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
Sever21 [200]
3 years ago
7

DYI Construction Co. is considering a new inventory system that will cost $750,000. The system is expected to generate positive

cash flows over the next four years in the amounts of $350,000 in year one, $325,000 in year two, $250,000 in year three, and $180,000 in year four. DYI's required rate of return is 8%. What is the net present value of this project?
$87,417

$96,320

$104,089

$183,472
Business
1 answer:
Oksanka [162]3 years ago
6 0

Answer:

Year Cashflow        [email protected]% PV

$                      $

0 (750,000)             1          (750,000)

1        350,000               0.9259    324,065

2       325,000               0.8573     278,623

3        250,000              0.7938      198.450

4        180,000               0.7350      132,300

                                        NPV         184,438

The correct answer is D. The difference in answers is due to rounding error.

Explanation:

Net present value is the diffrence between initial outlay and present value of inflow. We need to discount the cash inflows for year 1 to year 4 at 8% and then calculate the present value of cash inflows by multiplying the cash inflows by the discount factors. Finally, we will calculate NPV by deducting the initial outlay from the present value of cash inflows.

You might be interested in
The pharmaceutical company Merck's new drug Vioxx was a blockbuster, generating revenues of $2.5 billion a year by 2002 and grow
marissa [1.9K]

Merck provides an example of what can happen if a company deviates from its : Core values

<h3>What are core values?</h3>

The core values of an organization are those values we hold, which form the foundation on which we perform work and conduct ourselves.

The core value of a company are those enduring principles that govern it's fundamental conduct towards attainment of it's goals. It is usually a passionate pledge on the principles that the organization stands for.

Hence, Merck provides an example of what can happen if a company deviates from its core values.

Learn more about core values here : brainly.com/question/14595106

6 0
2 years ago
Souza Inc, which produces and sells a single product, has provided its contribution format income statement for October. Sales (
Kipish [7]

Answer:

Net operating income is $300

Explanation:

We know that,

The net operating income = Sales - variable cost - fixed expenses

And, the contribution margin = Sales - variable cost

So, contribution margin - fixed expenses = Net operating income

Since we have to compute the net operating income for 3,500 units So, first we have to compute the contribution margin per unit which is shown below:

= Contribution margin ÷ number of units

= $48,000 ÷ 4,000 units

= $12

Now for 3,500 units, the contribution margin would be

= 3,500 units × $12

= $42,000

So, the net operating income would be

= $42,000 - $41,700

= $300

The fixed expenses would not be changes. It remains constant

5 0
3 years ago
Why do large corporations want to become more like small businesses?
notsponge [240]

Answer:

Many large corporations want to become more like small businesses because they want to make their firm more flexible, resourceful, innovative, and competitive. ... For businesses based off the internet, they are able to adapt to market changes quickly.

3 0
3 years ago
Read 2 more answers
According to the CAPM, what is the market risk premium given an expected return on a security of 15.8%, a stock beta of 1.1, and
Anna35 [415]

Answer:

The risk premium on market is 8%

Explanation:

The CAPM or Capital Asset Pricing Model is used to calculate the required rate of return on a stock which is the minimum return that is expected or required by the investors to invest in a stock based on its systematic risk as measured by the beta of the stock.

The formula to calculate r under the CAPM is,

r = rRF + Beta * rpM

Where,

  • rRF is the risk free rate
  • rpM is the risk premium on market

To calculate the risk premium on market, we will input the available values for r, rRF and beta in the equation above.

0.158 = 0.07 + 1.1 * rpM

0.158 - 0.07 = 1.1 * rpM

0.088 / 1.1 = rpM

rpM = 0.08 or 8%

So, the risk premium on market is 8%

3 0
3 years ago
“For those brave enough to act effectively now to stabilise and protect your business and maintain liquidity, opportunity will c
irakobra [83]

Answer:

Yes it can.

Explanation:

Statement of cash flow is a financial statement that narrates the pattern and the amount of cash and its equivalent that enters and leave the a company and eventually provides the amount of liquid cash the company has . This is important as the net income declared may not necessarily means the available cash due to the impact of some non cash transaction like depreciation and gain on the disposal of assets

During this pandemic period , one recommendation on how companies can maintain liquidity is by negotiating a longer payment cycles with suppliers.As most companies have lost their customers to the pandemic and are looking for ways of retaining and attracting new customers. A company can make use of the opportunity to negotiate for a favorable payment pattern . However , the term must be reasonable  in order to avoid a bad reputation.

5 0
3 years ago
Other questions:
  • Preferences are characterized generally by: A. income. B. consumption bundles. C. indifference curves. D. budget constraints.
    15·1 answer
  • John Fare purchased $6,000 worth of equipment by making a $1000 down payment and promising to pay the remainder of the cost in s
    10·1 answer
  • Surveys indicate that over 60% of all employees under the age of 25 are disengaged and unhappy with their jobs. What might accou
    13·1 answer
  • Al's obtained a discount loan of $68,500 today that requires a repayment of $93,228, 4 years from today. What is the APR
    13·1 answer
  • Which of the following is viewed as the riskiest and most costly form of international expansion? Multiple Choice Joint venture
    14·1 answer
  • The allocatively efficient quantity of product Z for the whole market is 2 million units. At that quantity, the demand for Z is
    5·1 answer
  • Exporting countries primarily agree to voluntary export restraints (VERs) to A) minimize exposure in the importing country. B) r
    13·1 answer
  • The corporate charter of Imp Company authorized the issuance of 10 million, $1 par common shares. During 2021, its first year of
    6·1 answer
  • What are the roles of agriculture is to maximize the production in the agricultural sector ? ​
    8·1 answer
  • The date on which the principal amount is repaid to the bondholder is known as the​ ________.
    5·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!