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egoroff_w [7]
3 years ago
14

Which one of the following methods of analysis is most appropriate to use when two investments are mutually exclusive?Internal r

ate of returnProfitability indexNet present valueModified internal rate of returnAverage accounting return
Business
1 answer:
ozzi3 years ago
4 0

Hello there!

Answer:

Your answer would be "Net present value"

Explanation:

The reason why "Net present value" would be the correct answer is because this is the method that is specifically used when two investments are mutually exclusive. What "mutually exclusive" means is that something can't occur, or happen, at the same time. What this sentence is saying is that two investments can't happen at the same time. A "Net present value" is the value of the money that is currently present, while being contrasted into future value when it is invested in, specifically in compound interest. What people would use "Net present value" for when two investments are mutually exclusive is to see how much value the different investments will bring, and see which investment they would want to choose first, specifically for profit wise. This is the reason why net present value would be correct.

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In the aftermath of a hurricane, an entrepreneur buys generators at $530 each from a store in an area unaffected by the hurrican
lesantik [10]

Answer:

A shift in the demand curve will create a new equilibrium point.

Those who voluntarily purchase the generators believe them to be worth the marked-up price.

The effect of price ceilings is to make behavior like the entrepreneur’s illegal.

Explanation:

As after hurricane there is a necessity to buy the generators, accordingly the demand for the generators increase and so does the price, therefore, there is a new equilibrium.

And as there is need, people voluntarily buying it would definitely feel it worth to spend and pay such exaggerated price.

If there will be price ceilings then the entrepreneur will try to sell the generators at high prices illegally because he need to get the margin.

Although there will be no surplus even in case of price ceilings as it is a need people will buy and the stock will be sold at last.

3 0
3 years ago
T-shirts sell for $2 and shorts sell for $4. in april, total sales were $600. how many shorts did dots sell in april?
mario62 [17]
First thing first your supposed to find out how many days are in April then since you have that information you have to multiply theme amount of days to 4 and you will get your answer
8 0
3 years ago
The present value, today, of the terminal (perpetuity) value equity cash flow that begins in 7 years is $6,700,000 assuming a co
nignag [31]

Answer:

2.83%

Explanation:

P0 = $6,700,000

Cost of equity Ke = 8%

So, value of this perpetuity 6 years form now is  P6 = P0*(1+Ke)^6

= $6,700,000*(1.08)^6

= $6,700,000*1.58687432294

= $10632057.96

Free cash flow at year 7 (FCF7) = $550,000

So, using constant growth model, g = Ke - FCF7 / P6

g = 0.08 - 550000/10632057.96

g = 0.08 - 0.05173034

g = 0.02826966

g = 2.83%

Thus, the growth rate required for the continuation value (terminal value perpetuity) term is 2.83%.

8 0
2 years ago
A recent Mega Millions estimated jackpot amount is $300 million which is the undiscounted sum of the 26 annuity option payments
I am Lyosha [343]

Answer:

Itis better to take the case in hand of 207,000,000 millions

Explanation:

We need to calcualte the present value of a geometric annuity-due

\frac{1-(1+g)^{n}\times (1+r)^{-n} }{r - g}

g 0.05

r 0.04

C 4,515,432

n 26

n 26

\frac{1-(1+0.05)^{26}\times (1+0.04)^{-26} }{0.04-0.05}

 127,557,727.45

As is an annuity due, we multiply by (1+r)

127,557,727.45 x (1+0.04) = 132,660,036,548

The present value of the 207,000,000 option is better as the annuity present value is around 130,000,000

4 0
3 years ago
Add forty-eight and sixty-three hundredths to fifty-seven hundredths
kvasek [131]
The correct answer would be forty-nine point two
3 0
3 years ago
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