Answer:
The correct answer for option (a) 0.98 and 1.04 and for option (b) is Boulder Location.
Explanation:
According to the scenario, computation of the given data are as follows:
A). We can calculate the present value index by using following formula:
Present value index = Total present value of net cash flow ÷ Amount to be invested
Present value index Ft. Collins = 607,600 ÷ 620,000 = 0.98
Present value index Boulder = $624,000 ÷ $600,000 = 1.04
Fort Collins has 0.98 present value index and boulder has 1.04 present value index.
B). Boulder location should be chosen according to the analysis. Because boulder has the 1.04 present value index which is greater than 1 while fort Collins has value less than 1.
Answer:
Opportunity costs are defined as the additional costs or benefits lost from choosing one activity or investment over another alternative. It is a relative concept because you cannot be 100% sure that the other investments or activities would have yielded a specific gain.
For example, when you calculate the economic cost of starting your own business, you consider your current salary as an opportunity cost. But what happens if you get fired (or the company closes), your opportunity cost would have been $0? Or how can you exactly measure your future salaries? Maybe in a couple of years you get promoted to manager, or maybe not?
The same applies to economies, since the opportunity cost of producing certain tradable goods is not always fixed, it might decrease or increase due to productivity or efficiency changes. But in order to calculate or determine we must include the most probable option.
In microeconomics, a strictly convex production possibilities frontier function must include a combination of both goods. In strict convexity, the second derivative f''(x) ˃ 0, so the PFF curve cannot be straight, it must have a slope.
When we calculate the opportunity costs of PPF, we usually try to determine which product has the lowest opportunity cost, but that is not an interior solution because both goods are not being produced (the curve is not strictly convex). On a strictly convex curve, as you approach the extremes the opportunity cost of producing one good is high, but on the center the opportunity cost is much lower.
??????????????? What is the Question?
Answer:
It will take 1 year and 307 days to cover the initial investment.
Explanation:
Giving the following information:
Initial investment= $6,900
Cash flows:
Cf1= $4,200
Cf2= $5,100
Cf3= $6,300
Cf4= $5,500
Discount rate= 15%
<u>The payback period is the time required to cover the initial investment. We need to discount each cash flow.</u>
<u></u>
Year 1= 4,200/1.15 - 6,900= -3,247.83
Year 2= 5,100/1.15^2 - 3,247.83= 608.50
<u>To be more accurate:</u>
(3,247.83 / 3,856.33)*365= 307 days
It will take 1 year and 307 days to cover the initial investment.
Answer:
a. $2,020 Favorable
Explanation:
The computation of spending variance for direct materials in April is shown below:-
For computing the spending variance for direct materials in April first we need to find out the actual price per unit which is here below:-
Actual price per unit = Actual direct material ÷ Actual units purchased
= $49,086 ÷ $5,060
= $9.70
Spending variance for direct materials in April = (Actual price per unit - Standard price per unit) × Actual quantity
= ($9.70 - $10.10) × 5,060
= -$0.4 × 5,060
= $2,024 Favorable
which is closest to $2,020 Favorable.
