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
IgorLugansk [536]
3 years ago
13

Hillsdale is considering two options for comparable computer software. Option A will cost $25,000 plus annual license renewals o

f $1,000 for three years, which includes technical support Option B will cost $20,000 with technical support being an add-on charge. The estimated cost of technical support is $4,000 the first year, $3,000 the second year, and $2,000 the third year. Assume the software is purchased and paid for at the beginning of year one, but that technical support is paid for at the end of each year. Interest is at 8%. Ignore income taxes.
Required: Determine which option should be chosen based on present value considerations.

Business
1 answer:
Jlenok [28]3 years ago
4 0

Answer:

Option a should be selected

Explanation:

After considering the PV of both options A and B the option that has been selected is A.

For option A:-

A total of the present value of option A= -25000-925.926-857.339-793.832 = -27577.097

Present value = 27577

For option B,:-

Total = -20,000-3703.704-2572.017-1587.664

= -27863.385

The present value of option B = 27863

From the calculations I have attached, it is evident that option A has lower present value compared to option B. Therefore option A should be selected.

You might be interested in
Spurling et al. investigated the effects of two vocabulary learning strategies on word retention two weeks later. in this exampl
oee [108]

Learning strategy is the <u>independent </u>variable and word retention is the <u>dependent </u>variable.

A dependent variable is the thing that is being measured or tested by changes in the independent variable. Spurling wanted to test how word retention <em>depended </em>on different learning strategies.

7 0
3 years ago
Read 2 more answers
Trey, Inc. reports a taxable loss of $140,000 for 2018. Its taxable incomes for the years 2015 through 2017 respectively were $2
laiz [17]

Answer:

$117500

Explanation:

Taxable loss = $140000 for 2018

Taxable incomes : $25000 for 2015, $35000 for 2016, $40000 for 2017

tax rate = 30%

Net loss on 2018 income statement can be offset by the taxes paid on taxable income for 2 years prior to 2018 ( i.e 2016 and 2017 )

first calculate taxes on taxable incomes for 2016 and 2017

$35000 * 30% = $10500

$40000 * 30% = $12000

hence taxable profit = 10500 + 12000 = $22500

Net loss to be reported on 2018 income statement

= $140000 - $22500 = $117500

8 0
3 years ago
he theory of efficiency wages provides a possible explanation as to why Group of answer choices workers form unions. firms shoul
Katena32 [7]

Answer:

Firms may be inclined to keep their workers’ wages above the equilibrium level.

Explanation:

The efficiency wage theory states that if an employer increases the wage of his/her employees, they will be motivated and their productivity will increase. The increase in productivity should offset the increased labor costs. So the costs of higher wages should be recouped through increased productivity. Higher wages also reduce worker turnover, reducing hiring and training costs.

4 0
3 years ago
Absent any exaggeration, supply chain professionals could boast how crucial their role is in satisfying B2B and B2C customers al
const2013 [10]

Answer:

True, but it applies to everyone in the organization.

Explanation:

Modern companies can only be successful if every single employee works as a team member, since competition keeps increasing and customers' expectations keep rising.

Every single role within an organization is important. Can supply chain professionals distribute a product that doesn't exist (wasn't manufactured on time)? Could they distribute a product that no one wants to buy (marketing and sales are extremely important also)? Could anyone work if the finance department couldn't do its job and there was no money in the company?

We tend to believe that what we do is extremely important and difficult to do, and other people have it easier because their are simpler than ours. But that is just nonsense. Once I heard a quarterback talking about who was the most important player in a football team, and his answer really surprised me, "Quarterbacks fill stadiums, but defenses earn championships". On a team no one is more important, the chain breaks on its weakest link.  

7 0
3 years ago
Big Tree Lumber has earnings per share of $1.36. The firm's earnings have been increasing at an average rate of 2.9 percent annu
GalinKa [24]

Answer:

The firm's PEG ratio is equal to 5.93

Explanation:

A valuation metric for determining the relative trade-off between the price of a stock, the earnings generated per share (EPS), and the company's expected growth are referred to as the 'PEG ratio' (price/earnings to growth ratio).

Generally, a company with a higher growth rate would have a higher P/E ratio.

PE ratio = Stock price/EPS

             = 23.4/1.36

 PE ratio = 17.205

PEG ratio = PE ratio/ Earning growth ratio

                 = 17.205/2.9

PEG ratio    = 5.93

3 0
3 years ago
Other questions:
  • Flo is working on a construction site when she is injured on the job in the collapse of a girder company-made beam. at the time,
    8·1 answer
  • Sketches Inc. purchased a machine on January 1, 2016. The cost of the machine was $29,000. Its estimated residual value was $9,0
    6·1 answer
  • Which two things do benefits tell you about a product
    13·1 answer
  • True or false: as a patient, your doctor must have you sign a hipaa consent and release form to share your ephi or phi with insu
    13·1 answer
  • Production and sales estimates for April are as follows: Estimated inventory (units), April 19,000 Desired inventory (units), Ap
    10·1 answer
  • A currency drain occurs when
    14·1 answer
  • According to the _____________ of Alderfer’s ERG theory, an already-satisfied lower-level need can become reactivated when a hig
    7·1 answer
  • The partners share profits and losses in the ratio of 5:3:2, respectively. The partners agreed to dissolve the partnership after
    14·1 answer
  • If plant assets of a manufacturing company are sold at a gain of $1,000,000 less related taxes of $350,000, and the gain is not
    8·1 answer
  • Managerial accountants:
    9·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!