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sasho [114]
3 years ago
5

Chandler Tire Co. is trying to decide which one of two projects it should accept. Both projects have the same start-up costs. Pr

oject 1 will produce annual cash flows of $52,000 a year for six years. Project 2 will produce cash flows of $48,000 a year for eight years. The company requires a 15 percent rate of return. Which project should the company select and why?

Business
1 answer:
mojhsa [17]3 years ago
6 0

Answer:

The second project should be chosen. Because the present value of the second project is greater than that of the first project.

Explanation:

The project that should be chosen can be determined by comparing the present value of both projects.

Present value is the cash flows from a project discounted at the discount rate.

Present value can be found using a financial calculator;

For project 1,

Cash flow each year from year one to six is  $52,000

Discount rate = 15%

Present value =$196,793.10

For project 2,

Cash flow each year from year one to eight is  $48,000

Discount rate = 15%

Present value =$215,391.43

The second project would be chosen because its present value is greater than that of the first project.

I hope my answer helps you

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Vaccinations are an example of which role of government?
Mice21 [21]

Answer:

B

Explanation:

You have to pay for a vaccination, and people want and sometimes need the vaccine. The taxes the hospital pays are from the public indirectly. Therefore, vaccinations are sources of the public good.

8 0
2 years ago
The business owner used $25000 from their personal savings account to but common stock in their company. what would be the journ
irina1246 [14]

The accounting entry is to Credit Cash for 25000 and Debit Common Stock for 25,000

<h3 /><h3>What is journal entry?</h3>

Journal entry shows how a business financial transactions are being recorded.

Typically, when cash is withdrawn from a business or personal account, the accounting entry is to credit the cash account.

Hence, the accounting entry is to Credit Cash for 25,000 and Debit Common Stock for 25.000.

Learn more about journal entry here : brainly.com/question/14279491

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7 0
2 years ago
Suppose executives at an art museum know that 100 adults are willing to pay $12 for admission to the museum on a weekday. Suppos
Hitman42 [59]

Answer:

If the museum engages in price discrimination and decides to take both "contracts" (adults and students), the profit the museum will earn is $800.

And it goes like this:

Adults: 100 x $12 = 1.200

Students: 200 x $8 = 1.600

Income: 1.200 + 1.600 = 2.800 total incomes if both contracts happens in the same day.

Profit: 2.800 (Income) - 2.000 (costs) = 800 profit

3 0
3 years ago
The calculated cost of trade credit for a firm that buys on terms of 2/10, net 30, is lower (other things held constant) if the
ANTONII [103]

Answer:

A. True

Explanation:

The terms of 2/10, net 30 implies that the firm is entitled to receive a 2 percent discount if it makes payment within 10 days for the goods it bought on term but the seller expects to pay full amount of the amount due in 30 days if it fails to pay within 10 days.

However, since there will be no more discount after the discount period, the cost of trade credit will continue to fall longer the payment is extended. For this question this can be demonstrated using the formula for calculating the cost of trade discount as follows:

Cost of trade discount = {[1 + (discount rate / (1 - discount rate))]^(365/days after discount)} - 1 ................... (1)

We can now applying equation (1) as follows:

<u>For payment in 40 days </u>

Cost of trade credit (payment in 40 days)= {[1 + (0.02 / (1 - 0.02))]^(365/40)} - 1 = 0.202436246672765, or 20%

<u>For payment in 30 days </u>

Cost of trade credit (payment in 30 days) = {[1 + (0.02 / (1 - 0.02))]^(365/30)} - 1 = 0.278643315029666, or 28%

<u></u>

<u>Conclusion</u>

Since the 20% calculated cost of trade credit for payment in 40 days is lower than 28% calculated cost of trade credit for payment in 30 days, the <u>correct option is A. True</u>. That is, the calculated cost of trade credit for a firm that buys on terms of 2/10, net 30, is lower (other things held constant) if the firm plans to pay in 40 days than in 30 days.

4 0
3 years ago
Catarina, the founder of Platter Place, believes in employee empowerment, so as soon as she began hiring managers, she made subo
garik1379 [7]

<u>Answer:</u> Option A

<u>Explanation:</u>

As the founder of the Platter place believes in employee empowerment it is important for the founder to identify the reason for less efficiency and results. The best option that the HR manager and she could take are use the feedback given by the subordinates to find ways for employee development.

The identity of the feedback of the manager should not be opened up to the manager as it would create decrease in performance ratings of the subordinates  and also conflicts arise between the employees.

8 0
4 years ago
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