motivates and inspires a group of people towards achieving a common goal. A good leader must possess the following characteristics:

1) A leader must be a good communicator, he/she must be able to deliver information to the group in an orderly manner.

2) A good leader must be able to inspires others.

3) A leader must lead with honesty.

4) A leader must be able to make good decisions.

5) A good leader should be able to account for his/her various activities.

8 0
3 years ago
"Ethan knows that when he graduates from college and begins looking for a job, he will need to make his resume stand out from al
kakasveta [241]

Answer:

Communicating value

Explanation:

Communicating value involves showing others what makes one's product or skills different and better than others that are available.

What value means to stakeholders in a situation needs to be defined.

Focus is then given to how the skill or product can meet these unique needs.

Also one needs to understand the most effective platform to use in communicating value.

In this instance Ethan wants to make his resume stand out from all the other resumes that the company receives in order to be selected for an interview

He is communicating the value he can add to the company.

5 0
2 years ago
In two to three sentences, explain the differences between an operating system and an operating environment.
Leno4ka [110]

Answer:

see below

Explanation:

An operating system or simply OS is a program that manages a computer's hardware and software resources.  Operating system tasks include controlling and allocating memory, controlling input and output devices, facilitating networking, and prioritizing system requests.  Macintosh, Windows, or Linux are the most common operating systems that computers run on.

The operating environment is the environment in which a user runs application software. It consists of a user interface and an application programming interface. An operating environment is a middleware that rests between the Operating system and applications.

8 0
3 years ago
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