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melomori [17]
3 years ago
12

Baird Bros. Construction is considering the purchase of a machine at a cost of $125,000. The machine is expected to generate cas

h flows of $20,000 per year for 10 years and can be sold at the end of 10 years for $10,000. Interest is at 10%. Assume the machine purchase would be paid for on the first day of year one, but that all other cash flows occur at the end of the year. Ignore income tax considerations.
What is the net present value of the cash flows?
Business
1 answer:
andre [41]3 years ago
4 0

Answer:

$1,747

Explanation:

Given:

Generate Cash flows = $20,000 per year

Salvage value = $10,000

Interest = 10% = 0.10

Computation:

Net present value = PV of cash inflows - PV of cash outflow

= [($20,000 X 6.1446) + ($10,000 X 0.3855)] - $125,000

= [$122,892 + 3855] - $125,000

= $1,747

PV factor (for salvage value)

(1+r)^{-n}\\(1+0.10)^{-10}\\0.3855

Inflow PV factor = 6.1446

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Answer:

The correct answer is C

Explanation:

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It requires the firms to install the anti pollution equipment and then increase the costs by reducing the output. It is successful in cleaning and protecting the US environment.

5 0
3 years ago
For each of the following characteristics, check which types of firm it describes: a monopoly firm, a monopolistically competiti
kobusy [5.1K]

Answer:

1. Faces a downward-sloping demand curve  

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  • ONLY MONOPOLIES

3. Faces the entry of new firms selling similar products  

  • NEITHER, SINCE MONOPOLISTICALLY COMPETITIVE FIRMS OFFER DIFFERENTIATED PRODUCTS, NEW COMPETITORS WILL NOT OFFER SIMILAR PRODUCTS. MONOPOLIES HAVE THE ADVANTAGE OF BARRIER ENTRIES THAT PREVENT NEW FIRMS FORM ENTERING THE MARKET.

4. Earns economic profit in the long run  

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5. Equates marginal revenue and marginal cost  

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3 0
3 years ago
Business behavior is derived in large part from the basic cultural environment in which the business operates and, as such, is s
solong [7]

Answer:

TRUE

Explanation:

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When business ignore cultural factors they are guilty of ethnocentrism and could be orchestrating business failure.

7 0
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Ivy orally agrees to buy a unique collection of sports memorabilia for $10,000 from Jess and sends $2,500 as an initial payment.
kow [346]

Answer:

D. specific performance.

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Specific performance -

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This is basically used to solve any issue related to land , property or any goods or services , this practice is used in case of any personal service .

It helps the people to against any form of injustice or malpractice .

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6 0
3 years ago
Karley's setting aside $32,000 each quarter, starting today, for the next three years for an expansion project. How much money w
Mashutka [201]

Answer:

Final Value= $414,135.43

Explanation:

Giving the following information:

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To calculate the final value, we need to use the following formula:

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8 0
3 years ago
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