Answer:
Roper Spring Water should not buy the machine, since it produces a negative net present.
Explanation:
Summary of Cash Flows on the Machine are as follows :
Year 0 = ($230,000)
Year 1 = $55,000
Year 2 = $65,000
Year 3 = $75,000
Year 4 = $75,000
Interest rate = 7%
Using the CFj Function of the Financial calculator this will be computed as :
($230,000) CF j 0
$55,000 CF j 1
$65,000 CF j 2
$75,000 CF j 3
$75,000 CF j 4
i/yr = 7%
Therefore Net Present Value is - $3,385.13
Since this is a negative Net Present Value, Roper Spring Water should not buy the machine.
Other things equal, the demand for a good tends to be more inelastic A) the fewer the available substitutes.
Inelastic merchandise is usually necessities without applicable substitutes. The maximum commonplace goods with an inelastic call for are utilities, pharmaceuticals, and tobacco products. companies imparting such merchandise hold greater flexibility with prices because demand stays constant even if fees boom or decrease.
Inelastic is a monetary term regarding the static amount of a terrific or service while its price adjustments. The inelastic manner that when the rate goes up, customers' shopping for habits live about the same, and when the rate goes down, consumers' shopping for conduct additionally remains unchanged.
An elastic call for is one in which the exchange in quantity is demanded because of exchange in rate is huge. An inelastic call is one in which the change in the amount demanded due to an alternate in charge is small.
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Answer:
$3,240
Explanation:
Calculation for the annual tax liability on the property
Using this formula
Annual tax liability= (Tax rate× Real property )
Where= Tax rate =18 million
Real property=180,000
Let plug in the formula
Annual tax liability=( .018x180000)
Annual tax liability=$3,240
Therefore the annual tax liability on the property is $3,240
Answer: The higher the risk, the higher the return.
Returns from an investment refers to the gains or losses over a specified period, and is quoted as percentage.
Risk refers to the possibility or the chance that the actual return that is earned is greater than or less than the return expected by the investor. Thus, uncertainty is another name for risk.
If the returns from an investment are certain, the risk involved is low. When risk is low, the returns are also low. For e.g. the return from a T-bill is low because the risk of default is zero, since the government can print money to fund its debt.
The higher the level of risk involved, the greater the potential for a higher return.