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ehidna [41]
3 years ago
8

The Corner Market has decided to expand its retail store by building on a vacant lot it currently owns. This lot was purchased f

our years ago at a cost of $299,000, which the firm paid in cash. To date, the firm has spent another $38,000 on land improvements, all of which was also paid in cash. Today, the lot has a market value of $329,000. What value should be included in the analysis of the expansion project for the cost of the land? Multiple Choice The current market value of the land The original purchase price only The current market value of the land plus the cash paid for the improvements Zero because the land and the improvements were previously purchased with cash The sum of the cash paid to date for both the lot and the improvements
Business
1 answer:
marysya [2.9K]3 years ago
5 0

Answer:

a. The current market value of the land

Explanation:

An expansion project costing plays a huge role. According to relevant cost, all irrelevant cost in the business should not be considered while analyzing a project. In the past, cost incurred in purchase of the land and its improvement is sunk cot, hence these expenditure ares irrelevant while analyzing the expansion project. The only cost which is to be considered is current market value of the land.

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Which of the following statements is correct? Multiple Choice Interest rates and bond prices vary directly. Interest rates and b
nevsk [136]

Answer:

Interest rates and bond prices vary inversely

Explanation:

The relationship between interest rate and bond prices can be seen in the bond pricing formula. Given a series of coupon payments (C) paid over the lifetime (ranging from "1" through "i" to "n") of a bond, and given that the bond will repay the principal investment (F) at maturity, the price of the bond is

P = ∑\frac{C}{(1+r)^{i}}  + \frac{F}{(1+r^{n})}

where "r" is the interest rate.

As seen in the formula, the price of the bond (P) is inversely related to the interest rate (r).

Option A is incorrect because interest rates and bond prices vary indirectly, not directly. Option C is incorrect because interest rates and bond prices are related. Option D is incorrect because vary inversely irrespective of inflation and recession.

8 0
3 years ago
The decision concerning how the dollars left over from a defense cutback will be distributed is an example of
andrew11 [14]
The decision concerning how the dollars left over from a defense cutback will be distributed is an example of a goal conflict. The idea behinf the term goal conflict is that <span>sometimes it is difficult to achieve our </span>goals<span> because they </span><span>conflict</span>
7 0
4 years ago
Paul Blocker is the offensive line coach for a university football team. He wants his players to report to fall practice in good
defon

Answer:

a. expectancy theory

Explanation:

Expectancy theory -

According to this theory , a person will behave in a specific way depending on the individual's choice , is referred to as the expectancy theory .

It is also known as the expectancy theory of motivation .

Various factors make the person to select some specific behavior over others like outcome , strength , intelligence etc.

Hence , from the given scenario of the question ,

The correct answer is expectancy theory .

4 0
4 years ago
What is the typical relationship between time and interest rate
FrozenT [24]

The longer the period of time the higher the interest rate

8 0
3 years ago
Following is information on two alternative investments being considered by Tiger Co. The company requires a 6% return from its
Pani-rosa [81]

Answer:

Explanation:

NPV is today's value of expected cash flows - today's value of invested cash.

Therefore, we need to identify current worth of cash flows by doing this:

47000/(1+0.06) +57500/(1+0.06)^2 + 82500/(1+0.06)^3 = 44339.6+51174.8+69268.6 = 164783

To find NPV we subtract investment amount from 164783. So, 164783 - 124000 = 40783. This is an NPV of first project x1

Now, we do the same calculations for project x2:

93000/(1+0.06) +83000/(1+0.06)^2 +73000/(1+0.06)^3 = 87736+73870+61292= 222898

222898 - 208000(investments) = 14898

Now let's calculate profitability index:

PI = Present value of future cash flows/ initial investment

PI for project x1 = 164783/124000 = 1.33

PI for project x2 = 222898/208000 = 1.071

From our calculations of NPV and Profitability Index we can see that project x1 should be chosen because it has higher NPV and profitability index

3 0
3 years ago
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