As a financial manager you must choose between three alternative investments. Each investment is expected to provide cash inflow
s for the next four years as described below. Based on the goal of shareholder wealth maximization, you would ________. Year Investment A Investment B Investment C 1 $25,000 $17,500 $10,000 2 $20,000 $17,500 $15,000 3 $15,000 $17,500 $20,000 4 $10,000 $17,500 $25,000 Total $70,000 $70,000 $70,000
1 answer:
Full question attached
Answer:
B. Choose investment A
Explanation:
Looking at the investment cash flows for the four years, investment A maximises the shareholders wealth mostly because it covers cost of investment quicker than other investments B, C and D. It begins with the highest cash flow return, for first and second year therefore pay back period is lower with investment A. Also net present value is higher.
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Answer:
option D "The demand is unitary elastic."
Explanation:
Data provided:
At price, P1 = 3,000 units
Demand, D1 = $ 50
also,
at price P2 = $ 60
Demand, D2 = 2,500 units
Now,
the percentage change in price =
or
the percentage change in price = 20%
and,
The percentage change in the quantity =
or
The percentage change in the quantity = -20%
The elasticity in demand (Ed) is given as:
Ed = (Percentage change in quantity) / (Percentage change in price)
on substituting the values, we get
Ed = (-20%) / 20%
or
Ed = - 1
Here the negative sign depicts the inverse relation between the price and the demand.
hence, the correct answer is option D "The demand is unitary elastic."
The short-run average total cost of Ike's Bikes of producing 100 bikes is $360.
<h3>What is the short-run average total cost ?</h3>The short-run is a production period where some of the factors used in the production process are fixed and others are variable. The short-run average total cost is the total cost divided by total output. Total cost is the sum of fixed cost and variable cost.
Please find attached the complete question. To learn more about average cost, please check: brainly.com/question/26959638
