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Vanyuwa [196]
3 years ago
10

Ace Inc. is evaluating two mutually exclusive projects—Project A and Project B. The initial investment for each project is $50,0

00. Project A will generate cash inflows equal to $15,625 at the end of each of the next five years; Project B will generate only one cash inflow in the amount of $99,500 at the end of the fifth year (i.e., no cash flows are generated in the first four years). The required rate of return of Ace Inc. is 10 percent. Which project should Ace Inc. purchase?
Business
1 answer:
Alinara [238K]3 years ago
3 0

Answer:

Instructions are listed below.

Explanation:

Giving the following information:

The initial investment for each project is $50,000. Project A will generate cash inflows equal to $15,625 at the end of each of the next five years; Project B will generate only one cash inflow in the amount of $99,500 at the end of the fifth year (i.e., no cash flows are generated in the first four years). The required rate of return of Ace Inc. is 10 percent.

To determine which project to choose we need to use the following formula:

NPV= -Io + ∑[Cf/(1+i)^n]

Cf= cash flow

Project A:

Io= -50,000

Year 1to 5= 15,625

NPV= $9,231.04

Project B:

Io= 50,000

Year 5= 99,500

NPV= -50,000 + 99,500/1.10^5= 11,781.67

The highest NPV is the best option. Therefore, project B is the best.

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In three years, when he is discharged from the Air Force, Steve wants to buy an 8,000 power boat.
eduard

Steve will get $11360 with the process of simple interest.

<h3>what is simple interest?</h3>

Simple interest is calculated based on a loan's principal or the initial deposit into a savings account. Simple interest doesn't compound, therefore a creditor will only charge interest on the principal sum, and a borrower will never be required to pay further interest on the interest that has already accrued.

Rate of interest = 14%

principal + interest = $8000

Time = 3 years

Simple interest

=\frac{8000 \times 3 \times 14}{100}\\=3360

Now principal + interest = 8000+3360 = 11360

Therefore, Steve will get $11360.

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4 0
2 years ago
Sheffield Corp. has equipment with a carrying amount of $2500000. The expected future net cash flows from the equipment are $254
ololo11 [35]

Answer:

No impairment loss would be reported

Explanation:

The computation is shown below;

Impairment loss = carrying value - recoverable amount

Where,

The recoverable amount would be the higher amount of fair market value and value in use

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Now the impairment loss is

= $2,500,000 - $2,545,000

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Since the impairment loss comes in negative so no impairment would be recorded

7 0
3 years ago
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Marrrta [24]

Answer:

Markets are competitive.

Explanation:

In the competitive market, the number of sellers competed with each other in terms of prices, quality, maximize the market share.

In the given situation, various sellers are competed with each other for meeting out the consumer demands also at the same time it offers the goods at lowest cost and highest quality so that it capture the whole market

Therefore the second option is correct

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<h3>What is cultural behavior in business?</h3>

The cultural behavior in business helps to be familiar with the  employees, managers and customers  and the relationship between them as regards the culture of the business.

This help to know the team's behavior, as well as setting them up to to record success in workplace.

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2 years ago
Communication response time must be faster than in the past to succeed in modern workplace t or f?
goblinko [34]

Answer:

T.

Communication response time must be faster than in the past to succeed in the modern workplace. TRUE.

8 0
3 years ago
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