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sweet-ann [11.9K]
3 years ago
15

Projects S and L both have normal cash flows, and the projects have the same risk, hence both are evaluated with the same WACC,

10%. However, S has a higher IRR than L. Which of the following statements is CORRECT?
A. Project S must have a higher NPV than Project L.
B. If Project S has a positive NPV, Project L must also have a positive NPV.
C. If the WACC falls, each project's IRR will increase.
D. If the WACC increases, each project's IRR will decrease.
E. If Projects S and L have the same NPV at the current WACC, 10%, then Project L, the one with the lower IRR, would have a higher NPV if the WACC used to evaluate the projects declined.
Business
1 answer:
kirill115 [55]3 years ago
6 0

Answer:

E. If Projects S and L have the same NPV at the current WACC, 10%, then Project L, the one with the lower IRR, would have a higher NPV if the WACC used to evaluate the projects declined.

Explanation:

Net present value is the present value of after tax cash flows from an investment less the amount invested.

Internal rate of return is the discount rate that equates the after tax cash flows from an investment to the amount invested

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Suppose that during the past year, the price of a laptop computer rose from $2,750 to $2,880. During the same time period, consu
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Answer: Elasticity of demand is 7.06

Explanation:

P1= $2,750

P2=$2,880

Q1=446,000

Q2=321,000

Elasticity = \frac{Q2 - Q1}{\frac{Q1 + Q2}{2} } * \frac{\frac{P1 + P2}{2} }{P2 - P1}

Elasticity = \frac{321,000 - 446,000}{\frac{446,000 + 321,000}{2} } * \frac{\frac{2750 + 2880}{2} }{2880 - 2750}

Elasticity = \frac{-125,000}{383,500} * \frac{2815}{130}

Elasticity = - 0.3259*21.6598

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Thus, elasticity of demand for laptops is 7.06. This means that laptops are highly price elastic as it is greater than 1.



8 0
3 years ago
At the beginning of 2020, Concord Company acquired a mine for $3,251,600. Of this amount, $124,000 was ascribed to the land valu
Sav [38]

Answer:

A. $737,520

B. $530,320

Explanation:

a. Computation for the total amount of depletion for 2020.

First step is to calculate the Depletion Rate

Depletion Rate = ($3,251,600 - $124,000 + $49,600 + $210,800)/12,100,000

Depletion Rate= $3,388,000/ 12,100,000

Depletion Rate= 0.28

Now let calculate the total amount of depletion for 2020.

2020 Total amount of depletion= 0.28 × $2,634,000

2020 Total amount of depletion= $737,520

Therefore the total amount of depletion for 2020 is $737,520

B. Computation for the amount that is charged as an expense for 2014 for the cost of the minerals sold during 2020.

Expense amount charged= ($737,520/$2,634,000)* 1,894,000

Expense amount charged=0.28 *1,894,000

Expense amount charged=$530,320

Therefore the amount that is charged as an expense for 2014 for the cost of the minerals sold during 2020 is $530,320

7 0
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the example is Globalization

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3 years ago
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The earliest elections will come effective on January 1, 2016 for case a, b, d anf January 1, 2017 for rest options.

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<span>The function of media advertising is to support the economy, provide information about products, and underwrite media costs associated with: Promotion of consumption
By using media advertising, a company will be able to obtain larger reach to inform potential customers about the existence of their product, which will persuade the potential buyers to spend their saving to consume their products.</span>
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