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Sauron [17]
3 years ago
12

Project S has a cost of $11,000 and is expected to produce benefits (cash flows) of $3,400 per year for 5 years. Project L costs

$23,000 and is expected to produce cash flows of $6,900 per year for 5 years. Calculate the two projects' NPVs, assuming a cost of capital of 14%. Do not round intermediate calculations. Round your answers to the nearest cent.
Business
1 answer:
Kipish [7]3 years ago
5 0

Answer:

Project S = $672.48

Project L = $11,500

Explanation:

Net Present Value (NPV) Is Calculated by Taking the Present day (Discounted) Value of all future Net Cash flows based on the Business Cost of Capital and Subtracting the Initial Cost of the Investment.

Using a Financial Calculator NPV calculations will be as follows:

Project S

CF0 = ( $11,000)

CF1  = $3,400

CF2  = $3,400

CF3  = $3,400

CF4  = $3,400

CF5  = $3,400

i = 14 %

NPV = $672.48

Project L

CF0 = ( $23,000)

CF1  = $6,900

CF2  = $6,900

CF3  = $6,900

CF4  = $6,900

CF5  = $6,900

i = 14 %

NPV = $11,500.

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This is a growth strategy with a goal to take customers away from competitors.
vitfil [10]

Answer:

market penetration

Explanation:

As market is already created but the share of the company needs to be higher.

8 0
3 years ago
Beverage companies often use television commercials with images of young people laughing and enjoying themselves on a beach or i
kramer

Answer:

B. Self concepts

Explanation:

Self concepts is basically talls about how individuals perceives or look at their abilities, behavior, unique characteristics and so on. Now, those beverage companies portray people laughing and enjoying themselves while drinking their brand because they aim at selling that concept of happiness as everyone's self concepts revolves around being happy and enjoying one's self. Self concepts gives an idea an individual as on himself on basis of strength, weaknesses, status, contempt and so on.

4 0
3 years ago
Assume that a consumer has a given budget or income of $12 and that she can buy only two goods, apples or bananas. The price of
Natasha_Volkova [10]

Answer:

8

Explanation:

The maximum amount she can spend is $12. If she buys 4 apples, it would cost her : 4 x $1.50 = $6. She would have $12 - $6 = $6 to spend on bananas.

If the price of bananas are $0.75, she can buy a total of $6 / $0.75 = 8 bananas

I hope my answer helps you

3 0
3 years ago
What economic activities are not included in GDP?
laiz [17]
 
1. Illegal and unreported economic activity:  While goods such as illegal drugs, gambling, and prostitution are sold in markets, the transactions are hidden for obvious reasons.
 
2. Home production and bartered goods/services:  If cash doesn't change hands, the transaction will not be included in GDP.  One of the somewhat misleading aspects of GDP is that whether certain things are included depends not on the nature of the good or service, but whether it was (openly) exchanged for cash.  
5 0
3 years ago
Prepare the journal entries to record the following transactions for Reese Company, which has a calendar year end and uses the s
belka [17]

Answer:

Reese Company Journal entries

September 30, 2017

Dr Depreciation Expense 12,000

Cr Accumulated Depreciation -Equipment 12,000

(To record depreciation expense)

Dr Cash 46,000

Dr Accumulated Depreciation-Equipment 44,000

Dr Loss on Disposal of Plant Assets 6,000

Cr Equipment 96,000

(To record sale of delivery equipment at a loss)

b)On June 30, 2017

Dr Cash 24,000

Dr Accumulated Depreciation-Equipment 15,000

Cr Equipment 36,000

Cr Gain on Disposal of Plant Assets 3,000

(To record sale of office equipment at a gain)

Explanation:

a.September 30, 2017

Calculation for Depreciation Expense and Accumulated Depreciation -Equipment

We have to record depreciation expense for the first 9 months of 2017 which is

$80,000 ÷ 5 years = $16,000 ×9/12 = $12,000

Calculation for Accumulated Depreciation-Equipment:

($32,000 + $12,000) =44,000

Calculation for Loss on Disposal of Plant Assets

($52,000 – $46,000) =6,000

b)On June 30, 2017

Calculation for Gain on Disposal of Plant Assets

($24,000 – $21,000)=3,000

7 0
3 years ago
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