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2 years ago

A firm, with an 18% cost of capital, is considering the

Business

1 answer:

mafiozo [28]2 years ago

3 0

Answer:

a. $316,920

Explanation:

The computation of the net present value for Project A is shown below:

The net present value = Cash inflow after considering the discount factor - initial cost or initial investment

Cash inflow after considering the discount factor = $7,400,000

The discount factor for 4 years at 18% = 0.5158

So, the cash inflow is

= $7,400,000 × 0.5158

= $3,816,920

And, the initial investment is $3,500,000

So, the net present value is

= $3,816,920 - $3,500,000

= $316,920

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2 years ago

When the price is $12 the quantity demanded is 50. When the price increases to $24 the quantity demanded decreases to 30. Calcul

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Answer:

PED = -0.4 or |0.4| in absolute terms

Explanation:

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% change in price = [($24 - $12) / $12] x 100 = 100%

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2 years ago

Suppose the economy is operating at a point where output is less than the natural level of output. Which of the following statem

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Answer: a) the price level is less than the expected price level.

Explanation:

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This is because the Short Run Aggregate Supply Curve and the Demand curve will intersect at a lesser quantity which will equate to a lower price as well because the economy is producing less and the people are demanding less as well so the point at which they meet will be a lesser price.

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2 years ago

Why does a price floor lead to surpluses? Why does a price ceiling lead to shortages?

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Answer:

Shortage: there is more demand than there is at the equilibrium price. There is also less supply than there is at the equilibrium price, thus there is more quantity demanded than quantity supplied.

Your pretty much short in supply and cant fulfill the demand

While surplus

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Theirs a a large amount of supply due to the pricing most likely beign high

Explanation:

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3 years ago

Riya has recently started a restaurant in a commercial area that already has many other establishedrestaurants and popular fast-

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Answer:

Option 4 Building is the most valuable asset owned by Riya

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The reason is that the asset lowers the breakeven point and also helps to increase the profit by offering at lower prices than the competitor to increase the product demand and earn more by increased demand (Demand and price relationship application). So the most valuable asset from the business perspective is building owned by Riya.

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2 years ago