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exis [7]
3 years ago
14

The owner of a hair salon spends $1,000,000 to renovate its premises, estimating that this will increase her cash flow by $220,0

00 per year. She constructs the above graph, which shows the net present value (NPV) as a function of the discount rate. At what dollar value should the NPV profile cross the vertical axis?A) $1,000,000B) $780,000C) Cannot be determined because inadequate information is given.D) The vertical axis crossing point cannot be calculated since the cash inflows are in perpetuity
Business
1 answer:
mina [271]3 years ago
8 0

Answer:

correct option is D) The vertical axis crossing point cannot be calculated since the cash inflows are in perpetuity

Explanation:

given data

hair salon spends = $1,000,000

increase cash flow = $220,000 per year

to find out

what dollar value should the NPV profile cross the vertical axis

solution

we know that discount rate is = 0 %

as sum of cash flow is infinite

because cash flow = $220000

cash flow is here perpetual

so we can say that correct option is D) The vertical axis crossing point cannot be calculated since the cash inflows are in perpetuity

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3 years ago
"Corporate officers hold positions of trust in our markets and have important responsibilities to shareholders," said Steven Pei
Fed [463]

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3 years ago
If a company is considering the purchase of a parcel of land that was acquired by the seller for $90,000 is offered for sale at
Lelechka [254]

Answer:

$147,000

Explanation:

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3 years ago
If you beat the market with inside information, you have violated the concept of ___ form efficiency.
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Assume that the farmer and the rancher can switch between producing pork and producing tomatoes at a constant rate. Assume that
dusya [7]

Answer:

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Explanation:

Explanation:

            Labor hours to make 1 lb. of:          lbs. produced in 24 hours

                 Pork                  Tomatoes              Pork            Tomatoes

Farmer         6                            3                       4                       8

Rancher       4                            4                       6                       6

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