1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Marat540 [252]
3 years ago
13

An investor is deciding between two projects, both of which have an initial cost of £5,000. One project will return £10,000 in t

hree years with a 5% discount rate and the other project will return £9,500 in two years with a 3% discount rate. The investor determines the first project is worth £8,638 today, whereas the second project is worth £8,955 today, and he determines to invest in the second project. In deciding between the projects, the investor is most likely using the:
Business
1 answer:
snow_lady [41]3 years ago
5 0

Answer:

The answer is: The net present value of the investments

Explanation:

The net present value calculates the current monetary value of a project's future cash flows, using a discount rate. You must remember that $1 today is worth more $1 in the future.

When deciding what projects should be financed, an investor will always look for projects with a NPV ≥ 0, and if he has to decide between two projects, the he will probably choose the project with the highest NPV.

The easiest way to calculate the net present value is to use an excel spreadsheet and the NPV function:

=NPV(rate,value 1, value 2,... value n)

You might be interested in
Carla is not wealthy but attends a school in the wealthy part of her city. She works at a grocery store after school. Other girl
erica [24]

Form

Explanation:

form because it talks how she needs designer clothes to fit in in its form.handles her clothing

5 0
3 years ago
On January 1, 2016, Hackman Corporation issued $1,400,000 face value 12% bonds dated January 1, 2016, for $1,423,060. The bonds
krok68 [10]

Answer:

(a) Bond issuance:

Debit Cash                                                           $1,423,060

Credit Bonds payable                                         $1,400,000

Credit Premium on bond payable                          $23,060

<em>(To record bond issuance)</em>

(b) June 20 interest payment

Debit Interest expense (balancing figure)              $81,694

Debit Premium on bond payable                             $2,306

Credit Cash                                                             $84,000

<em>(To record first interest payment - June 30)</em>

(c) December 31  interest payment

Debit Interest expense (balancing figure)             $81,694

Debit Premium on bond payable                           $2,306

Credit Cash                                                            $84,000

<em>(To record first interest payment - December 31 )</em>

Explanation:

A bond is a long-term promissory note issued by a company in order to borrow from investors to fund its business operations.

Calculation of the interest expense:

Premium on bonds payable (balancing figure) = $23,060

Number of periods = 5 years x 2 = 10 periods

Amortization of premium on bond payable = $23,060 / 10 periods = $2,306

Calculation of the cash proceed:

Cash = Face value of bond x contractual interest x Time period

Cash = $1,400,000 x 12% x 6 / 12 = $84,000 (see the journals above)

4 0
3 years ago
Which of the following people is considered to be in the labor force? Select all that apply: Gina is a stay-at-home mom and volu
Fudgin [204]

Answer:3

Explanation:

niot sure

4 0
3 years ago
After a tax is imposed on the market for bottled water, the price buyers pay is $2.50 per bottle and the price sellers receive i
N76 [4]

The balance of the price in the market is determined by demand and supply, which are measured in terms of the price and quantity variables; When a tax is placed on a product, a change in the market equilibrium is generated, since buyers pay more and sellers receive less.

Thus, a tax causes the supply curve to move up and the demand curve to move down.

In order to know how the tax burden is distributed, the incidence is measured through the elasticity of the supply and demand curve, which measures the sensitivity of the quantity, demanded or offered, of products before a price change.

When the supply curve is more elastic than the demand curve, the impact of the tax is stronger for consumers, as the prices paid by consumers increase more than the price that sellers receive decreases.

Answer

It can be concluded about the elasticity of demand and supply prices that <em>supply is more elastic than demand</em>

3 0
3 years ago
A point outside the production possibilities curve represents a combination of goods that is
pochemuha

Answer:

A production combination outside of the PPF is unattainable by the economy with the given resources and technology.

This represents the Concept of scarcity in economics.

If the economy wishes to achieve the production point outside the frontier, they will have to enhance the production possibility capacity by introducing new technology or finding new resources.

Explanation:

4 0
3 years ago
Other questions:
  • EcoFabrics has budgeted overhead costs of $945,000. It has allocated overhead on a plantwide basis to its two products (wool and
    8·1 answer
  • When compared to a mixed-market economy, a command economy typically has
    13·2 answers
  • Suppose the U.S. Treasury announces plans to issue $50 billion of new bonds. Assuming the announcement was not expected, what ef
    6·1 answer
  • You have a choice among three options. Option 1: receive $900 immediately. Option 2: receive $1,200 one year from now. Option 3:
    14·1 answer
  • The unemployment rate _________.
    5·1 answer
  • In a duopoly, if one firm increases its price, then the other firm can Group of answer choices keep its price constant and thus
    11·1 answer
  • Donna and Matthew share an office. Donna was balancing her checkbook when she was called
    6·2 answers
  • To force the value of the British pound to depreciate against the dollar, the Federal Reserve should: Group of answer choices se
    14·1 answer
  • How do you poop it out
    6·2 answers
  • A mature client wants to liquidate his assets and start enjoying what he has earned. He comments that he just wants to pay regul
    14·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!