Answer:
Comment for statement A - The firm must still compare the IRR with the opportunity cost of capital when using the IRR rule. Therefore, even with the IRR method, the appropriate discount rate must still be specified.
Comment for statement B - There should be a higher discount rate on risky cash flows than the rate used to discount less risky cash flows.
Making use of the payback rule is equivalent to using the NPV rule with a zero discount rate for cash flows before the payback period and an infinite discount rate for cash flows thereafter.
Explanation:
a)
“I like the IRR rule. I can use it to rank projects without having to specify a discount rate”
The firm must still compare the IRR with the opportunity cost of capital when using the IRR rule. Therefore, even with the IRR method, the appropriate discount rate must still be specified.
b.
“I like the payback rule. As long as the minimum payback period is short, the rule makes sure that the company takes no borderline projects. That reduces risk”
There should be a higher discount rate on risky cash flows than the rate used to discount less risky cash flows.
Making use of the payback rule is equivalent to using the NPV rule with a zero discount rate for cash flows before the payback period and an infinite discount rate for cash flows thereafter.
Answer:
Mitch is the owner of GameOn, a popular sports bar. He personally trains his servers and then gives them autonomy to make on-the-spot decisions to resolve any customer complaints and issues. This is a form of _____.
a. flexibility
b. assurance
c. empowerment
d. service guarantee
The answer is C. Empowerment
Explanation:
Empowerment is the process of giving authority or power to an individual to carry out an action.
Mitch training and giving his serves autonomy to resolve any customer complaint and issues is a form of empowerment. It goes to show that he has a level of trust in their ability to make decision and respond appropriately to the issues they might face when attending to customers.
They help you find unbiased information about the product’s actual performance.
Answer:
$196,000
Explanation:
The question is to prepare the balance sheet of Bowler Corporation as at the end of 2021.
Balance Sheet is generally divided into Assets side (Non-Current and current) Liabilities (non-current and current) and the Stockholders equity. A good balance sheet should be as follows Asset= Liabilities + Equity
Bowler Corporation Balance Sheet as at 2021
Particulars Amount($) Amount($)
Non-Current Assets
Equipment 210,000
Less: Depreciation <u> (78,000) </u> 132,000
Current Assets
Cash 9,500
Accounts receivable 19,500
Inventory <u>35,000</u>
Total Current Assets <u>64,000</u>
Total Assets 196,000
Liabilities and Equity
Current Liabilities
Accounts Payable 75,000
Salaries payable <u> 31,000</u>
Total liabilities 106,000
Equity
Common Stock 69,000
Retained earnings <u> 21,000</u>
Total stockholders' equity <u> 90,000</u>
Total Liabilities and Equity 196,000