Answer:
Initial Investment, P = $100, 000
Recurring Cost, A=$6200
(a) Calculate the internal rate of return for infinite life,
A= P(i)
6200=100000(i)
i = 6200/100000
i =6.2%
(b) Calculate the internal rate of return for 100 years,
P = A(P/A, i, 100)
100000 = 6200 (P/A, i, 100)
(P/A, i, 100) = 16.129
For i = 6%
(P/A,6%,100) = 16.618
For i = 7%
(P/A ,7%,100) = 14.269
i = [(6 - 7) / (16.618 - 14.269)] (16.129 - 16.618) +6
i = 6.2%
Thus, IRR = 6.2%
(c) Calculate the internal rate of return for 50 years,
P = A(P/A ,i , 50)
100000 = 6200 (P/A, i, 50)
(P/A, i, 50) = 16.129
For i = 6%
(P/A, 6%, 100) = 15.762
For i = 5%
(P/A , 5%, 100) = 18.256
i = [(5 - 6) / (18.256 - 15.762)] (16.129-15.762) + 6
i = 5.853%
Thus, IRR = 5.853%
(d)
In all cases internal rate of return is greater than 4%, which is minimum interest rate that one can earn. So they should consider to install the pipeline.
Answer:
10
Explanation:
I believe it's 10 let me know if its correct.
Answer:
b) The machine
Explanation:
The most cost-effective option will be the less expensive option.
The cost of the machine is $2,600
The cost of the painters will
The cost per hour for six painters is $23
The cost for 160 hours will be
=$23 x 160
=$3,680
The machine is more cost-efficient
The total amount of the dividends that Mr. James Hayes will receive in one year is $1785 total dividend.
The formula to get the total dividend is simply multiply the shares by stock issue per share. In this question we have 510 shares and stock issue pay $3.50 per share.
$3.50 per share * 510 shares = $1785 Total dividends
Answer:
a. greater than average total cost.
Explanation:
<u><em>Average total cost</em></u> is the cost of a unit output of goods that is being produced. Total Cost is the addition of all the cost of production which include total fixed cost and the total variable cost. Average Total cost is equal to total cost divided by total number of output.
<u><em>Marginal Cost</em></u> This is the change in the opportunity cost when an additional unit is added for production,<em> it is the cost of producing one additional unit of goods.</em>
Therefore, when the average cost of production is increasing, the marginal cost is greater than average cost, and when the average cost is decreasing the marginal cost is less than average cost. Also when the average cost is neither increasing nor decreasing, the marginal cost will be equal to average cost.
