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3 years ago

The Matterhorn Corporation is trying to choose between the following two mutually exclusive design projects:

Business

1 answer:

kari74 [83]3 years ago

4 0

Answer:

PI for the first project = 1 + ($5,673.93 / 87,000) = 1.065

PI for the second project = 1 + ($5,561.23 / $55,000) = 1.101

b. the second project should be chosen because the PI is higher

NPV for 1 = $5,673.93

NPV for 2 = $5,561.23

Explanation:

profitability index = 1 + (NPV / Initial investment)

Net present value is the present value of after tax cash flows from an investment less the amount invested.

NPV can be calculated using a financial calculator

for the first project

Cash flow in year 0 = –$87,000

Cash flow in year 1 = 36,900

Cash flow in year 2 = 47,000

Cash flow in year 3 = 27,000

I = 10%

NPV = $5,673.93

for the second project

Cash flow in year 0 = –$55,000

Cash flow in year 1 = 11,700

Cash flow in year 2 = 34,500

Cash flow in year 3 = 28,500

I = 10%

NPV = $5,561.23

PI for the first project = 1 + ($5,673.93 / 87,000) = 1.065

PI for the second project = 1 + ($5,561.23 / $55,000) = 1.101

b. the second project should be chosen because the PI is higher

To find the NPV using a financial calculator:

1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.

2. after inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.

3. Press compute

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OLEGan [10]

Answer:

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BV = $57798

Explanation:

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In this question the bridge across Rio Grande being built by Del Norte Brick co is treated under 3-year MACRS, for which the rates are as follows:

33.33% for the first year

44.45% 2nd year

14.81% 3rd year

7.41% 4th year

We have been asked to determine 3rd years' depreciation and book value, determined as follows:

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Depreciation year 2: $780000 44.45% = $346710

Depreciation year 3: $780000 14.81% = $115518

So the depreciation for year 3 = $115518

The book value is calculated as follows:

Book value = cost - accumulated depreciation

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3 years ago

Mister Jones was selling his house. The asking price was $220,000, and Jones decided he would take no less than $200,000. After

user100 [1]

Answer:

D) not able to be calculated from the information given.

Explanation:

Consumer surplus is the difference between willingness to pay of a consumer and the price actually paid for a good or service.

The price paid by Smith is $205,000 but there's no information on the willingness to pay of Smith. Therefore, the consumer surplus can't be calculated.

I hope my answer helps you.

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3 years ago

Assuming that a marketing research study will answer important questions and reduce uncertainty associated with the proposed pro

scoray [572]

Answer:

The correct answer is C. Is top management committed to the study?

Explanation:

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1. to solve problems, for example, determine the potential of a market.

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That is why managers and researchers continually focus on the search for those practices that will allow them to improve the organization and direction of their processes and therefore increase their likelihood of success.

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3 years ago

Level of education and income earned are generally_

ivanzaharov [21]

Hi there

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3 years ago

A company is considering the purchase of new equipment for $57,000. The projected annual net cash flows are $23,400. The machine

lina2011 [118]

Answer:

Net Present Value = $3,304.069

Explanation:

To determine whether or not the investment was right, we will need to determine the net present value of the investment (NPV).

The NPV is the difference between the present value PV of cash inflows and the PV of cash outflows. A positive NPV implies a good investment decision and a negative figure implies the opposite.

NPV of an investment(NPV)

NPV = PV of Cash inflows - PV of cash outflow

The cash inflow is an annuity.

PV of annuity= A× 1 -(1+r)^(-n)/r

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Net Present Value = 60,304.06 - 57,000 = 3,304.069

Net Present Value = $3,304.069

Kindly note that a discount rate of 8% was used as it is the opportunity cost of capital for the investment.

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3 years ago