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
Fudgin [204]
3 years ago
10

Mason Company has a choice of two investment alternatives. The present value of cash inflows and outflows for the first alternat

ive is $160,000 and $114,000, respectively. The present value of cash inflows and outflows for the second alternative is $335,000 and $280,000, respectively.
Required

Calculate the net present value of each investment opportunity. (Negative amounts should be indicated by a minus sign.)

Calculate the present value index for each investment opportunity. (Round "PVI" to 2 decimal places.)

Indicate which investment will produce the higher rate of return.
Business
1 answer:
STatiana [176]3 years ago
7 0

Answer:

The net present values of the two investments are $46000 and $55000 respectively .

However, the present value index for the first investment is 1.40 while the second investment has 1.2 as net present value index.

Judging from net present value,the the second investment is preferable,but since net present value is an absolute value,it does not  relate the net present value to the underlying outlay,the first investment is preferred based on present value of index 1.4

Explanation:

The net present value for both alternatives is shown below:

                                                         $                               $

Present value of cash inflows         160000                335000

Present value of cash inflows         (114000)               (280000)

Net present value                             46000                  55000

Present value index=present value of inflows/present value of outflows

First investment       =160000/114000=1.40

Second investment =335000/280000=1.2

You might be interested in
Suppose Megan gets a sales bonus at her place of work that gives her an extra $400 of disposable income. She chooses to spend $3
kicyunya [14]

Answer:

0.75, 0.25

Explanation:

With an increase in disposable income marginal propensity to consume increase. Similarly, with an increase in disposable income marginal propensity to save increases. Marginal propensity to save is the amount of money saved or kept after a fraction increase in overall disposable income.

MPC = 300/400=0.75

MPS = 100/400=0.25

Marginal propensity to consume is 0.75

Marginal propensity to save is 0.25

5 0
2 years ago
How do I get more questions?
Tomtit [17]

Answer:

You need to get more points so you can ask questions.

Explanation:

You can do this by answering other people's questions

8 0
3 years ago
Read 2 more answers
How many times does 6 go into 138
lana [24]
IT GOES IN 23 TIMES...
3 0
3 years ago
max fischer is a beekeeper. his annual group insurance costs 11,700. his employer pays 60% of the cost. how much does max pay se
jasenka [17]

To solve for the semimonthly payments on Max's insurance cost:

Annual insurance rate: $11,700

Employer pays 60%

What is Max's amount to pay?

(11,700)(.60) = $7,020

Max's employer pays $7,020

Max pays $4,680 (11,700-7,020)

If Max pay's $4,680 a year and we want to know but he pays semimonthly, or twice a month then we need to divide his annual payment by 24 since there are 12 months and he pays twice a month.

($4,680/24)= $195

Max pays $195 semimonthly for his insurance.

6 0
3 years ago
The foreign corrupt practices act of 1977 makes it illegal for u.s. firms to select one:
diamong [38]
The answer is <span>a. attempt to make large payments or bribes to influence policy decisions of foreign governments.</span>
8 0
3 years ago
Other questions:
  • Given the industry structure in the automobile business, entering the auto manufacturing industry doesn't seem advisable. Yet Te
    12·1 answer
  • Justin just started his first post-college job at bigchem, incorporated. part of his benefit package is a defined benefit plan t
    8·2 answers
  • Mark and julie are going to sell brownies and cookies for their third annual fundraiser bake sale. In one day, mark can make 40
    10·1 answer
  • According to the Partnership for 21st Century Learning, what are three critical skill sets that modern employers look for in emp
    13·2 answers
  • In a department, 28,000 units are completed and transferred out and 14,400 remain in ending WIP at 85% complete. If an equivalen
    8·1 answer
  • Perfectly competitive industry X has constant costs and its product is an inferior good. The industry is currently in long-run e
    11·1 answer
  • Stephen is a hairdresser who gives haircuts to two customers in the same day. The haircut he gives to the first customer is not
    15·1 answer
  • Three ways that savings can be transferred through the financial markets include all of the following EXCEPT Group of answer cho
    10·1 answer
  • How can World Literature help a businessman or a top executive in a multinational corporation? Will an interest in books be an a
    5·1 answer
  • HURRY! 20 points! Which of the following is the most important requirement for career advancement in art design?
    13·2 answers
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!