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kolezko [41]
3 years ago
5

Young Pharmaceuticals is considering a drug project that costs $2.42 million today and is expected to generate end-of-year annua

l cash flows of $211,000 forever. At what discount rate would the company be indifferent between accepting or rejecting the project?
Business
1 answer:
Norma-Jean [14]3 years ago
4 0

Answer:

At 8.72% the company would be indifferent between accepting or rejecting the project

Explanation:

To be indifferent to accepting or rejecting the project, the initial cost of the project should equal the present value of all expected cash inflow to the project i.e. the Break-even point which is the point at which revenue = cost, thereby generating zero profit.

From the question, Young Pharmaceuticals is investing $2.42 million and expects an annual year end cash flow of $211,000 forever. We therefore apply the annuity to perpetuity formula

PV of perpetuity = Periodic cashflow/interest rate

cross multiply and make Interest the subject of the formular

= Interest = Periodic cashflow/PV of perpetuity

i = 211000/2420000

= 0.0872

= 8.72%

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cestrela7 [59]

Answer:

create awareness

Explanation:

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4 0
4 years ago
Mark, who recently won a lottery, tells Sean that he will split his lottery winnings with him if Sean can arrange Mark's intervi
Zepler [3.9K]

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Sean arranging the interview with his boss

Explanation:

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7 0
3 years ago
what compiles customer information from a variety of sources and segments the information for different
sammy [17]

Answer:

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Generally, a marketing mix is made up of the four (4) Ps;

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3 0
3 years ago
You're viewing a home with a buyer client. When you open one of the bedroom closets, you find a piece of paper with some informa
alukav5142 [94]

The piece of paper and stuck map of the United States means that the home is a manufactured home and this is the data plate.

<h3>What is a manufactured home?</h3>

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Hence, the discovery of piece of paper and stuck map of the United States in the bedroom means that the home is a manufactured home and this is the data plate.

Read more about map

<em>brainly.com/question/1026002</em>

#SPJ1

8 0
2 years ago
Oceanside Marine Company manufactures special metallic materials and decorative fittings for luxury yachts that require highly s
VladimirAG [237]

Answer:

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Explanation:

What is the direct materials cost variance?

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