1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
KiRa [710]
3 years ago
8

You are considering investing in a start up project at a cost of $100,000. You expect the project to return $500,000 to you in s

even years. Given the risk of this project, your cost of capital is 20% p.a. compounded annually. The IRR for this project is closest to:a 20.00%b 25.85%c 15.60%d 18.95%
Business
1 answer:
NemiM [27]3 years ago
8 0

Answer:

b.The IRR is equal to 25.85%

Explanation:

Firstly we are given that i consider investing $100000 which will in this problem be our Cinitial which is the initial investment for the project.

Then now given the risk of this project, my cost of capital is 20% so then we will compare this to the IRR and see if i can accept the project or not if the cost of capital is greater than the IRR than its not good to invest on the project but if the cost of capital is less than the IRR then the this will be a good investment as the cost of capital also checks the opportunity cost.

The future payment cash flows which is $500000 so we will use the following formula:

NPV = (cash flow)/(1+IRR)^n     - initial investment

so we find the present value of the cash flow of the investment and subract the initial investment which will give us a zero cause the present value of the cash flow is equal to the initial investment therefore( n is the period of cash flows):

0= $500000/(1+IRR)^7    - $100000 transpose the initial investment and solve for IRR.

$100000(1+IRR)^7= $500000 then divide both sides by $100000

(1+IRR)^7 =  5          then find the 7nth root of both sides to eliminate the exponent of 7

1+ IRR = \sqrt[7]{5}

1+IRR = 1.258498951 then subtract 1 both sides to solve for IRR

IRR = 0.258498... then multiply by 100 as IRR is a percentage

IRR= 25.85 % rounded off to two decimal places which is the answer b

You might be interested in
A limited liability company (LLC) will be taxed as a corporation unless it elects to be taxed as a partnership. True False
hichkok12 [17]

Answer:

True

Explanation:

A LLC is a company that has its own identity and is taxed separated from all owners and investors.

6 0
3 years ago
Sweet Company’s outstanding stock consists of 1,000 shares of cumulative 5% preferred stock with a $100 par value and 10,000 sha
Diano4ka-milaya [45]

Answer: In year three the preferred stockholders would receive $7,000 and the common stockholders would receive $25,000.

Explanation: Preferred stockholders are always paid before common stockholders. Since this stock in cumulative it means that when there is not enough income in one year to pay the preferred stock then the company needs to pay them when they have the money in the future.

In this case the preferred stock is 5% of $100 par value and is cumulative. This means that every year the company needs to pay 5% times $100 par value on each stock, and there is 1,000 shares, so the total is $5,000 in preferred stock dividends.

In year one and two they did not declare enough dividends to pay this full amount. In year one they declared $2,000 and year two they declared $6,000. At the end of year two they should have received $10,000, but only received $8,000. In year three they need to pay the preferred stockholders the $2,000 that are in arrears, plus the $5,000 for year three, for a total of $7,000. Since there was $32,000 in dividends declared and $7,000 is going to the preferred stockholders, it means that there is $25,000 left for the common stockholders. $25,000/10,000 shares equals $2.50 dividend per share.

5 0
3 years ago
Josh is an HR Manager at RoxCom LLC. He is responsible for conducting performance appraisals for all entry-level employees in hi
Brilliant_brown [7]

Answer:

Development of perfomance standards.

Explanation:

Based on the information in the question above, Josh's next step would likely be to develop the performance standards to be implemented in the guided self-assessment system using management by objectives.

The MBO is a management strategy used in organizations so that there is continuous improvement in processes and organizational performance in the internal and external environment, so in a self-assessment system guided by the MBO it is necessary to develop performance standards so that there is a parameter of the sought-after ideal of employee performance, so that self-assessment is guided by such standards. In this type of strategic management, it is necessary to share the objectives throughout the organization, so that they are clear, precise and shared as part of the organizational culture.

3 0
3 years ago
Acme Global uses a software program to scan applications for minimum qualifications. If an applicant does not meet the minimum r
harkovskaia [24]

Answer:

The correct answer is A. smart technology.

ExplanTation:

Smart technology, today it is sold in any type of electronic device, as well as a telephone, a computer, a TV, cooking utensils and household appliances in general.

This concept of intelligent technology, is justified mainly for the purpose of offering different electronic prototypes, a logical programming that reacts to stimuli that are attributed to its sensors. Something very similar to what occurs with a new brain that, in addition to receiving specific instigations, proceeds in an immediate way to generate the corresponding chords to the dictated call.

In this order of ideas, the electronic devices are endowed with sufficient capacity to understand messages such as, in the case of the cell phone or the television, the presence and use of this device by a person, as it proceeds to lower its performance by optimizing the energy that requires its operation.

6 0
3 years ago
Adaptive selling and consultative selling are the two common types of the Blank______ presentation format.
Citrus2011 [14]

Adaptive selling and consultative selling are the two common types of the need-satisfaction presentation format.

<h3>What is adaptive selling and consultative selling?</h3>

Every person is unique, as are the circumstances surrounding the sale of any product. A selling technique that is used according to the situation that is all customized by involving or adapting to the customer's communication style is known as adaptive selling.

In the consultative selling technique, the focus of the salesman is not on the number of products that are being sold out. The main focus is on the availability of solutions that are tailored to the customer's needs. In this type of selling, a salesman learns more about a customer's needs in a better and more effective way.

Therefore, adaptive selling and consultative selling are the two common types of the need satisfaction presentation format.

Learn more about adaptive selling from here:

brainly.com/question/14264690

#SPJ1

7 0
1 year ago
Other questions:
  • When bernard madoff used money from newer investors to pay off older ones, this was an example of ____?
    11·1 answer
  • • List the four sources of organizational culture
    8·1 answer
  • Fran uses a database software system to remind him when his customers should be ready to reorder his industrial cleaning product
    13·1 answer
  • Bryant Investments is putting out a new product. The product will pay out $32,000 in the first year, and after that the payouts
    8·1 answer
  • ________ is used heavily when introducing a new product category. the objective is to build primary demand.
    11·1 answer
  • If Good C increases in price by 30% a pound, and this causes the quantity demanded for Good D to increase by 40%, what is the cr
    12·1 answer
  • Canyon River, Inc. is looking for an individual who has a broad range of interests and is imaginative, creative, artistically se
    13·1 answer
  • Linda is the manager of a graphic design company. Her IT team asked for her consent to upgrade the editing software used by empl
    12·1 answer
  • Genrapay Inc., a multinational firm, has a branch of operations in a country. Due to rampant militant nationalism, the governmen
    14·1 answer
  • Differentiate between manufacturer and Cunsumer​
    13·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!