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nalin [4]
3 years ago
5

Suppose a riskless project requires an initial investment of $10 and will generate a one-time cash inflow of $30 two years later

. Assuming a risk-free interest rate of 5%, which of the following statements about the project is NOT true?
A. The net present value of the project is positive.B. The IRR is greater than 50 percent.C. The accounting rate of return on the project is positive.D. The payback period is less than 2 years.
Business
1 answer:
Evgesh-ka [11]3 years ago
7 0

Answer:

D. The payback period is less than 2 years.

Explanation:

Discount rate                 5%  

                                        0      1          2

intital investment        -10  

cash flow                       0        30

Total cash flow         -10      0        30

NPV                        17.21  

IRR                                 73%  

Therefore, The NPV is 17.21 and is positive, the statement is True.

IRR > 50%, Therefore the statement made is True

Accounting rate of return = {[(30 - 10)/10]^(1/2)} - 1

                                           = 41% > 0

Therefore, The statement made is true.

Payback period = 2 years, Therefore the statement made is NOT true.

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A day care program frequently has a few parents picking up their children late. In an attempt to curb this, the daycare decides
alexandr1967 [171]

Answer:

4) All of the above

Explanation:

The day care program should have rewardedbeing on time to encourage this attitude.

Instead they put a price on being late. As parent considers this price cheap they arrive later to have some extra time beofre picking their childrens

Either the day care program reconsiders the fine policy and moves into a better program to estimulate being on time or it increases the "price" so is more expensive for the parents to come in time rather than paiying their fines.

5 0
4 years ago
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People are willing to pay a higher price if they believe that supplies are ______.
ratelena [41]
C. Limited

If you have a small amount of product/resources that means that it is rare, and therefore more valuable.

For example, in the U.S. economy, there is a limited amount of currency, and that is what makes the currency valuable.

Or the better example, in a game like Minecraft, the resource "diamond ore," is only worth value to the player because it is a Limited resource, and it does not spawn often.

Hope this helps!
4 0
3 years ago
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Price discrimination is possible when a firm is able to​ ______.
irina1246 [14]

Answer:

d. identify and separate different types of​ buyers, and sell a product that cannot be resold

Explanation:

Segmenting the market into different groups is a way to charge varying prices. Each group has their own demand curve.

4 0
3 years ago
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Company ABC makes kitchen appliances that have many features in great demand by professional chefs whose only interest is in the
weeeeeb [17]

Answer:

d. quality.

Explanation:

-Delivery area refers to the places in which the appliances can be delivered.

-Quantity refers to the amount of appliances that the company can produce and sell.

-Price refers to the amount of money that customers would pay for the appliances.

-Quality refers to the degree in which the appliances can meet the customer's requirements.

According to this, the answer is that based on its customers, ABC should try to dominate the market in quality because its products meet the expectations of professional chefs and that should be market to focus on as the company can have an important advantage by providing exactly what they need.

The other options are not right because professional chefs are interested on what they can do with this appliances and not on price, quantity or delievery area.

6 0
3 years ago
Martin transfers real estate with an adjusted basis of $260,000 and fair market value of $350,000 to a newly formed corporation
katrin [286]

Answer:

$40,000

Explanation:

We can calculate recognized gain on the transfer and basis for his stock just by deducting adjusted basis value from liability on the transfered real estate.

Calcuation

iability on the transfered real estate        $300,000

less: adjusted basis value                       ($260,000)

Gain recognized                                        $40,000

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3 years ago
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