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lesya692 [45]
3 years ago
11

Giant Equipment Ltd. Is considering two projects to invest next year. Both projects have the same start-up costs. Project A will

produce annual cash flows of $42,000 at the beginning of each year for eight years. Project B will produce cash flows of $48,000 at the end of each year for seven years. The company requires a 12% return. Required: a) Which project should the company select and why? (5 marks) b) Which project should the company select if the interest rate is 14% at the cash flows in Project B is also at the beginning of each year? (5 marks)
Business
1 answer:
klemol [59]3 years ago
7 0

Answer: A.) Project A, because it has a higher present value than project B.

B.) Project B

Explanation:

Particulars --------- project A ----------- project B

Annual cash flow -- 42000 ------------ 48000

Interest rate --------- 12% ----------------- 12%

Number of years ---- 8 -------------------- 7

Calculating the present value of both projects using a financial calculator :

At 12% rate of return :

PV of project A = $233,677.77

PV of project B = $219,060.31

B.) At 14% rate of return:

PV of project A = $222,108.80

PV of project B = $234,656.04

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Evgesh-ka [11]
The best answer to the question above would be letter b. surplus. If a nation exports more than it imports, it has a trade surplus. A trade surplus is when the nation has too many goods and they have to export it. Importing would be a bad decision since more goods are added to the economy.
5 0
3 years ago
Suppose you observe the following situation: Security Beta Expected Return A 1.16 .1137 B .92 .0984 Assume these securities are
lyudmila [28]

Answer: 10.35%

Explanation:

The Capital Asset Pricing Model is used to calculate the expected return of a security with the expression

Expected return = Risk free rate + Beta ( Market return - risk free rate)

( Market return - risk free rate) is also known as the market premium and can be calculated by;

= \frac{Expected return on A - Expected return on B}{Beta for A - Beta for B}

= \frac{0.1137 - 0.0934}{1.16 - 0.92}

= 0.0153/0.24

= 6.375%

= 6.38%

Expected return A = Risk free rate + Beta A ( Market return - risk free rate)

0.1137 = Risk free rate + 1.16 (6.38%)

Risk free rate = 0.1137 - 1.16(6.38%)

Risk free rate = 3.97%

Market Expected return = Market Risk Premium + risk free rate

= 6.38% + 3.97%

= 10.35%

3 0
2 years ago
What are some strategies employees employed to limit turnover?
yan [13]

Seven main reasons why employees leave a company:


<span>>Employees feel the job or workplace is not what they expected.
>There is a mismatch between the job and person.
>There is too little coaching and feedback.
>There are too few growth and advancement opportunities.
>Employees feel devalued and unrecognized.
>Employees feel stress from overwork and have a work/life imbalance.
<span>>There is a loss of trust and confidence in senior leaders.

Here are some </span></span>Retention Methods:

><span>Training
></span><span>Mentoring
></span><span>Instill a positive culture
></span>Use communication to build credibility<span>
></span>Show appreciation via compensation and benefits<span>
></span>Encourage referrals and recruit from within<span>
></span>Coaching/feedback<span>
></span>Provide growth opportunities<span>
></span>Make employees feel valued<span>
></span><span>Lower stress from overworking and create work/life balance
></span><span>Foster trust and confidence in senior leaders

Hope this helps!</span>
6 0
3 years ago
your average total cost is $40; the price you recieve for the good is 12. Should you keep on producing the good?.
Zepler [3.9K]

Answer:

No, not at all. You should not go for producing that good.

Explanation:

A company do business in order to earn profits. A company earns profits by selling the product, good or service they produce or provide to the consumers. But if the cost of producing the goods is more than the profits earned due to that product, then there is no use of doing business. In order to earn profits, the cost of the product produced must be less than the price of that product. The price of the product should be set at a level which can cover all the costs incurred to produce that product. So in this question, if the price is $12 and cost is $40, then there is no need to product that product any more because this product is only incurring loss to the company.

7 0
2 years ago
BRAINLIST NEED HELP ASAP
Alexxandr [17]

Answer:

  • United Nations Conference on Trade and Development
  • World Bank
  • Bank for International Settlements
  • Organization for Economic Cooperation and Development

Explanation:

Hope this helps!

7 0
3 years ago
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