Anita is interested in new technology that can make the processes at her business run more smoothly. What resources could she us
2 answers:
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Answer:
A) $56.5
Explanation:
Data:
Project S
Initial cost $10,000
Y1 CF = $6,000
y2 CF = $8,000
Project L
Initial Investment = $10,000
Y1-Y4 CF = $4,373
Solution:
<u>For Project S</u>
We shall prolong the project to four years so it can be easily compared to project L
Following shall be the cashflow stream:
Y0=-$10,000 Y1=$6,000 Y2=-$2,000($8,000 CF - $10,000 outlay for prolonging the project second time) Y3=$6,000 Y4=$8,000
Now to discount the cashflow
<u>For Project L</u>
In order to calculate present value of the annuity, following formula will be used:
<em>NPV = Initial outlay - PV</em>
Now, we can easily calculate how much value will the firm gain or lose if Project L is selected over Project S
<em>*all figures are rounded off to two decimal points*</em>
Answer:
P = $75 per club
n= 75,000 clubs
Explanation:
The demand and supply functions are:
The equilibrium price is the price that yields a quantity demanded equal to the quantity supplied:
The number of units sold at that price is: