Answer:
The total present values of cash inflows is $12,057.92
The net present value is $306.48
The IRR is 10%
Explanation:
The total present values was computed by multiplying each of the cash flow by a discount factor ,which is given as 1/(1+r)^n
r is the percent minimum rate of return
n is the relevant year of cash flow
The computation is found in the attached.
The net present is the sum of present of inflows minus cash outflow
The formula for IRR is ,=irr(values) as contained in the excel file attached.
Answer:
c. 600
Explanation:
One pack of diapers requires two pounds of raw material and one hour of direct labor for manufacture. Since Raw material costs $3 per pound and direct production labor is paid $4 per hour.
Therefore the cost of producing one pack of diaper = 2 pounds($3 per pound) + 1 hr($4 per hour) = $6 + $4 = $10
Since Fixed supervisory costs are $2,000 per month and EB rents its factory for $4,000 per month, the total expense for x diapers per month is given as:
Expense = $2000 + $4000 + $10x = $10x + $6000
The revenue generated by selling x diapers per month since one pack is sold at $20 is given as:
Revenue = $20x
At break even, Revenue = Expense
Therefore: $10x + $6000 = $20x
20x - 10x = 6000
10x = 6000
x = 6000/10 = 600
EB would need to sell 600 diapers to break even
Answer:
open an new office because the expected marginal benefit ($12.5 million over 5 years) is greater than the estimated marginal cost ($7 million)
Explanation:
The computation is shown below;
Given that
Total marginal benefit = 12.5 million
And, the Total marginal cost = 7 million
Based on the above information
We can see that the new office should be opened as the marginal benefit would be more than the marginal cost
Therefore the first option is correct
And, the rest of the options would be incorrect
Bacon would cost more since it would cost more to raise a pig
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