Using the internal rate of return method, a conventional investment project should be accepted if the internal rate of return is equal to or greater than the discount rate.
The internal rate of return is a method of calculating the rate of return on an investment. The term internal refers to the fact that the calculation excludes external factors such as base rates, inflation, cost of capital, or financial risk. This method can be applied after the fact or before.
Internal rate of return (IRR) is a metric used in financial analysis to estimate the potential return on investment. IRR is the discount rate that drives the net present value (NPV) of all cash flows to zero in a discounted cash flow analysis. The calculation of IRR is based on the same formula as NPV.
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Answer:
(A) 4.8 months
Explanation:
After the expiration of a lease, a maximum of one third allowance is usually given.
Therefore, The expected vacancy at the end of this lease can be calculated as follows:
The expected vacancy = 60% × 12 × (2 ÷ 3) = 4.8 months
Therefore, the expected vacancy at the end of the lease is 4.8 months.
Answer:
d. Buy in-the-money calls on oranges
Explanation:
A call option is an option to buy a product or asset at a stated price at a later date. The risk of call option is capped at premium for buying the option. The best financial engineering strategy for Coolmist is to buy in the money calls on oranges. This gives Coolmist a right to buy oranges at predetermined price at a later date. This minimizes the risk of upward price strike of oranges.
Answer:
Break-even point (dollars)= $772,500
Explanation:
Giving the following information:
The contribution margin ratio of Donath Corporation's only product is 64%. The company's monthly fixed expense is $454,200 and the company's monthly target profit is $40,200.
To calculate the sales in dollars to obtain the desired profit, we need to use the following formula:
Break-even point (dollars)= (fixed costs + desired profit)/ contribution margin ratio
Break-even point (dollars)= (454,200 + 40,200) / 0.64
Break-even point (dollars)= $772,500
Answer:
<u>can</u> ; <u>can</u>
Explanation:
With increasing or decreasing government expenditure there are various other things also associated. Government expenditure is not only done to construct roads, but rather to provide education, to provide better health services, to provide more opportunities.
If an individual is more educated and healthy then the remaining candidates his chances for a better job are even higher, with that he shall contribute to GDP.
With taxes the buying capacity of individuals earning are decreased, also with the levy of taxes government tends to earn more. With this again the GDP suffers directly.
