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Travka [436]
3 years ago
8

SAP Inc. received a $1.5 million grant under its Small Business Innovation program. SAP invested the grant money and developed a

system to remove metal contaminants from storm water in shipyards. The firm estimates that each shipyard spends $500,000 a year on storm water clean-up efforts. If SAP is able to sign up and retain four shipyards in the first year onwards, what is the present value (PV) of the project (net of investment) if the cost of capital for SAP is 14% per year? Assume a cost of operations and other costs for SAP equal 50% of revenue.A) $4.80 million
B) $5.64 million
C) $4.51 millionD) $5.93 million
Business
1 answer:
MrRa [10]3 years ago
7 0

Answer:

B) $5.64 million

Explanation:

SAP inc can receive $500,000/ shipyard and 4 shipyards a year yields gross cash flows of  500*4 = $2,000,000. Half of these are costs that give us a Net cash flow of $1,000,000/ year.

Since there is no maturity of the project we calculate present value of cash flow with the following formula

PV of cash flow = 1,000,000/0.14 = $7.14 million rounded off

NPV = 7.14-1.5 = 5.64 million

Hope that helps.

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3 years ago
Economic efficiency is
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6 0
2 years ago
What are some of the key environmental forces that have changed the way projects are managed? What has been the effect of these
Evgesh-ka [11]

Answer: The answer is given below

Explanation:

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Some environmental forces which have

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• What has been the effect of these forces on the management of projects?

The effect of these forces on the management projects is that it resulted in more projects for every organization, it also resulted in changing structures of organization, accountability, the need for rapid completion of projects, the linking of projects to the strategies of the organization and the alliance with the external organizations.

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3 0
3 years ago
In the month of April, a department had 600 units in the beginning work in process inventory that were 60% complete. These units
Eduardwww [97]

Answer:

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<em><u>Materials equivalent units:</u></em>

Materials are addedirely at the beginning of the process thus, all are at 100%

transferred out - beginning x percentage of completion + ending x % completion

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<u><em>Conversion equivalent units</em></u>

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20,000 - 600 x 60% + 2,000 x 20%

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7 0
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