Answer:
Option B is the correct answer,1.05
Explanation:
Present value index can be computed using the below formula:
present value index=present value of cash inflows/initial amount invested
present value of cash inflows=annual net cash flow*present value factor of annuity
annual net cash flow=$93,750
present value factor of annuity=4.212
present value of cash inflows=$93,750*4.212=$394,875.00
initial amount invested is $375,000
present value index=$394,875.00/$375,000
=1.053
The present value index of this project is approximately 1.05,which is the option B in the multiple choices
1. Critical Thinking
2. Project Management
3. Analytical Skills
4. Holistic Approach
5. Technical Skills
Answer:
(A) Rate earned on stockholder's equity=15%
(B) Rate earned on common stockhloder's equity= 16%
Explanation:
A company reports the following profitability analysis
Net income of $375,000
Preferred dividend of $75,000
Average stockhloder's equity of $2,500,000
Average common stockhloder's equity of $1,875,000
(A) The rate earned on stockholder's equity can be calculated as follows
= Net income/Average stockholders equity
= $375,000/$2,500,000
= 0.15×100
= 15%
(B) The rate earned on common stock holder's equity can be calculated as follows
= Net income-Preferred dividend/Average common equity
= $375,000-$75,000/$1,875,000
= $300,000/$1,875,000
= 0.16×100
= 16%
Hence the rate earned on stockholder's equity and common stockhloder's equity is 15% and 16% respectively.
Answer:
$1,302.82
Explanation:
The computation of the price that need to sell the bond is shown below:
Here we calculate the present value for the same
Given that
RATE = 5%
NPER = 30 - 1 = 29
PMT = $1,000 × 7% = $70
FV = $1,000
The formula is shown below:
=-PV(RATE;NPER;PMT;FV;TYPE)
After applying the above formula, the present value is $1,302.82
The best answer is C) Government regulations can lead to an increase in production costs.
One opportunity cost of government regulation is the fact that government regulation often causes companies to change their production in ways that make it less efficient and more costly, although the idea that the benefits to society outweigh these costs.
<span>
A) is not negative and not necessarily an effect of regulation
B) is not negative</span>
