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pochemuha
3 years ago
9

5. Risk analysis in capital budgeting Projects differ in risk, and risk analysis is a critical component of the capital budgetin

g process. Consider the case of United Recycling Inc.: United Recycling Inc. is one of the largest recyclers of glass and paper products in the United States. The company is looking into expanding into the cardboard recycling business. The company’s CFO has performed a detailed analysis of the proposed expansion. The selling price of recycled cardboard can fluctuate dramatically, depending on the market conditions. By creating models that used different assumptions for the selling price of recycled cardboard but keeping all other inputs in the model the same, the CFO demonstrated the effect of fluctuations in the price of recycled cardboard. Based on the information given, determine which of the statements is correct. The company’s CFO was conducting a sensitivity analysis on the project’s financial model. The company’s CFO performed a scenario analysis on the project’s financial model. Evaluating risk is an important part of the capital budgeting process. Which of the following is measured by its effect on the firm’s beta coefficient? Risk-adjusted cost of capital Market, or beta, risk Corporate, or within-firm, risk Stand-alone risk When dealing with , diversification is totally ignored.
Business
1 answer:
stira [4]3 years ago
5 0

Answer:

A. Market, or beta, risk

Explanation:

i.e when the CFO adjusts the cost per ton of processing the cardboard, the project’s NPV will decrease.

Solution 2 :- The correct answer is (B) I.e Corporate or with in firm risk

a project's risk to the corporation as opposed to its investors

Solution 3 :- Stand alone risk

Stand alone risk is measured by the variability of the project's expected returns - diversification is totally ignored

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In a brainstorming session for a new drug to lower cholesterol, the members of the marketing department agreed the benefits of t
tiny-mole [99]

Answer: C- Encoding

Explanation: Encoding in communication is the process whereby the sender utilizes oral symbols like words, signs, pictures, videos, and non-oral symbols like body language, hand signals, facial expressions for which the sender believes the individual on the receiving side or audience will comprehend without misinterpreting.

It is the way of turning or transforming ideas into communication by using a channel that could be texts, phone calls or even in-person conferences. In this case, the marketing department decides to encode an ad campaign to the market so as to promote the new drug for lowering cholesterol.

8 0
3 years ago
Sadie and Sam share income equally. For the current year, the partnership net income is $40,000. Sadie made withdrawals of $14,0
4vir4ik [10]

Answer:

Explanation:

Beginning capital balance(Sam)  $58000

+ Currnt year income ( $40000 / 2 = $20000) $20000

[Devide by 2 because they share income]

- Sam's withdrawal  ($15000)

Sam's capital balance = 58000+20000-15000 = $63000

8 0
3 years ago
Home Security Systems is analyzing the purchase of manufacturing equipment that will cost $95,000. The annual cash inflows for t
Citrus2011 [14]

Answer:

internal rate of return is 20.463%

Explanation:

given data

Year   Cash Flow

1         $48,000

2         $46,000

3          $41,000

equipment cost = $95,000

to find out

Determine the internal rate of return

solution

we consider here  internal rate of return  is x

so we can say present value of inflows = present value of outflows

equate here

$95000 = \frac{48000}{(x)} +\frac{46000}{(x)^2} +\frac{41000}{(x)^3}  

solve it we get

x = 20.463 %

so internal rate of return is 20.463%

5 0
3 years ago
Emerald Co. uses a perpetual inventory system and records purchases of merchandise at net cost. The company recently purchased 2
Aneli [31]

Answer:

Dr accounts payable   $2,300

Cr cash                                      $2300

Explanation:

Initially the cost of the purchases=$4600

Returning half of the disc means the left for the discs actually bought is half of the invoice price of $4600 i.e $2,300

By not paying within the discount period implies that the debt stands at $2,300

Without mincing words,payment of $2,300 to the supplier automatically translates to debiting account payable with $2,300 and crediting cash account with the same amount.

The correct answer would :

Dr accounts payable   $2,300

Cr cash                                      $2300

This is missing from the options provided.

3 0
3 years ago
1. Companies like Uber, Lyft (one of Uber’s main competitors), and Airbnb (an online marketplace that enables people to lease or
mart [117]

Answer:

Globalization has led to the influx of multinationals in many developing and under developed countries. With the advancement of technology this process has increased and influenced many industries.

Uber is providing convenience to its users to fill the gap between the service provider and service user through a platform

This platform has led to bridge the gap between the user and seller of service.

This convenience can be used not only in the transportation of consumer but can also be used in carrier pick ups. Delivery of foods and mails etc.

It can also be used across industries like in medical industry to provide emergency ambulances. Bridging the gap between medical assistance by providing medical services through apps connecting doctors and patients.

It is being used in freelancing industry as well. To provide a platform for provider of service and consumer.

However in entering into different industries the legal aspects are to be considered to avoid any backlash.

5 0
3 years ago
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