1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Lunna [17]
3 years ago
13

A firm is considering a project with annual cash flows of $300,000. The project would have a five-year life, and the company use

s a discount rate of 12%. What is the amount at which the firm would be indifferent between accepting or rejecting the investment
Business
1 answer:
stealth61 [152]3 years ago
7 0

Answer:

$1,081,434

Explanation:

<em>At indifference point, the present value of cash outflow equals  present value of cash inflow.</em>

Present value of cash inflow = Annual cash inflow * PV annuity factor (12%, 5 years)

Present value of cash inflow = $300,000*3.60478

Present value of cash inflow = $1,081,434

So, the amount at which the firm would be indifferent between accepting or rejecting the investment is $1,081,434.

You might be interested in
This is an online live debate first 2 people to comment are the debaters the rest are the jury and they reply to chat the debate
Lana71 [14]
Hello there!

Let's take note of some things first. When a argument occurs, there's always two different kind of people. You would have someone who think he has a point and he explains his opinion on this matter, and then you would have the other opponent who would most likely say the complete opposite of this other person.

Now, when conduction the argument of the topic "cell phones", there would be a ton of different opinions on this matter.

For an example:

(Person #1) - opposer.

Cell Phone's are very useful, when you need to call a person, you would have something to communicate with the other person. It would be encounter as a essential in our every day life.

 (Person #2) - opposer.

I believe that Cell Phones are unsafe. People could track you down and hurt you to the full. They can take your information, and then you would have some several bad cases on this matter. I believe that Cell Phones are not safe.
                                            __________
Based on looking at this example here, you would see on how they're are two different opinions here. They both have different explanations.

I hope this helps you!
8 0
3 years ago
Read 2 more answers
Sydney has worked for WillCo for the last 20 years. She just had her 60th birthday and is thinking about retirement. WillCo spon
Wittaler [7]

Answer: c. Sydney can diversify 50% of her WillCo stock.

Explanation:

Employee stock ownership plan (ESOP) is simply referred to as an employee benefit where the employees of a particular company are given ownership interest as long as some certain criteria are met.

Once the workers become qualified participants, they can diversify certain percentage of their stocks. From the 1st-5th year, a qualified participant is allowed to diversify about 25% of his or her stock account and about 50% in the 6th year.

Based on the explanation, since Sydney has worked for WillCo for the last 20 years, Sydney can diversify 50% of her WillCo stock.

5 0
3 years ago
Currently, Bruner Inc.'s bonds sell for $1,250. They pay a $120 annual coupon, have a 15-year maturity, and a $1,000 par value,
elena-14-01-66 [18.8K]

Answer:

2.11%

YTM 0.089142162

YTC 0.068070103

Difference: 0.021072059 = 0.0211 = 2.11%

Explanation:

To calculate each rate we must solve for a rate at which the future coupon payment and maturity (or call value) equals the market price:

This is solve for excel and goal seek tool

It could also be solve with a financial calculator

YTC:

C \times \frac{1-(1+r)^{-time} }{rate} = PV\\

Coupon payment: $ 120

time 5 yeaars

rate 0.068070103 (solved with excel)

120 \times \frac{1-(1+0.0680701028057608)^{-5} }{0.0680701028057608} = PV\\

PV $494.5766

\frac{Maturity}{(1 + rate)^{time} } = PV  

Maturity: $ 1,050 (call price)

time   5.00

rate  0.068070103

\frac{1050}{(1 + 0.0680701028057608)^{5} } = PV  

PV   755.42

PV c $494.5766

PV m  $755.4235

Total $1,250.0002

YTM:

C \times \frac{1-(1+r)^{-time} }{rate} = PV\\

Cuopon payment: $ 120

time 15 years

rate 0.089142162 (solved with excel)

120 \times \frac{1-(1+0.0891421622982136)^{-15} }{0.0891421622982136} = PV\\

PV $972.2006

\frac{Maturity}{(1 + rate)^{time} } = PV  

Maturity $ 1,000.00

time   15 years

rate  0.089142162 (solved with excel)

\frac{1000}{(1 + 0.0891421622982136)^{15} } = PV  

PV   277.80

PV c $972.2006

PV m  $277.7995

Total $1,250.0001

6 0
3 years ago
During the purchase decision process, an individual at the __________ stage will perceive differences between his or her ideal a
Dimas [21]

Answer:

"Problem recognition" is the correct answer.

Explanation:

  • An empirical investigation has said that the initial phase of the development procedure of the customer and therefore its approach to buying seems to be the acknowledgment of problems that arise when consumers realize that perhaps the problem would also have to be solved.
  • This is whenever the customer sees a requirement and is driven to rectify the conflicts.
3 0
3 years ago
According to the law of increasing opportunity cost,
Alenkinab [10]

Answer:

The correct answer is a. production points outside the production possibility frontier are unattainable

Explanation:

Production possibility frontier graph is attached.

The production possibility frontier shows the possibilities of trade off between two products. The trade off in this frontier use all the resources available. So it is impossible to  reach a point outside the frontier, there are not enough resources.

Download xlsx
7 0
4 years ago
Other questions:
  • Which of the following follows the peak in the business cycle?
    11·1 answer
  • The following information pertained to Azur Co. for the year: Price of goods purchased $102,800 Price discounts 10,280 Freight-i
    11·1 answer
  • All of the following statements related to preparation of the statement of cash flows under U.S. GAAP and IFRS are true except:
    7·1 answer
  • As the vp of warranty claims in the andrews company, you and your team regularly review your insurance broker emails as a proced
    8·2 answers
  • You are going to deposit $26,000 today. You will earn an annual rate of 6.1 percent for 11 years, and then earn an annual rate o
    5·1 answer
  • A country produces only one good. It produced​ 5,000 units of the good during Year 1 and​ 6,000 units of the good in Year 2. The
    8·1 answer
  • Graham’s team recently completed a project, and Graham has to provide feedback to the different team members. He is nervous abou
    9·1 answer
  • Due to erratic sales of its sole product—a high-capacity battery for laptop computers—PEM, Inc., has been experiencing financial
    12·1 answer
  • bases its manufacturing overhead budget on budgeted direct labor-hours. The direct labor budget indicates that 5,600 direct labo
    12·1 answer
  • Which of the following is not a fee that contributes to the initial cost of leasing a car? a. First payment b. Final payment c.
    10·2 answers
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!