Answer:
$ -3,163.04
No
Explanation:
The net present value is the present value of after tax cash flows from an investment to the amount invested.
The NPV can be found using a financial calculator:
Cash flow in year 0 = -$60,000
Cash flow in year 1- $ 15,000
Cash flow in year 2- $25,000
Cash flow in year 3- $40,000 - $10,000 = $30,000
I = 10%
NPV = $-3,163.04
The project should not be embarked upon because the cost of the project is greater than the present value of the after tax cash flows. The NPV is negative.
To find the NPV using a financial calacutor:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. After inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.
3. Press compute
I hope my answer helps you
Answer:
Risk and Return
1. Joe is an average investor. His financial advisor gave him options of investing in stock A, with a σ of 12%, and stock B, with a σ of 9%. Both stocks have the same expected return of 16%. Joe can pick only one stock and decides to invest in stock B.
Good Financial Decision?
Yes
No
2. Marcie works for an educational technology firm that recently launched its employee stock option plan (ESOP). Marcie allocated all her investments in the ESOP.
Good Financial Decision?
Yes
No
3. rin wants to invest in a hedge fund that has had a very strong performance track record. The hedge fund has given its investors a return of over 60% for the past five years. Although Erin is tempted to put her money in the fund, she decides to conduct due diligence on the hedge fund’s assets, because she is aware that past performance is no guarantee of future results.
Good Financial Decision?
Yes
No
Explanation:
1. Joe's decision to invest in stock B is a good financial decision. Since both investments have the same returns, the decision on which investment to take shifts to the standard deviation of the returns, which specifies the variability of the returns. Invariably, the investment with less standard deviation should win the vote. Therefore, Joe's decision is a good financial decision because investment in B has a standard deviation of 9% unlike A's 12%.
2. Putting all eggs in one market as Marcie had done by allocating all her investments in the ESOP is not a good financial decision, theoretically. It is always best to spread the risks, though higher-yielding investments (returns) bear higher risks.
3. The decision of Erin to conduct due diligence on the hedge fund's assets, despite its past performance is a good financial decision. Due diligence reveals some behind-the-scene information that are instrumental in making sound business decisions. Who are the present managers of the fund? What systems are in place in the entity to guarantee similar future performance, all things being equal? What market's sentiments and information are available for consideration? These questions, and many others can be answered through a due diligence. Surely, "past performance is no guarantee of future results."
Answer:
organizational commitment; perceived stress
Explanation:
Organizational commitment is the psychology of the employee towards his organization. This may be good and bad. If employee is happy with his work environment he will try to give the 100% of his job and its increases his working capacity. Employee think good about his organization and want stick with the organization passionately for a longer time. So they have low level of perceived stress.
According to the analysis, strong organizational commitment and reported low levels of perceived stress is the reason that stark industries was rated number one for job satisfaction.
Research skills
(Time management is lower on the totem pole while the other 2 are on the bottom)
Answer:
Option (C) is correct.
Explanation:
The money multiplier = 1 ÷ reserve ratio
= 1 ÷ 0.1
= 10
If a bank purchases $65 million of government securities from the Fed then this will reduce the money supply in the economy because the money from the bank is going.
The decrease in money supply:
= purchase amount × money multiplier
= 65 × 10
= 650 million
