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murzikaleks [220]
3 years ago
15

Ranger Corporation has decided to invest in renewable energy sources to meet part of its energy needs for production. It is cons

idering solar power versus wind power. After considering cost savings as well as incremental revenues from selling excess electricity into the power grid, it has determined the following.
Solar Wind
Present value of annual cash flows $52,580 $128,450
Initial investment $39,500 $105,300

Required:
Determine the net present value and profitability index of each project. Which energy source should it choose?
Business
1 answer:
KonstantinChe [14]3 years ago
4 0

Answer:

Net present value of Solar = $13,080

Net present value of Wind = $23,150

Profitability index of Solar  = 1.33

Profitability index of Wind = 1.22

Ranger Corporation should choose Solar.

Explanation:

Net present value (NPV) refers to the difference between the present value of cash flows and initial investment of a project. It can be calculated as follows:

Net present value = Present value of annual cash flows - Initial investment ...... (1)

Profitability index refers to the ratio of the present value of cash flows to the initial investment of a project. It shows the amount of returns in present value for every one dollar invested. It can be calculated as follows:

Profitability index = Present value of annual cash flows / Initial investment ...... (2)

Using equation (1) and (2), we have:

Net present value of Solar = $52,580 - $39,500 = $13,080

Net present value of Wind = $128,450 - $105,300 = $23,150

Profitability index of Solar = $52,580 / $39,500 = 1.33

Profitability index of Wind = $128,450 / $105,300 = 1.22

Ranger Corporation should choose Solar. This is because despite that its NPV of $13,080 is lower than $23,150 of Wind, its Profitability index of 1.33 is higher. This indicates that the amount of returns in present value for every one dollar invested in Solar is higher than that of Wind.

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Profits from a sole proprietorship are reported as taxable income and (B) are subject to a self-employment tax of approximately 15%.

Explanation:

Sole proprietors are asked to  contribute  to both the Social Security and Medicare systems,this type of  contributions is known as the  "self-employment taxes."

Self-employment taxes are considered equal to the  payroll tax in case of an  employees of a business. Regular employees are said to make their  contributions to the above mentioned  two programs in form of  deductions fr, sole proprietors  make such contributions when the pay their  income tax

The rate of  self-employment tax  is 15.3%, which is further divided as  12.4% of  Social Security  and 2.9% of  Medicare .

Thus we can say that Profits from a sole proprietorship are reported as taxable income and (B) are subject to a self-employment tax of approximately 15%.

8 0
3 years ago
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Why have nonalcoholic drinks increased in popularity, and what difficulties do bar managers face when serving alcohol
Verizon [17]

Answer:

People consumes less of alcohol and more of non alcoholic drinks.

Explanation:

Now-a days people consumes less of alcoholic drinks as non alcoholic beverages or drinks are becoming non popular day by day. People have become more health conscience and wants to remain fit. Now wonder alcohol causes a lot harm to the human health. People now are aware of the side effects of consuming alcohol.

In the recent years the life style of the people have change a lot and they they have become health conscious than before. The consumption of other non alcoholic drinks have become familiar and famous including green tea, fruit juices, goji juice and many more.

The bar managers also face difficulty in serving alcohol to people as people refuse to drink them. They are more health conscience and is aware of the fatal incidents about drunk driving. They prefer other non beverages in the bar. As a result the sale of alcohol has decreased a lot. There are also various awareness programs running against consumption of alcohol.Thus people do not drink alcohol any more and so it is difficult for the bar managers to offer alcohol to their customers.

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3 years ago
Jeremy wants to avoid conflict with his new coworkers. he should ______. a. spread gossip with them b. treat them all with respe
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Jeremy wants to avoid conflict with his new coworkers. He should treat them all with respect.

Option B is correct answer.

Conflict in workplace :

Conflict is a difference or disagreement between two or more people. Conflict in the workplace is a normal part of human interaction, yet, handling and resolving conflicts that arise is probably one of the biggest challenges employees face.

What is good conflict in the workplace?

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8 0
1 year ago
What is the name of the law, administered by the governor through the Office of Consumer Affairs, that is designed to protect th
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The Georgia fair business practices act
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2 years ago
Money that has been or will be paid regardless of the decision whether to proceed with the project is:
bezimeni [28]

Answer:

Sunk costs.

Explanation:

Sunk costs refers to historical funds spent or incurred that cannot be recovered. Such costs are considered irrelevant during decision making which impacts on the business's future as they present no influence on present or future prospects.

Example

ABC investors decide to acquire land and develop residential houses at a location X. This decision is informed on the fact that the government had recently enacted a policy that led to an increase in demand for residential properties in that location. 6 months into construction of the residential houses, the government reviews and rescinds the policy. This leads to a sharp decline in property values in location X. ABC investors had already incurred 10 million dollars in the project. The 10 million dollars is considered sunk cost.

Sunk costs are the opposite of relevant costs because they can't be changed or recovered, as they've been spent or contracted in the past already. Hence, relevant cost are relevant for decision-making purposes but not sunk costs.

Hence, money that has been or will be paid regardless of the decision whether to proceed with the project is sunk costs.

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