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Law Incorporation [45]
3 years ago
12

initial cash investment of $388,000. The project will produce no cash flows for the first two years. The projected cash flows fo

r years 3 through 7 are $69,000, $88,000, $102,000, $140,000, and $160,000, respectively. How long will it take the firm to recover its initial investment in this project?
Business
1 answer:
Sedaia [141]3 years ago
8 0

Answer:

6.92 years

Explanation:

The payback period measures how long it takes for the amount invested in a project to be recovered.

The total cost of the project is $388,000.

Because the project generates no cash flow in the first and second year , the amount recovered would be 0.

In the third year, the amount recovered of $388,000 is $69,000. This reduces the cost of the project to $319,000.

In the fourth year , the amount recovered is $88,000. This reduces the cost of the project to $231,000.

In the fifth year, the amount recovered is $102,000. This reduces the cost of the project to $129,000.

In the sixth year, the amount recovered is $140,000. This covers the cost of the project and generates a profit of $11,000.

The amount is recovered in the 6th year + 129000/ 140,000 = 6.92 years

I hope my answer helps you

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A house in the neighborhood has been well maintained. The seller has made sure that all the electrical systems are working to co
Greeley [361]

Answer:

utility power

Explanation:

In simple words, the location of the house has been said to be in a prominent region, it gives the house a competitive advantage over other units, also the house has been maintained and restructured bu the seller so that it looks more good and healthy.

The subject unit has been restructured in a way that it satisfied all the needs of the buyer, thus, it brings a lot of utility power to the market in respect of its value.

6 0
3 years ago
05. In identifying risks to then manage and control, as the portfolio
nasty-shy [4]
Introduction
“Project risk analysis,” as described by The Project Management Institute (PMI®), “includes the processes concerned with conducting risk management, planning, identification analysis, response, and monitoring and control on a project;./…” (PMI, 2004, p 237) These processes include risk identification and quantification, risk response development and risk response control.

Because these processes interact with each other as well as with processes in other parts of an organization, companies are beginning to measure risk across all of their projects as part of an enterprise portfolio.

Risk management can be as simple as identifying a list of technological, operational and business risks, or as comprehensive as in-depth schedule risk analysis using Monte Carlo simulation. But because risk is a driver in an organization's growth – the greater the risk, the greater the reward – the adoption of a structured enterprisewide project risk analysis program will give managers confidence in their decision-making to foster organizational growth and increase ROI for their stakeholders.

Choosing the right projects

How well an organization examines the risks associated with its initiatives, how well it understands the way that projects planned or underway are impacted by risk, and how well it develops mitigation strategies to protect the organization, can mean the difference between a crisis and an opportunity.

Examples abound of companies that have seen their fortunes rise or drop based on the effectiveness of their risk management – a pharmaceutical company makes headlines when its promising new drug brings unforeseen side effects. Or a large telecom corporation pours millions of dollars into perfecting long distance, while new technologies are presenting more exciting opportunities.

Today that pharmaceutical is distracted by lawsuits and financial payouts, finding itself with a shrinking pipeline of new drugs. The telecom, on the other hand, after using a portfolio risk management software application to rationalize and rank its initiatives, made the decision to shift its research dollars away from perfecting long distance and into developing VOIP -- rejuvenating and reinforcing its leadership position.
7 0
2 years ago
Consider this scenario. During the early 2000s, the Midwestern United States experienced a drought, or lack of rainfall. This ru
Nikitich [7]
A. increase the price of tortillas
3 0
3 years ago
Read 2 more answers
A manufacturer estimates that its product can be produced at a total cost of C(x) = 50,000 + 100x + x3 dollars. If the manufactu
timofeeve [1]

Answer:

The level of production x that will maximize the profit is: 22,966

Explanation:

C(x) = 50,000 + 100x + x³

R(x) = 3400x

P(x) = R(x) - C(x)

      = 3400x - [50,000 + 100x + x³]

      = 3400x - 50,000 - 100x - x³

      = 3300x - 50,000 - x³   .................... (A)

P'(x) = 3300(1) - 0 - 3x²

       = 3300 - 3x²

At a critical point, P'(x) = 0

∴   0 = 3300 - 3x²

  3x² = 3300

    x² = 1100

     x = ± \sqrt{1100}

P"(x) = -6x

P(\sqrt{1100}) = -6 (\sqrt{1100})   < 0

by second derivative, 'P' max at    x = \sqrt{1100} = 33.17 (rounds)

since x =  \sqrt{1100} ,

recall that P(x) = 3300x - 50,000 - x³ from equation (A)

Therefore, Maximum Profit

P(\sqrt{1100}) = 3300\sqrt{1100} - 50000 - \sqrt{1100} ^{3}

              = 3300(33.17) - 50,000 - 33.17³

              = 109461 -50,000 - 36495.26

              = 22,965.74

Maximum profit is 22,966 to the nearest whole number

5 0
2 years ago
Cash Flows from Operating Activities—Indirect Method
Dmitrij [34]
$396,200 + 61,250 +   27,600+ 9,000+ = 479,000 dollars
4 0
3 years ago
Read 2 more answers
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