Answer:
Stenson, Inc.
The payback period for each project is:
Project A = 3 years
Project B = 4 years
Explanation:
a) Data and Calculations:
Year Cash Flow A Cash Flow B
0 –$ 64,000 –$ 109,000
1 26,500 28,500
2 34,400 33,500
3 28,500 25,500
4 14,500 231,000
Total inflow $103,900 $318,500
b) The payback period is the time when the cash outflow is recouped. For project A, the payback period occurs in year 3. For project B, the payback period occurs in year 4. Based on the company's cutoff of three years, Project B may not be accepted even with its large cash inflow in year 4. Therefore, the best decision will be to discount the cash inflows with a suitable rate of interest. This will help Stenson, Inc. to decide between accepting Project A or Project B.
Answer:
Following is attached the solution for each part of the question.
I hope it will help you a lot!
Explanation:
Answer:
Building and construction
Explanation:
2 one I think idk correct me if wrong
Answer:
The reason is that high rates of money growth actually lower interest rates.
Explanation:
During economic hardship, governments employ expansionary fiscal policy: this policy consists in the central bank (the Fed in the case of the U.S.) printing money to lower interest rates. The reason is that more money in the economy raises the availability of loanable funds, and this reduces in turn the interest rates that securities pay.
Government bonds, being the safest security, will have their interest rates reduce substantially during times of high money growth due to expansionary fiscal policy.
