1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
kolezko [41]
3 years ago
8

A lottery winner can take $6 million now or be paid $600,000 at the end of each of the next 16 years. The winner calculates the

internal rate of return (IRR) of taking the money at the end of each year and, estimating that the discount rate across this period will be 4%, decides to take the money at the end of each year. Was her decision correct
Business
2 answers:
Semmy [17]3 years ago
5 0

Answer:

Yes, her decision was correct because of Net present value rule.

Explanation:

the net present value (NPV) applies to a series of cash flows occurring at different times.

The present value of a cash flow depends on the interval of time between now and the cash flow. It also depends on the discount rate. NPV accounts for the time value of money. It provides a method for evaluating and comparing capital projects or financial products with cash flows spread over time, as in loans, investments, payouts from insurance contracts plus many other applications.

Time value of money dictates that time affects the value of cash flows.

harkovskaia [24]3 years ago
5 0

Answer:

She was correct, the IRR for the cash flow is 6.15% compared to the 4% discount rate.

Explanation:

The two basic ways to decide whether a project is feasible or not are the net present value (NPV) and the internal rate of return (IRR).

The net present value is the prime test that you must always use first. But in this case, you do not need to calculate it because the IRR is higher than the discount rate. The IRR is the discount rate at which the NPV will equal 0. So an IRR higher than the discount rate will always yield a positive NPV.

Projects are considered feasible when the NPV ≥ 0, and if you have to choose between two or more mutually exclusive projects and both have positive NPVs, you should choose the project with the highest IRR (or MIRR if you really like math).

Since I like math, the NPV = $991,377, and you need more information to calculate MIRR.

You might be interested in
Which relationship might suggest a heightened risk of fraud in the acquisition and payment cycle? a. Unexpected increases in the
masha68 [24]

Answer:

The correct answer is letter "A": Unexpected increases in the number of suppliers.

Explanation:

Frauds or money cleansing usually requires the help of a network of different business interconnected to clear the illegal funds with the excuse of having made commercial activities that never took place. In most cases, accounting documents are faked so that the proceeds of the questionable funds may seem as legal as possible.

In that case, if a company counts with more suppliers and fraud is taking place in the organization, <em>they will have the excuse of making more payments so more funds can go out of the company</em>.

7 0
3 years ago
Which of the following functions of money enables society to gain the benefits of geographic and labor specialization? store of
grandymaker [24]

Answer:

The correct answer is: medium of exchange.

Explanation:

The medium of exchange function of money that helps the society in gaining the benefits of geographic and labor specialization.  

The medium of exchange function means that money is an asset that is widely accepted as a medium of exchange in the transactions involving the exchange of goods and services.  

The medium of exchange function of money eliminates the need for double coincidence of wants. Thus helps in labor and geographic specialization.

4 0
3 years ago
When marketers use a variety of communication disciplines-advertising, personal selling, sales promotion, public relations, dire
BARSIC [14]

<u>Answer:</u>

<em>It is referred to as </em><u><em>Integrated marketing communications  </em></u>

<u></u>

<u>Explanation:</u>

IMC speaks to the advancement P of the "four Ps". It envelops an assortment of correspondence disciplines publicizing, personal selling, deals advancement, advertising, direct showcasing, and web-based promoting, including web-based life in the mix to give transparency, consistency, and most extreme open effect.

IMC folds correspondences over clients and causes them to travel through the different phases of the purchasing procedure. The association combines its picture, builds up an exchange, and supports its association with customers.

3 0
3 years ago
Craigmont company's direct materials costs are $4,900,000, its direct labor costs total $8,710,000, and its factory overhead cos
goldenfox [79]

Craigmont company's direct materials costs are $4,900,000, its direct labor costs total $8,710,000, and its factory overhead costs total $6,710,000. its prime costs total:_Prime Cost = direct material cost + Direct Labor cost

= $ 4900000 + $ 8710000

= $ 13610000

A high price is the entire direct price of production, such as uncooked materials and exertions. indirect charges, along with utilities, supervisor salaries, and delivery costs, are not blanketed in top charges. corporations want to calculate the prime value of each product manufactured to ensure they are generating earnings.

Industry averages propose top charges need to be between fifty five% and 60%. Years in the past, that range might have been as high as sixty five%. however as the costs of a lease, coverage, and items have risen, it is grown to be extra vital to hold that percent quite tight within that variety.

Learn more about prime cost here:

brainly.com/question/26058632

#SPJ4

7 0
2 years ago
The predetermined overhead rate is based on the relationship between _____.
Maslowich

Answer:

(A) estimated annual costs and expected annual activity

Explanation:

The formula to compute the predetermined overhead rate is shown below:

Predetermined overhead rate = (Total estimated manufacturing overhead) ÷ (estimated direct labor-hours or estimated machine hours)

It is always calculated on the estimated amount and estimated annual activity i.e direct labor hours or machine hours

So the correct option is a.

7 0
3 years ago
Other questions:
  • You live in a town with 300 adults and 200 children, and you are thinking about putting on a play to entertain your neighbors an
    9·1 answer
  • We run a delivery service, and we believe our firm has market risk equally between that of UPS and FedEx. We know the following
    11·1 answer
  • Iscovered that her boss was falsifying reports to the epa about the release of harmful chemicals into the​ community's water sup
    11·1 answer
  • What was the purpose of the movie duck and cover ​
    13·2 answers
  • Compared to countries with less economic freedom, countries with more economic freedom achieve higher per person income levels,
    15·1 answer
  • Research conducted by Harvard Business School found that the traditional 4 Ps model:
    14·1 answer
  • Total weekly salaries expense for all employees is $10,000. This amount is paid at the end of the day on Friday of each five-day
    11·1 answer
  • How can expansionary and contractionary tax policies be used to manage the economy? Be sure to give your answer in two to three
    7·2 answers
  • Which type of externality is likely to result from a consumer's decision to purchase a solar-powered vehicle instead of a gas-po
    8·1 answer
  • this is the percentage of each dollar of income, on average, that is spent for current needs and wants, rather than saved.
    6·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!