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3 years ago

If Management was not concerned with the time value of money, from which two capital budgeting methods should they choose?

Business

1 answer:

Neporo4naja [7]3 years ago

7 0

Answer:

ARR or Payback

Explanation:

Here are the options to this question

Multiple Choice

BET or IRR

ARR or Payback

NPV or IRR

NPV or Payback

BET or NPV

Accounting rate of return = Average net income / Average book value

Average book value = (cost of equipment - salvage value) / 2

Payback calculates the amount of time it takes to recover the amount invested in a project from it cumulative cash flows

Payback period = Amount invested / cash flow

The NPV and IRR considers the time value of money by discounting the cash flow at discount rate.

Net present value is the present value of after tax cash flows from an investment less the amount invested.

Internal rate of return is the discount rate that equates the after tax cash flows from an investment to the amount invested

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All Rite Manufacturing reported the following:

Nikitich [7]

I think the answer is c

3 0

3 years ago

Carrie's Car Care receives more than 25% of its total sales revenues from operations outside of the United States. Carrie's woul

Anvisha [2.4K]

Answer:

The answer is: E) None of these.

Explanation:

A foreign national is a person who wasn´t born in the country in which he or she temporarily lives in.

We don´t have enough information to know if Carrie´s Car Care is a wealthy company. Maybe its total sales are just $10,000 a year but they export $2,500.

A multinational corporation usually has branches or subsidiaries. All we know about Carrie´s Car Care is that it makes some money outside the US, but we don´t know how. Maybe they simply export 25% of their products or maybe they are a huge multinational corporation. Not enough information.

The term globalization corporation doesn´t exist. The term corporate globalization refers to very large multinationals that reach all or most of the world´s markets.

6 0

3 years ago

Sean and Jenny own a home in Boulder City, Nevada, near Lake Mead. During the year, they rented the house for 40 days for $3,000

Dmitry_Shevchenko [17]

Answer:

Sean and Jenny

The deductible net loss for the rental of their home is:

= $18,241.

Explanation:

a) Data and Calculations:

Number of days for rent of $3,000 collected = 40 days

Number of personal use of house = 18 days

Total number of days that the house was in use = 58 days

House Expenses:

Mortgage interest $14,000

Property taxes 3,500

Utilities 1,100

Maintenance 1,300

Depreciation 10,900

Total expenses $30,800

Proportion of house expense:

Rental use = $21,241 (40/58 * $30,800) 69%

Personal use = $9,559 (18/58 * $30,800) 31%

Total expense $30,800

The deductible net loss for the rental of their home is $18,241 ($3,000 - $21,241).

8 0

3 years ago

C&K Brewing Company is a microbrewery in western Canada. It produces Maiden’s Honor brand ale, a dark beer called Warrior’s

ehidna [41]

Answer:

The correct answer is letter "A": concurrent .

Explanation:

Concurrent control is adopted to regulate ongoing activities in an organization so that they can meet the company's standards. This type of control is chosen to ensure that the output will have the results expected. It implies measuring the quality of the processes at a certain point in time to determine to continue with them or not.

3 0

3 years ago

A company currently pays a dividend of $2.8 per share (D0 = $2.8). It is estimated that the company's dividend will grow at a ra

Vinil7 [7]

Answer:

Intrinsic value: 53.41 dollars

Explanation:

First, we use the CAPM model to know the value of the stock

$Ke= r_f + \beta (r_m-r_f)$

risk free 0.085

premium market =(market rate - risk free) = 0.045

beta(non diversifiable risk) 1.3

$Ke= 0.085 + 1.3 (0.045)$

Ke 0.14350

Now we need to know the present value of the future dividends:

D0 = 2.8

D1 = D0 x (1+g) = 2.8 * 1.23 = 3.444

D2 3.444 x 1.23 = 4.2361200

The next dividends, which are at perpetuity will we solve using the dividned grow model:

$\frac{divends}{return-growth} = Intrinsic \: Value$

In this case dividends will be:

4.23612 x 1.07 = 4.5326484

return will be how return given by CAPM and g = 7%

plug this into the Dividend grow model.

$\frac{4.5326484}{0.1435 - 0.07} = Intrinsic \: Value$

value of the dividends at perpetity: 61.6686857

FInally is important to note this values are calculate in their current year. We must bring them to present day using the present value of a lump sum:

$\frac{Principal}{(1 + rate)^{time} } = PV$