The maintenance department of a large hospital uses about 816 cases of liquid cleanser annually. Ordering costs are $12 and carr
1 answer:
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Answer:
net present value NPV = $79800
so correct option is D) $79,800
Explanation:
solution
we knw that Net Present value = PV of cash inflow - PV of cash outflow ............1
so here PV of cash outflow = $300000
and Net sales = $200000
expenses = $80000
Depreciation =
Depreciation = $50000
so Net income before taxes = Net sales - Depreciation - expenses
Net income before taxes = $200000 - $80000 - $50000
Net income before taxes = $70000
and Tax expenses @ 40% = $28000
so
Net income = Net income before taxes - Tax expenses
Net income = $70000 - $28000
Net income = $42000
and
Depreciation = $50000
Net cash inflow = Net income + Depreciation
Net cash inflow = $42000 + $50000
Net cash inflow = $92000
and
PVIFA @ 10% 5 years = $3.7908
so
PV of cash inflow = $348755
PV of salvage value = $50000 ×0.6209
PV of salvage value = $31045
and
so here Total PV of total cash inflow = $379800
and
net present value NPV = Total PV of total cash inflow - PV of cash outflow
net present value NPV = $379800 - $300000
net present value NPV = $79800
so correct option is D) $79,800
Answer: Trade between the two countries is beneficial when United States trade food to Canada and Canada would trade televisions to the United States.
Explanation: In international trade, each country will produce a good in which it has a comparative advantage (lower opportunity cost).
Opportunity cost of food is,
Unites states =
Canada =
Opportunity cost of television is,
Unites states =
Canada =
Since, opportunity cost of food is lower in the United states, United states will export food.
Opportunity cost of television is lower in Canada, Canada will export television to the United States.