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posledela
3 years ago
15

The development cost of a project X is $150,000. The operating costs for year 1, 2 and 3 respectively are $5000, $6000, and $ 70

00. The benefits for year 0, 1, 2, 3 respectively are 0, $80,000, $90,000, and $70,000. The discount rate is 4%. The NPV is_
Business
1 answer:
Sati [7]3 years ago
5 0

Answer:

NPV= $31,808.91

Explanation:

Giving the following information:

Io= -$150,000.

The operating costs:

Year 1= $5,000

Year 2= $6,000

Year 3= $7,000

The benefits:

Year 1= $80,000

Year 2= $90,000

Year 3= $70,000

To calculate the Net Present Value (NPV) we need to use the following formula:

NPV= -Io + ∑[Cf/(1+i)^n]

Cf= cash flow

Io= -150,000

Cf1= 80,000 - 5,000= 75,000/1.04= $72,115.39

Cf2= 90,000 - 6,000= 84,000/1.04^2=$77,662.72

Cf3= 70,000 - 7,000= 63,000/1.04^3= $56,006.77

NPV= $31,808.91

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Answer: The correct answer is "D. Its standards apply to all types of businesses, including electronics and chemicals.".

Explanation: The ISO 9000 standards are a set of Quality Control and quality management, established by the International Organization for Standardization (ISO). They can be applied in any type of organization or activity oriented to the production of goods or services. The standards include both the minimum content and the specific implementation guides and tools as well as the audit methods.

5 0
2 years ago
Match your vocabulary word with the phrase that defines it. 1 . how land is used in cities overurbanization 2 . a situation in w
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1. How land is used in cities – URBAN FORM

2. A situation in which resources are being used up at a faster rate than they can be replaced – UNSUSTAINABLE DEVELOPMENT

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7 0
3 years ago
Your investment portfolio consists of ​$15 comma 000 invested in only one stocklong dashAmazon. Suppose the​ risk-free rate is 5
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Answer:

a)

The CAPM hypothesis states that the effective market is utilized place in the market and has the maximum eminent expected return of any assortment for a given randomness and the smallest variability for a assumed expected return. By allotment utilized place in the market assortment, you can achieve a standard return,

Thus,  

Expected Rate of Return = [Risk free Rate + Beta × (Market Risk - Risk free Rate)]

Beta = [Expected Rate of Return – Risk Free Rate] / [Market Risk - Risk free Rate]

Beta = [12% - 5%] / [10% -5%]

Beta = 7/5

Beta =1.4

The final possible instability while taking the same estimated rate of return as Amazon is $21,000 ($15,000 × 1.4) which indicate that it borrows $6,000 ($21,000 - $15,000). Now the -$6,000 is specified as strength benefit. So the volatility of the asset is,

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Volatility = 0.252 or 25.20%

Therefore the volatility is less than the volatility of Amazon.

b)

The market share has a instability of "n". The corresponding instability of Amazon will be 2.22 (40%/18%). So the assortment with the most notable predictable give back that has a faint variability from Amazon is $33,333.33 ($15,000x 2.22) which will be the market assortment and it also uses $18,333.33 ($33,333.33 - $15,000). Here the -$18,333.33 is specified as strength asset. So the return is,

Expected Return = [Risk free Rate + Beta × (Market Risk – Risk free Rate)]

Expected Return = [5%+ 122 × (10% - 5%)]

Expected Return = [5%+ 122 × 5%]

Expected Return = [0.05+0.111111]

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8 0
3 years ago
Robin needs $25,000 to start a business. In her search for the best (low cost) loan, she has gathered the following information
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Answer:

Bank A

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To recommend from which bank Robin should borrow from, we need to calculate the interest which is the cost of borrowing from each of the banks.

Note:

Interest amount = Total amount to repay - Loan amount .................. (1)

Equation (1) is used as follows:

Bank A:

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Interest/loan rate = ($2,000 ÷ $25,000) × 100 = 8%

Bank B:

Interest = ($7,000 × 4) - $25,000 = $28,000 - $25,000 = $3,000

Interest/loan rate = ($3,000 ÷ $25,000) × 100 = 12%

Bank C:

Interest = ($6,000 × 5) - $25,000 = $30,000 - $25,000 = $5,000

Interest/loan rate = ($5,000 ÷ $25,000) × 100 = 20%

Recommendation

Robin should borrow from Bank A since it offers the lowest loan rate of 8%.

7 0
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Answer:

C. A discipline that enhances the degree of confidence that users can place in financial statements.

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