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3 years ago

When choosing between mutually exclusive projects, what is the best method to use?

Business

1 answer:

KIM [24]3 years ago

7 0

Answer:

Option C. The highest NPV is always the best option.

Explanation:

The reason is that IRR assumes that the reinvestment rate is also at IRR which is not a realistic assumption. The Net Present Value resolves this as it assumes that the reinvestment rate is cost of capital and hence is more better than IRR to appraise the project.

The decision rule in the Net present value method is that the project which has higher positive Net present value is regarded as best project among two mutually exclusive projects.

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Stan has a summer beach cottage that he has owned for many years. The cottage is valued at $ 125 comma 000. This year, Stan spe

anzhelika [568]

Answer:

Case 1. $850

Case 2. $2.300

Explanation:

Improvement in cottage would cost (250 + 600) = 850. So, increase in GDP is 850.

If he actually hired the painter total cost would be (1.000 + 250 + 450 + 600) = 2.300. So, increase in GDP is 2.300

8 0

3 years ago

Brainstorming helps coworkers

kaheart [24]

Answer:

free to share their voice

Explanation:

Brainstorming helps coworkers "free to share their voice."

This is because Brainstorming is an act in which people or coworkers or employees come together to share varying thoughts, ideas, and opinions about a particular topic or issue to solve the problem involved.

It is an informal way of getting ideas to solve issues.

4 0

3 years ago

Harold Manufacturing produces denim clothing. This year, it produced 5,000 denim jackets at a manufacturing cost of $45 each. Th

saw5 [17]

Answer:

ALTERNATIVE 1 $30,000

ALTERNATIVE 2 $28,000

ALTERNATIVE 3 $33,000

Explanation:

Calculation for the incremental income

ALTERNATIVE 1 Sell as it is

Incremental revenue $30,000

(5,000*$6)

Incremental costs $0

Incremental Income $30,000

ALTERNATIVE 2 Disassemble and sell to recycler

Incremental revenue $60,000

(5,000*$12)

Incremental costs $32,000

Incremental Income $28,000

ALTERNATIVE3 Rework and turn into good jackets

Incremental revenue $135,000

(3,000*$45)

Incremental costs $102,000

Incremental Income $33,000

Therefore based on the above calculation the company should choose ALTERNATIVE 3 of the amount of $33,000

4 0

3 years ago

Allstar Exposure designs and sells advertising services to small, relatively unknown companies. Last month, Allstar had sales co

Mariana [72]

Answer:

1. Prepare an income statement for Allstar for the past month.

The income statement is given below.

Sales $ 410,000

Commission Cost ($ 50,000)

Technology Cost ($ 75,000)

R/D Cost* ($ 200,000)

Selling expenses ($ 10,000)

Admin expenses ($ 35,000)

Net profit $ 40,000

* In absence of information it is assumed that research and development costs of $200,000 meet defination of expense as per accounting standard (IAS 38).

2. Briefly explain why Allstar's income statement has no line for cost of goods sold.

As per question Allstars is a service oriented company. In services oriented company there is no good that company is manufacturing and selling. So there will not be any cost of good sold line item in income statement.

6 0

3 years ago

Read 2 more answers

You were recently hired by a firm as a project analyst. The owner of the firm is unfamiliar with financial analysis and wants to

zalisa [80]

Answer: Profitability index is the financial method of analysis which will provide the information that the owner requests

This is an assessment technique inflicted to possible outlays. This splits the proposed capital flow by the planned capital outflow to find out the profitability of a project

Therefore the correct option is (d).

3 0

3 years ago