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poizon [28]
3 years ago
5

Sister Pools sells outdoor swimming pools and currently has an aftertax cost of capital of 11.6 percent. Al's Construction build

s and sells water features and fountains and has an aftertax cost of capital of 10.3 percent. Sister Pools is considering building and selling its own water features and fountains. The initial cash outlay for this project would be $80,000. The expected net cash inflows are $17,000 a year for seven years. What is the net present value of the Sister Pools project
Business
1 answer:
Aloiza [94]3 years ago
8 0

Answer:

$1,952 (Positive NPV)

Explanation:

Year   Annual CF ($)   PV factor at 10.30%    PV of Cash Flow ($)

1               17,000                  0.90662                         15,413

2              17,000                  0.82196                          13,973

3              17,000                   0.74520                         12,668

4              17,000                   0.67561                          11,485

5              17,000                   0.61252                          10,413

6              17,000                   0.55532                          9,441

7              17,000                    0.50347                          8,559

TOTAL                                    1.73554                          81,952

Net Present Value (NPV) = Present value of annual cash flows - Initial Cost

Net Present Value (NPV) = $81,952 - $80,000

Net Present Value (NPV) = $1,952 (Positive NPV)

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Explain what is happening during each phase of the cycle with: I. output, II. employment III. and inflation
Ludmilka [50]

Answer:

During each phase of the economic cycle of Recession and Expansion, the following economic variables fluctuate, accordingly:

I. Output: During Recession, production output reduces.  But, during expansion, product output rises with rising income, employment, and even stable inflation.

II. Employment: During phases of economic Expansion, employment rises, while it contracts during the phases of Recession.

III. Inflation: Due to rising income and output during economic expansionary periods, inflation rate also rises.  It reduces when the economy enters a recession.

Explanation:

Business or Economic Cycle describes the recurrent, but not periodic, sequence of changes in the aggregate economic activities of a nation.  It usually cascades between the spectrum of expansion and recession.  This means that there is an alternation of the phases of economic cycle between expansion and contraction (recession) when the aggregate economic activities may rise or decline due to the equal movement of economic variables like the GDP output, employment, income, and sales.

5 0
3 years ago
g: Sorin Incorporated, a company that produces and sells a single product, has provided its contribution format income statement
madam [21]

Answer:

Total contribution margin= $59,800

Explanation:

Giving the following information:

Unitary selling price= 155,400 / 4,200= $37

Unitary variable cost= 100,800 / 4,200= $24

<u>To calculate the total contribution margin, we need to use the following formula:</u>

Total contribution margin= units sold*(selling price - unitary variable cost)

Total contribution margin= 4,600*(37 - 24)

Total contribution margin= $59,800

6 0
3 years ago
A local college of business offers an outstanding graduate business school education program. Marissa pays the tuition to attend
rewona [7]

Answer:

Yes, it was a marketing exchange

The payment made of the tuition was exchanged for the knowledge that led Marissa to the new paid and satisfactory job.

Explanation:

Given that changing means taking one thing for another, in the context of marketing, we understand by exchange relationship an act of communication where the parts involved (two or more) make the offer and reciprocally deliver something of value ( comparison with other objects) and useful (measure of the satisfaction obtained when receiving something of value) that passes to the other part.

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3 years ago
Which of the following is an example of using physical capital to save time and money?
Vera_Pavlovna [14]
Expanding a factory.
4 0
3 years ago
Read 2 more answers
Deltona Motors just issued 230,000 zero-coupon bonds. These bonds mature in 18 years, have a par value of $1,000, and have a yie
Sergeeva-Olga [200]

Answer:

$81,959,737

Explanation:

Zero coupon bond is the bond which does not offer any interest payment. It is issued on deep discount price and Traded in the market on discounted price.

As per given data:

Numbers of Bonds = 230,000

Numbers of years to mature = n = 18 years

Face value = F = 230,000 x $1,000 = $230,000,000

YTM = 5.9%

Value of zero coupon bond = Face value / ( 1 + YTM )^n

Value of zero coupon bond = $230,000,000 / ( 1 + 5.9% )^18

Value of zero coupon bond = $230,000,000 / ( 1 + 5.9% )^18

Value of zero coupon bond = $81,959,737

7 0
3 years ago
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