I think it'd be E. I hope that helps!
Answer:
d. 13.31%
Explanation:
IRR is the rate at which NPV = 0
IRR 13.31%
Year 0 1 2 3
Cash flow stream -1100.000 450.000 470.000 490.000
Discounting factor 1.000 1.133 1.284 1.455
Discounted cash flows project -1100.000 397.136 366.060 336.804
NPV = Sum of discounted cash flows
NPV Project = 0.000
Where
Discounting factor = (1 + discount rate)^(Corresponding period in years)
Discounted Cashflow = Cash flow stream/discounting factor
IRR = 13.31%
Therefore, The project's IRR is 13.31%
Answer:
The correct answer is option d.
Explanation:
The total economic costs include both explicit as well as implicit costs. The explicit costs are the direct costs incurred and the implicit costs are opportunity costs.
An increase in the opportunity cost will cause the total economic costs to increase. The net benefit is the difference between the total revenue earned and the total cost incurred. An increase in the opportunity cost will cause a net benefit to decrease as total costs will increase.
Answer:
Profit : $297,000
Explanation:
Revenue is the earnings generated by a business by selling products and services. Expenses are the cost incurred in the process of generating revenue for the business.
A business will make profits if revenue exceeds expenses.
In this case, the revenue ($895,000) exceeds expenses($598,000). Therefore, the business will make a profit.
The profit will be revenue minus expenses
=$895,000 -$598,000
=$297,000
Answer:
Average investment(denominator) = $113,000
Explanation:
<em>Annual rate of return is the average annual income as a percentage of average investment
. It is the proportion of the average investment that is earned, on the average, as annual income.</em>
Annual rate of return = annual net income/ average investment
Average investment =( Initial,cost + scrap value)/2
Average investment = (220,000 + 6,000)/2= $113,000
Average investment(denominator) = $113,000
