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Nikolay [14]
3 years ago
11

Alfarsi Industries uses the net present value method to make investment decisions and requires a 15% annual return on all invest

ments. The company is considering two different investments. Each require an initial investment of $15,000 and will produce cash flows as follows: End of Year Investment A B 1 $ 8,000 $ 0 2 8,000 0 3 8,000 24,000 The present value factors of $1 each year at 15% are: 1 0.8696 2 0.7561 3 0.6575 The present value of an annuity of $1 for 3 years at 15% is 2.2832 Which investment should Alfarsi choose?
Business
1 answer:
ohaa [14]3 years ago
6 0

Answer:

PV = $18,265.6

Explanation:

We will calculate the present value of the first investment ussing the annuity factor

annuity per year x factor = PV

8,000 x 2.2832 =  18,265.6

Then we calculate the PV of the second investment by multiplying the third year cash flow by the present value of $1 in 3 years

nominal x factor = PV

24,000 x 0.6575 = 15,780

the first alternative PV is higher than the second, so it is a better option

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Deadweight loss occurs when
dusya [7]

Answer:

d) the maximum level of total welfare is not achieved.

Explanation:

When the economic efficiency bears a loss, it is termed to be a deadweight loss. This condition occurs in the situation when the free market equilibrium is not able to be achieved. It occurs in the economy when the supply and the demand for the goods and services start to fall from being in the state of equilibrium. The resources allocated experiences a deficiency, thereby causing a deadweight loss.

3 0
3 years ago
Maxim has already spent $28,000 to manufacture a hamster food product called Green Health. Maxim currently has 10,000 bags of Gr
andriy [413]

The incremental income to process further for Maxim company equals to $30,000.

<h3>What is an Incremental income?</h3>

This means the profit that a business gains from an increase in sales.

It is gotten when there is an additional revenue generated by a certain product.

The Net income to be generated from Green health equals:

= Revenue - Cost

= $90,000 - $28,000

= $62,000

The Net income to be generated from Premium Green equals:

= Revenue - Extra cost

= $98,000 - $6,000

=$92,000

<h3>What is Incremental income to Process further?</h3>

= $92,000 - $62,000

= $30,000

Read more about Incremental income

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8 0
2 years ago
Weighted Average Cost Flow Method Under Perpetual Inventory System
Fudgin [204]

Answer and Explanation:

The computation of the cost od merchandised sold for each sale and the inventory balance after each sale is presented in the attachment below;

The perpetual inventory is the system which updated the inventory as on a regular basis

While on the other hand,  the weighted average cost method is the method in which the average cost is calculated after each every purchase is made

In the calculation below:

1. The weighted average cost of $30.90 come from

= (Total inventory cost) ÷ (Total quantity)

= ($180,000 + $1,674,000) ÷ (60,000 units)

= $30.90

1. The weighted average cost of $31.60 come from

= (Total inventory cost) ÷ (Total quantity)

= ($463,500 + $674,100) ÷ (36,000 units)

= $31.60

6 0
3 years ago
To what extent do stakeholders influence a plan and subsequent implementation of organization restructuring that accommodates ch
nydimaria [60]

Answer: None of the above

Explanation:

None of the options seem to be correct.

Stakeholder is the people who are interested in the the decision made by an organization. When a change takes place in an organization, the stakeholders are affected by such change. Stakeholders include board, managers, shareholders, workers etc.

The first option is wrong as stakeholders are incidental to the change process. They're always ever present in the change process.

The second option is wrong as well. Some stakeholders are decision makers and can influence the potential outcome of organizational restructuring. e.g board etc.

The third option is also incorrect. This is because stakeholder expertise in managing change should be considered by change leaders in the planning of adaptable organizational structures. Some stakeholders are expertise in change management and their knowledge is needed when there is planning of adaptable organizational structures.

That means we're left with only the Fourth option which is the right answer.

8 0
3 years ago
Kurt works as a waiter at a restaurant that's part of a nataional chain, producer or consumer?
Likurg_2 [28]
Producer because they do work for the company, I believe
6 0
3 years ago
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