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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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If a company from Country A decides to sell merchandise to a company from Country B, then the company from Country A ________.
Marizza181 [45]

Answer: C) can denominate the sale in either currency and use the foreign exchange market to convert currency

Explanation:

The options to the question are:

A) will denominate the sale in its own currency since it is too hard to convert foreign currency

B) will denominate the sale in the currency of the buyer since it is too hard for them toconvert foreign currency

C) can denominate the sale in either currency and use the foreign exchange market to convert currency

D) can use the OTC market to convert receipts in the future and the exchange markets to convert receipts in the spot market.

Since the company from Country A I the one selling merchandise to the company from Country B, it means that the company from Country A can denominate the sale in either currency and use the foreign exchange market to convert currency.

4 0
3 years ago
Creative Sound Systems sold investments, land, and its own common stock for $35 million, $14.5 million, and $39.0 million, respe
AlladinOne [14]

Answer:

The correct answer is $18.5 million.

Explanation:

According to the scenario, the computation of the given data are as follows:

we can calculate the cash flow from financing activities by using following formula:

Cash flow from financing activities = Issue of common stock - Purchase of treasury stock

By putting the value, we get

Cash flow from financing activities = $39.0 million - $20.5 million

= $18.5 million

5 0
4 years ago
Having just one error on a cover letter may eliminate an applicant from being considered for employment. True or false
Zielflug [23.3K]

Answer:

True

Explanation:

It shows that you are uneducated and not ready for a professional job, no matter what the job is you always need to show proper writing techniques. NO SLANG!

Hope that helps

4 0
3 years ago
Charles is a stay-at-home parent who lives in New York City and teaches tennis lessons for extra cash. At a wage of $25 per hour
Margaret [11]

Answer:

2.75, elastic.

Explanation:

Measure labor supply elasticity of Individual T's as follows :

              \bf Elasticity=\frac{Percent \;change\;in\;labour\;hr}{\frac{Average\;labour\;hour}{\frac{Percent\;change\;in\;wage\;price}{Average\;wage\;price} } }

                                \bf =\frac{16-6}{\frac{16+6}{\frac{2}{\frac{35-25}{\frac{35+25}{2} } } } }

                                \bf=\frac{10}{\frac{11}{\frac{10}{30} } }

                                \bf=\frac{0.91}{0.33}

                                =2.75

Therefore, the elasticity of the labour supply of Individual T's is approx. of earnings per hour. <u>2.75</u>, meaning that the work supply of Person T's is <u>elastic</u> across this wage range

4 0
3 years ago
Orange County Shop follows the revenue recognition principle. Orange County services a bicycle on July 31. The customer picks up
sp2606 [1]

The correct answer is A) July 31st.

Orange County shows that the revenue was recognized on July 31st.

The other options of the question were B) August 1. C) August 5. D) August 6.

To be successful, a business needs good control and operation systems. Accounting is of the utmost importance when controlling the finances of a company. You have to keep your records straight. Your accountant needs to clearly understand when to record revenue in your book. So the accountant has to understand the general principles of accounting. According to the revenue recognition principle, revenue has to be recognized when they are realized, so you keep it in the book.

4 0
3 years ago
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