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
dsp73
3 years ago
9

Rivian is considering an trucking assembly. The R1T assembly has an expected life of 5 years, will cost $95 million, and will pr

oduce net cash flows of $37 million per year. Inflation in operating costs and battery costs is expected to be zero, and the company's cost of capital is 10%. What is the equivalent annual annuity?
Business
1 answer:
svetoff [14.1K]3 years ago
6 0

Answer:

Rivian

The equivalent annual annuity is:

$28,053,400.

Explanation:

a) Data and Calculations:

R1T assembly investment cost = $95,000,000

Net cash flows = $37,000,000 per year

Cost of capital = 10%

Period of investment and annuity = 5 years

Annuity factor = 3.791

Present value of annuity = (3.791 * $37,000,000)/5

= 140,267,000/5

= $28,053,400

b) The net cash flows of $37 million per year will produce an annuity value of $28,053,400.  In comparison with the investment cost in the R1T assembly, the present value of the annuity is reasonable.

You might be interested in
Which of the following is true concerning federal budget deficits? I. The IRS spends more than it collects in taxes in a given y
ale4655 [162]

Answer:

II. The Federal Government spends more than it collects in taxes in a given year.

Explanation:

A federal budget deficit is when government spending exceeds income from taxes.

I hope my answer helps you

7 0
3 years ago
Treasury bills are paying a 4% rate of return. A risk-averse investor with a risk aversion of A = 3 should invest entirely in a
Tomtit [17]

Answer:

Answer is 12.64%. Therefore,

Treasury bills are paying a 4% rate of return. A risk-averse investor with a risk aversion of A = 3 should invest entirely in a risky portfolio with a standard deviation of 24% only if the risky portfolio's expected return is at least 12.64%.

Refer below for the explanation.

Explanation:

E - 4%= 0.5(3)(24%)2

E=12.64%

7 0
3 years ago
Read 2 more answers
_____ are any aspects of a good or service that a customer must believe in but cannot personally evaluate even after purchase an
stiv31 [10]

Answer:

<u>c. Credence attributes</u>

Explanation:

  • Credence is a good that has attributes that cannot be observed by the consumer even after purchasing the thus makes it difficult for them to access its utility such as expert services and medical procedures, automobile repairs, etc.
  • Here the seller has the option to change the quality ad quantity of the price by using his tactics and hence can cheat buyers with an inferior good. Like the automobile repair may be insufficient.
7 0
3 years ago
Larry is a minor, age 16 years old.
maxonik [38]

Answer:

What is entirely true about this contract is:

The contract is a VALID contract but is also a VOIDABLE contract on the part of Larry but NOT on the part of Sprint.

Explanation:

As a minor, Larry (he was under the age of 18 when he signed the contract with Sprint) lacks the contractual capacity to enter into the contractual relationship with Sprint.  But since he has signed the contract in exchange for the purchase of the cell phone, Larry can either honor the deal or void the contract.  This is why the contract is said to be valid but voidable at Larry's behest.  However, after Larry has turned 18, if he has not done anything to void the contract, then the contract with Sprint can no longer be voided.

4 0
3 years ago
Assume that the resort town of Ocean View passed a law imposing an extra tax on boardwalk food businesses that used plastic cups
TEA [102]

Answer:

The answer is: A) Is the law rationally related to a legitimate government interest?

Explanation:

A legitimate government interest applies when a government (in this case municipal government) passes a law to protect the health, safety, and economy of it's citizens.

This law will probably be reviewed using a rational basis, which is the least strict type of legal scrutiny.

3 0
3 years ago
Other questions:
  • An arbiter is consulted when
    12·1 answer
  • General cognitive ability is similar to which of the five leadership traits in this text
    5·1 answer
  • You are considering investing money in Treasury bills and wondering what the real​ risk-free rate of interest is.​ Currently, Tr
    8·1 answer
  • Grameen Bank extends credit to the very poor to give them the opportunity to build better lives. Other businesses target poor pe
    7·1 answer
  • The Boat Works decided to go public by offering a total of 135,000 shares of common stock to the public. The company hired an un
    8·1 answer
  • Assuming a current ratio of 1.2 and an acid-test ratio of 0.80, how will an increase in accounts receivable affect each ratio
    5·1 answer
  • What percentage do real estate investors make on average in total?
    10·2 answers
  • How will a low inflation rate in an exporting country affect its economy?
    14·1 answer
  • g CVP analyses (18 points) MusicWizard, Inc. manufactures and sells trombones with the following price and cost characteristics:
    8·1 answer
  • Productivity Standard 0.38 hrs (23 minutes) 8 hour shift = 480 minutes Beginning-of-shift duties 15 minutes Paid Morning break 1
    11·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!