Answer:
1. NPV calculation
Option 1 ( with Greewood fertilizer) : $2.256
Option 2 ( with Peter's Fertilizer) : $3.835
2. Rate of return calculation:
Option 1: 45.12%
Option 2: 95.875%
Option 2 should be chosen as it provides higher NPV.
Explanation:
1. The detailed calculation for each option is:
Option 1: Present value of sales proceed - initial cost = (8/1.05^2) - 5 = $2.256
Option 2: Present value of sales proceed - initial cost = (10/1.05^5) - 4 = $3.835.
2. The detailed calculation for each option is:
Option 1: NPV/Initial cost = 2.256/5= 45.12%
Option 2: NPV/Initial cost =3.835/10 = 95.875%
To assess which option should be picked with the assumption of infinite time horizon, NPV should be key driver. As Option 2 has higher NPV, Option 2 is chosen.
The correct answer for the question that is being presented above is this one: "D. Most politicians do not care about helping the people become more prosperous."
Here are the following choices:
<span>A. Politicians will follow bad economic policies in order to attract votes.
B. Most politicians have a very poor understanding of the principles of economics.
C. Politicians do not care about what is good for their citizens.
D. Most politicians do not care about helping the people become more prosperous.</span>
Answer:
Being debt-free within 15 years is an example of a long-term goal.
Explanation:
One main characteristic of a long-term goal is that it involves a planning horizon that is more than 5 years during which some thoughts are paid to the goal, and the means of achieving it are marshalled out, and rigorously pursued. Long-terms goals are best broken into manageable, short-term, and medium-term goals to enable the decision-maker to accomplish her goal. The future is always uncertain, to achieve a long-term goal you must remain motivated.
The act of providing a loan by the banker to the borrower amounting to $800 after setting aside the reserve amount of $200 contributes to the increase of the money supply by $800.
<h3>What is the money supply?</h3>
The money supply is the amount that a public held at a point in time including currency notes, coins, and the bank account balances.
When the banker is giving the loan to the borrower at $800 then it infuses the money into the economy as this amount is further given as a loan by another bank to another borrower. This whole cycle goes on to continue till the amount reaches zero.
Therefore, the money supply increases by $800 when the banker gives loans to the borrower for the amount of $800.
Learn more about the money supply in the related link:
brainly.com/question/19720553
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When a bank's loans are written off, then the bank's RESERVES SHRINK WHEREAS ITS DEBTS REMAINS THE SAME. Sometimes, due to unpleasant situations, banks are forced to write off loans which they hand lend out to borrowers and which the borrower are unable to repay. This action reduces the amount of money that the bank has in its reserve.
