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earnstyle [38]
3 years ago
7

Ray estimates that the fixed costs associated with opening a new bank branch are $500,000. He expects the branch to attract 1,00

0 new customer accounts in the first year, each of which will cost $50 per year to service. He also expects to generate $100,000 per year in revenue. For Ray, the total cost of opening the new branch and remaining open for one year will be ___________.
a. $605,000b. $500,000.c. $550,000.d. $650,000.e. $450,000.
Business
1 answer:
Vinvika [58]3 years ago
4 0

Answer:

c. $550,000

Explanation:

The total cost of opening the new branch and remaining open for one year will be inclusive of the fixed cost which is the cost of opening the new branch and the cost of providing services in a year. This is a variable expense as the total cost depends on the number of customers served during the year.

Hence the total cost of opening the new branch and remaining open for one year will be

= $500,000 + $50 * 1,000

= $550,000

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Discounted cash flow methods consider the present value of the cash flows after the recovery of the initial investment.
aalyn [17]

to a valuation method

What is valuation method?

Industry professionals typically utilize one of three basic valuation techniques: DCF analysis, similar company analysis, or precedent transactions when assessing a firm as a going concern. The majority of financial sectors, including investment banking, equity research, private equity, corporate development, mergers and acquisitions (M&A), leveraged buyouts (LBO), and corporate development, utilise these valuation techniques. There are three distinct ways or methodologies one can utilize when appraising a company or asset. The Cost Approach considers the price of repairing or replacing an asset. Real estate with specific uses, new construction, or commercial assets can all be valued effectively using the cost approach method. It is not frequently used by financial experts to value a going-concern company.

Learn more about valuation method with the help of given link:-

brainly.com/question/14045279

#SPJ4

8 0
2 years ago
Tracy purchased a car for $19,500. She is financing the purchase at an 11% annual interest rate, compounded monthly for 3 years.
NemiM [27]

Based on the cost of the car and the interest rate, the amount Tracy is to pay is $638.41.

<h3>How much should Tracy pay?</h3>

The cost of the car is the present value of an annuity because Tracy's payment will be constant.

First find the monthly rate:

= 11% / 12 months

= 0.92%

The number of periods:

= 3 x 12 months

= 36 months

Amount to be paid is:

19,500 = Amount x (1 - ( 1 + 0.92%) ⁻³⁶) / 0.92%

Amount = 19,500 / 30.544874328

= $638.41

Find out more on the present value of an annuity at brainly.com/question/25792915.

#SPJ1

5 0
2 years ago
"A client of a sales representative who is based in New York moves to the State of Florida. The sales representative and his bro
Alex Ar [27]

Answer:

Both the sales representative and his broker-dealer must register in the state of Florida in order to legally solicit orders for any client living in that state. The client was originally living in New York, but once he/she moved to Florida, Florida's Uniform State Law requires that the sales representative and the broker dealer register with them. Once they are registered, they can solicit orders for this specific client and any other client that they might have in the state.

5 0
3 years ago
Suppose the economy is in long-run equilibrium at the level of potential output. What will be the long-run effect of an expansio
nirvana33 [79]

Answer:

Higher prices.

Explanation:

Expansionary monetary policy seeks to grow the economy by increasing the money supply, lowering interest rates, and stimulating demand. As we know from the supply/demand curves, higher demand leads to higher price levels.

3 0
3 years ago
I am a rational and risk-averse person, and I have an option of making the following bet: I receive $500 cash, after which I rol
Tamiku [17]

Answer:

I should not accept the bet; the precise level of risk aversion does matter.

Explanation:

Risk averse person is the one who is not willing to take the risk even if he is given high returns. Risk averse person will always avoid the risks. In the given scenario the person is risk averse. If he rolls out the dice he has to pay $200 times the dice number which means he just have two chance (dice rolls 1 or dice rolls 2) for getting return otherwise he will loose the bet and he will have to pay money from the pocket.

4 0
3 years ago
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