Answer:
Project C
Explanation:
If we make the decision based on the net present value (NPV) then we will choose the project that has the greatest NPV.
NPV is the sum of the present value of project´s cash flows. To have the present value of a cash flow (inflows and outflows) we use a discount rate and the year of the cash flow (the formula is attached).
When we have al cash flows in present value, we sum them including the investment (which is most of the time negative and it is in present value so we don´t have to transform it). This is the NPV (formula attached).
If the NPV is greater than cero, then the project is creating value, the investors will recover the investment and will have profits. So if the NPV of project is greater than the NPV of another, that project is creating more value.
Answer:
a. $65,000
b. 13.40
Explanation:
a. Present value of cash flow = Cash flow ÷ (Discount rate - Growth rate)
= $8,000 ÷ (0.10 - 0.05)
= $8,000 ÷ 0.05
= $160,000
So, Net present value = present value of cash inflow - cash outflow
= $160,000 - $95,000
= $65,000
b. Value of investment = cash flows ÷ (internal rate of return - growth rate)
= $95,000 = $8,000 ((internal rate of return - 5%)
= Internal rate of return - 0.05 = $8,000 ÷ $95,000
= 0.084 + 0.05
= 13.40
Answer: Countries in the MORE HIERARCHICAL SOCIETIES
Explanation:
There are hierarchical societies in some nations of the world where compliance and almost blind obedience and followership is virtually above everything and everyone. In such countries, obedience is expected of you without asking so many questions. In these countries, asking questions or attempts to have a mind of your own can make you become isolated, despised or rejected if you don't comply or conform to others.
In these hierarchical societies, irrespective of how odd you think the actions of others are, you may generally be seen as a mischief-maker and will be immediately placed at the bottom of the society.
In the case of companies that are situated in these hierarchical societies, self-determination right is never encouraged. They generally believe that people will work for a company for the majority of their lives.
