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
mariarad [96]
3 years ago
9

Harte Systems, Inc., a maker of electronic surveillance equipment, is considering selling to a well-known hardware chain the rig

hts to market its home security system. The proposed deal calls for the hardware chain to pay Harte $30,000 and $25,000 at the end of years 1 and 2 and to make annual year- end payments of $15,000 in years 3 through 9. A final payment to Harte of $10,000 would be due at the end of year 10.
a. Lay out the cash flows involved in the offer on a time lin


b. If Harte applies a required rate of return of 12% to them, what is the present value of this series of payments?


c. A second company has offered Harte an immediate one-time payment of $100,000 for the rights to market the home security system. Which offer should harte accept?
Business
1 answer:
Taya2010 [7]3 years ago
4 0

Answer:

Instructions are listed below.

Explanation:

Giving the following information:

The proposed deal calls for the hardware chain to pay Harte $30,000 and $25,000 at the end of years 1 and 2 and to make an annual year-end payments of $15,000 in years 3 through 9. The final payment to Harte of $10,000 would be due at the end of year 10.

1)

Cash flows:

Year 1= 30,000

Year 2= 25,000

Year 3= 15,000

Year 4= 15,000

Year 5= 15,000

Year 6= 15,000

Year 7= 15,000

Year 8= 15,000

Year 9= 15,000

Year 10= 10,000

2) To calculate the present value we need to use the following formula for each cash flow:

PV= FV/(1+i)^n

Year 1= 30,000/1.12= 26,785.71

Year 2= 25,000/1.12= 22,321.43

Year 3= 15,000/1.12= 13,392.86

....

Year 10= 10,000/1.12^10= 3,219.73

PV= $104,508.27

3) The present value of cash inflows is higher than $100,000. It is more convenient to decline the $100,000.

You might be interested in
Which of the following best describes vertical integration? A. sell products to a supplier or a distributor B. develop the abili
jasenka [17]

Answer: B

Explanation:

A vertical integration is where a company owns another company in the same production line.

For example a company that bakes bread has a farm where wheat is cultivated, a marketing company and retail locations for the sale of the bread.

The advantages of Vertical integration include:

a. It reduces costs.

b. It increases efficiency.

c. It gives the firm greater control of the production process.

A major disadvantage of vertical integration is it requires huge capital outlay.

7 0
3 years ago
If a product makes it through a rigorous development process, will it be a sure success?
Otrada [13]
When it comes to this context, nothing is sure to be a success, so no
7 0
3 years ago
Read 2 more answers
Willow Wanderer Cameras Inc. reported the following results for the year ending October 31, 20Y9: Retained earnings, November 1,
ANTONII [103]

Answer:

The statement would be:

Date: October 31, 2019

Net Income                $680,700

Cash dividends           $50,000

Stock dividends         $127,000

Retained earnings     $503,700

The retained earnings are equal to the sum of declared dividends substracted  from the net income.

3 0
3 years ago
Question 7 of 10
zzz [600]

Answer:

The answer is B..........

8 0
2 years ago
The dollars available from each unit of sales to cover fixe
lbvjy [14]

Answer:

False

Explanation:

Variable costs are part of direct expenses incurred in the production of goods meant for sales. Variable costs have a direct and proportionate relationship with the output level. An increase in output level increases variable costs. Examples of variable costs are packaging and raw materials.

The contribution margin is the dollar amount available from the sale of each unit to cater for fixed costs and profits. It is calculated by subtracting variable costs from the selling price. The contribution margin is used in determining the break-even point and the output level required to achieve desired profits.

5 0
3 years ago
Other questions:
  • All insurance companies charge the same rate for a given person. True False
    13·2 answers
  • Wilson is offered a job in Kansas City that pays $50,000 and a job in Dallas that pays $60,000. Which pair of CPIs would ensure
    6·1 answer
  • "according to ted levitt, what is the definition of a product? what satisfactions do customers want?"
    15·1 answer
  • The formula for the cross-price elasticity of demand is percentage change in rev: Multiple Choice quantity demanded of B/percent
    10·1 answer
  • Proposals related to ________ include controlling the ingredients that go into certain products and packaging as well as reducin
    13·1 answer
  • An annual has 15 years to maturity. It has a coupon rate of 5%, a YTM of 8%. Fill in the cells highlighted in yellow, and aswer
    13·1 answer
  • The jackson family is undecided about whether or nara buy a new car of the
    12·1 answer
  • Normally dividend or /and capital gain is reason of investment. Why do you think stockholders of a firm that is performing very
    6·1 answer
  • The Beanny Company had budgeted sales of 1,000 units with a per unit selling price of $5 per unit. Actual sales were 1,100 units
    14·1 answer
  • covid-19 pandemic of 2020, e-tronics began weighing options for controlling or cutting costs due to lower revenue and profitabil
    6·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!