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loris [4]
3 years ago
5

Ten years ago, Jacobson Recovery purchased a wrecker for $285,000 to move disabled 18-wheelers. He anticipated a salvage value o

f $50,000 10 years after the initial purchase. During this time his average annual revenue totaled $52,000. (a) Was his investment economically justified at a 12% discount rate
Business
1 answer:
expeople1 [14]3 years ago
7 0

Answer:

NPV    =  $24,910.26  

The investment is economically justified because it increases the wealth pg Jacobson Recovery by   $24,910.26

Explanation:

To determine whether the investment is justifiable we will compute the the Net present Value of the project

The Net present value (NPV) is the difference between the Present value (PV) of cash inflows and the PV of cash outflows. A positive NPV implies a good and profitable investment project and a negative figure implies the opposite.  

NPV = PV of cash inflows - PV of cash outflows  

<em />

<em>PV of cash  average revenue = A × (1-(1+r)^(-n))/r</em>

A- average revenue, r- discount ate- 12% , n- number of years- 10

PV of reveue = 52,000 × (1-(1.12)^(-10)/0.12= $293,811.60

<em>PV of salvage value = F × (1+r</em><em>)</em><em>^(-n)</em>

                                 = 50,000 × 1.12^(-10)

                                  = 16,098.66183

NPV = $293,811.60 + 16,098.66183  - $285,000

         =  $24,910.26  

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Southern Tours is considering acquiring Holiday Vacations. Management believes Holiday Vacations can generate cash flows of $218
Pepsi [2]

Answer:

$519,799.59

Explanation:  

Discount rate = R = 14.50%

Year    Cash flows     Discount factor     PV of cash flows

1            218,000.00          0.873362            190,393.0131  

2           224,000.00          0.762762           170,858.6793

3           238,000.00          0.666168            <u>158,547.9011</u>

          Total of PV = NPV =                           <u> $519,799.59</u>

<u />

Note:

Df = 1/(1+R)^Year

PV of cash flows = Cash flows x Df

7 0
2 years ago
Asking yourself "What can I do to build a loyal customer base?" is an example of
MakcuM [25]

Correct answer is C, Creativity.

Asking yourself, What can i do to build a loyal customer base?, is an example of Creativity.

When a person in an organization is creative and wants to build a loyal customer base, he asks himself that how can he build it. He finds out ways to build a loyal customer base. He innovates, he takes out the best creativity out of him. When he is focusing on asking himself the solutions, he is basically creative who is seeking answers within himself.

4 0
3 years ago
Cox Electric makes electronic components and has estimated the following for a new design of one of its products:
vfiekz [6]

Answer:

a) attached below

b) P( profit ) = TR(q) - TC(q)

c) attached below

d) -$5000 ( loss )

Explanation:

Given data:

Fixed Cost = $10,000

Material cost per unit = $0.15

Labor cost per unit = $0.10

Revenue per unit = $0.65

<u>a) Influence diagram to calculate profit </u>

attached below

<u>b) derive a mathematical model for calculating profit.</u>

VC = variable cost per unit , LC = per unit labor cost , MC = per unit marginal cost, TC = Total cost of manufacturing , FC = Fixed cost, q = quantity, TR = Total revenue, R = revenue per unit

VC = LC + MC

TC (q) = FC + ( VC * q )

TR (q) = R * q

P( profit ) = TR(q) - TC(q) ------------ ( 1 )

c)  attached below

<u>d) If Cox Electrics makes 12,000 units of the new product </u>

The resulting profit = -$5000

q = 12

P = TR ( q ) - TC ( q )

  = ( R * q ) - ( Fc + ( Vc * q ) )

  = ( 0.65 * 12000 ) - ( 10,000 + ( 0.25 * 12000 )

  = -$5200

3 0
3 years ago
Leaf] Leaf, an employee of the California Department of Forestry, insisted on signing inter-office memoranda with his name and t
dusya [7]

Answer: If it has a secular legal purpose, has a primary effect of neither advancing nor inhibiting religion, and does not foster an excessive government entanglement with religion

Explanation:

The Establishment clause prevent the Congress from having a state religion or honig preference to one religion above another one.

The circumstances that a state law would be permissible under the establishment clause include if it has a secular legal purpose, has a primary effect of neither advancing nor inhibiting religion, and does not foster an excessive government entanglement with religion.

5 0
2 years ago
When Disney acquired Marvel Comics on August 31, 2009, for $4.24 billion, management needed to determine whether there were oppo
zhannawk [14.2K]

Answer:

retaining cultural independence of the businesses, individual brands and operating differences encouraging knowledge-sharing and collaborative activity among the businesses.

Explanation:

When Disney purchased Marvel they were probably searching for synergy which means that their combined effort is larger than the addition of their individual efforts. Synergy is achieved through sharing resources and allocating them more effectively, not by separating the companies.

6 0
3 years ago
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