Answer:
The answer is 30%
Explanation:
Solution
Given that:
Project A
Project A costs = $350
Cash flows =$250 and $250 (next 2 years)
Project B
Project B costs =$300
Cash flow = $300 and $100
Now what is the crossover rate for these projects.
Thus
Year Project A Project B A-B B-A
0 -350 -300 -50 50
1 250 300 -50 50
2 250 100 150 -150
IRR 27% 26% 30% 30%
So,
CF = CF1/(1+r)^1 + CF2/(1+r)^2
$-50 = $-50/(1+r)^1 + $150/(1+r)^2
r = 30%
CF = CF1/(1+r)^1 + CF2/(1+r)^2
$50 = $50/(1+r)^1 + $-150/(1+r)^2
r = 30%
Hence, the cross over rate for these project is 30%
Note:
IRR =Internal rate of return
CF =Cash flow
r = rate
Answer: remain at the same level despite changes in production
Explanation:
Answer:
Italy has a comparative advantage in the production of cheese
Explanation:
Suppose that Italy and Sweden both produce rye and cheese.
Italy's opportunity cost of producing a pound of cheese is 5 bushels of rye while Sweden's opportunity cost of producing a pound of cheese is 10 bushels of rye.
<u>By comparing the opportunity cost of producing cheese in the two countries, you can tell that Italy has a comparative advantage in the production of cheese because it has a lower opportunity cost (as a matter of fact half the cost) in comparison with Sweden.</u>
<u>Comparative advantage is an economic term that refers to an economy's ability to produce goods and services at a lower opportunity cost than that of trade partners</u>
Answer:
$32,980
Explanation:
The computation of comprehensive income is shown below:-
Comprehensive income = Cash dividend + Unrealized holding gain
= $11,800 + $31,800
= $32,980
Comprehensive income includes net profit and other complete or compression profits.
Net revenue involves operating and non-operating income, net of expenses
. Other comprehensive profits consisted of unrealized gains or losses, cash flow hedges.
So in this question we considered the dividend and unrealized holding gain as an comprehensive income
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