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Lorico [155]
3 years ago
8

Wither Spoon Company requires a new manufacturing facility. It found three locations; all of which would provide the needed capa

city, the only difference is the price. Location A may be purchased immediately for $500,000 cash. Location B may be acquired with an immediate down payment of $100,000 and annual payments of $39,900 at the end of each of the next twenty years. Location C requires $42,500 payments at the beginning of each of the next twenty-five years. Assuming Wither Spoon Company's borrowing costs are 8% per annum, which option is the least costly to the company?
Business
1 answer:
suter [353]3 years ago
6 0

Answer:

$42,500 payments at the beginning of each of the next twenty-five years. Assuming Wither Spoon Company's borrowing costs are 8% per annum

Explanation:

Assuming Wither Spoon Company's borrowing costs are 8% per annum

th e option that is least costly to the company is Location C because it only requires $42,500 payments at the beginning of each of the next twenty-five years.

Hence Location A which may be purchased immediately for $500,000 cash and Location B which may be acquired with an immediate down payment of $100,000 and annual payments of $39,900 at the end of each of the next twenty years are not the best option for the company to choose from which therefore makes LOCATION C the best option for Wither Spoon Company because it save cost as as well the least costly to the company.

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A company invests $40,000 in a project with the following net cash flows: Year 1: $3,000 Year 2: $8,000 Year 3: $14,000 Year 4:
hram777 [196]

Answer:

the payback period is 3.34 years

Explanation:

The computation of the payback period is as follow;

Given that

Year       Cash flows         Cumulative cash flows

0             -$40,000           $-40,000

1               $3,000              $3,000

2              $8,000              $11,000

3              $14,000             $25,000

4              $19,000             $44,000

5              $22,000            $66,000

6               $28,000           $94,000

Now the payback period is

= 3 years +  ($40,000 - $25,000) ÷ $44,000

= 3 years + 0.34

= 3.34 years

Hence, the payback period is 3.34 years

8 0
3 years ago
In two or three sentences, describe how antitrust laws encourages competition
andreyandreev [35.5K]
Antitrust laws prevent monopolies. 
<span>A monopoly is a company or business that dominates a particular market to such an extent that there is no viable competition to that company. </span>
<span>Since a monopoly does not have any other serious competition in a market, the monopoly is at greater liberty to charge higher prices and offer lower-quality prices. </span>
<span>Antitrust laws break up or limit the size of monopolies, allowing other companies to enter a market.</span>
4 0
3 years ago
Which of the following is an advantage of the corporate form of business when compared to sole proprietorships and partnerships?
Rudiy27

Answer:

D. Limited Partnership

Explanation:

Sole proprietorship is business owned , run & managed by single owner. Partnership is a business owned , run & managed by small group of people - deciding to share its profits .

Entrepreneurs in these have Unlimited Liability on personal assets, in case business assets are insufficient to settle business liabilities .

Corporation is a separate legal entity, distinct from its huge group of owners , guided by a board of directors. In case of any claim / sue case : it is against corporate entity & not the people, so they don't have any unlimited liability risk on personal assets to fulfil company's claims .

5 0
3 years ago
If a firm favors a push strategy, using direct selling to educate potential consumers about the features of its products, what k
BigorU [14]

Answer:

industrial products

Explanation:

A company that does this and mostly favors a push strategy is usually selling industrial products. That is because a push strategy focuses on taking the product to the potential customer and showing them how it works as well as how it can benefit them, therefore pushing the product on them. Industrial Products are great for such a strategy since they require actual demonstration and can easily show the potential customer the actual value that the product can provide.

3 0
3 years ago
A company's weighted average cost of capital:_______.
Lemur [1.5K]

Answer:

The correct answer is D. Is the return investors require on the total assets of the firm.

Explanation:

The Weighted Average Capital Cost (WACC) is a financial measure, which has the purpose of encompassing in a single figure expressed in percentage terms, the cost of the different sources of financing that a company will use to fund a specific project.

To calculate the WACC, it is necessary to know the amounts, interest rates and tax effects of each of the selected sources of financing, so it is worth taking the time to analyze different combinations of these sources and take the one that provides the lower figure .

Comparatively, without going into the detail of the project evaluation, "the WACC must be less than the profitability of the project to be funded" or expressed in another order, "the project performance must be greater than the WACC."

4 0
3 years ago
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