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3 years ago

Why might one project have the highest pw while a different project has the largest irr? explain?

1 answer:

8 0

The difference may lie in the project life, sometimes referenced as the planning horizon. A project may have a large internal rate of return (irr), but a very short project life. A second project might have a lower irr, but a much longer life. In that case, the second project will return less per year, but will provide a return for many more years, resulting in a higher pw.

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The XYZ Chemical Company must ship 9,500 gallons of pesticides from its plant in Cincinnati, Ohio, to a customer in Columbia, Mi

never [62]

Answer:

Henderson = $1,200

Central States = $1,000

Based on the calculations, Central States Railroad is better at a lower cost than Henderson

Explanation:

The question is to do an evaluation of the costs of use Henderson Bulk Trucking Company or the Central States Railroad

Step 1) Determine the cost of using Henderson

What is the cost per tank truck = $600

What is the capacity in gallons = 700 galloons

However, since XYZ Chemical needs to ship 9,600 gallons, it means it will make use of 2 trucks from Henderson as follows

The cost of Henderson Bulk Trucking = $600 x 2 = $1,200

Step 2) Determine the cost of using Central Railroad

What is the cost per tank truck = $1000

What is the capacity in gallons = 23,500 galloons

since XYZ Chemical needs to ship 9,600 gallons, it means it will make use of only one of the trucks

The cost of Central Roilroad= $1000 x 1 = $1,000

Based on the calculations, Central States Railroad is better at a lower cost than Henderson

3 0

3 years ago

Creative Sound Systems sold investments, land, and its own common stock for $32.0 million, $14.8 million, and $39.6 million, res

Studentka2010 [4]

Answer:

Creative Sound Systems should report $18,800,000 as net cash flows from financing activities

Explanation:

Cash flow Financing activities are the funds that the business acquire or paid to finance its main activities, these involve borrowing and repaying short-term loans, long-term loans and other long-term liabilities.

From the question, Cash inflow from Issue of common share and Cash outflow from purchase of treasury stock are the only recognizable Financing activities

Particulars Amount

Cash inflow from Issue of common share $39,600,000

Cash outflow from purchase of treasury stock -$20,800,000

Net cash flows from financing activities $18,800,000

7 0

3 years ago

Strengths are typically based on the existence and nature of the __________ possessed by the firm. Weaknesses stem from a lack o

Nikolay [14]

Answer: a) resources and relationships

Explanation:

Strength for any firm according to analysis is considered as the resources existence that help in functioning of organizational process and organizational relationship for strong and reliable customer base.It helps in innovation, improvement and strengthening firm against competition companies.

Other options are incorrect because product, consumer,capital, partnership and patents are not the factors that majorly impact strength of the organization.Thus, the correct option is option(a).

4 0

3 years ago

Epley Industries stock has a beta of 1.25. The company just paid a dividend of $.40, and the dividends are expected to grow at 5

Volgvan

Answer:

A. 5.56%

B. 13.55%

Explanation:

In this question, we are asked to calculate the equity cost using the DCF method and the SML method

A. DCF approach

cost of equity =[ D0(1+growth )/ current price] +growth

= [.40 (1+.05) / 70 ] + .05

= [ .42 / 75] + .05

= .0056 +.05

= 0.0556 same as 5.56%

B)SML approach

Cost of equity = Rf +Beta (Rm-Rf)

= 5.8+ 1.25 (12 -5.8 )

= 5.8+ 1.25 *6.2

= 5.8 + 7.75

= 13.55%

6 0

2 years ago

If a corporate bond is issued with a coupon rate that varies directly with the required return, the price of the bond will

dedylja [7]

The answer to this question is that the price of the bond will be equal to the face value.

Bonds are type of investments in which the investor can receive money on the investment with a fixed interest. Bonds are also known as fixed income securities. This type of investment is less risky because the insurer will return the face value of the investment and interest from the investment is in a fixed rate.

4 0

3 years ago