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Alex
3 years ago
5

You are thinking about investing in a mine that will produce $10,000 worth of ore in the first year. As the ore closest to the s

urface is removed it will become more difficult to extract the ore. Therefore, the value of the ore that you mine will decline at a rate of 7% per year forever. If the appropriate interest rate is 3%, then the value of this mining operation is closest to
Business
1 answer:
Agata [3.3K]3 years ago
7 0

Answer:

$100,000

Explanation:

Cash flow = $10,000

Interest rate = 3%

Growth = -7%

Value of this mining operation = Cash / (Rate - Growth)

Value of this mining operation = $10,000 / (3% -(-7%)

Value of this mining operation = $10,000 / 10%

Value of this mining operation = $10,000 / 0.10

Value of this mining operation = $100,000

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Free cash flow is
ki77a [65]

Answer:

The correct answer is letter "E": cash flow from operations less cash used to purchase fixed assets to maintain productive capacity.

Explanation:

Free cash flow or FCF is the money available for investors and creditors after subtracting the operational expenditures and investments from the sales of a company. FCF is not the same as net income because FCF does not include non-cash expenses but FCF considers capital investments and expenses. FCF could reflect more changes compared to the net income.

7 0
4 years ago
Your boss has asked you and your marketing team to read through hundreds of new product ideas and separate those that are feasib
VMariaS [17]

Answer:

idea screening

Explanation:

The idea screening stage of new product development process involves the filtering the ideas to pick out the best ones. At the screening stage good ideas should be spotted and bad ideas should be disposed.

This is a very critical stage since deciding which ideas are worth developing and which aren't is a very difficult and important task. You don't want to invest in a bad idea, so you should be careful, but you don't want to toss away any potentially good idea.

8 0
3 years ago
You will receive 27 annual payments of $22,500. The first payment will be received 7 years from today and the interest rate is 5
bixtya [17]

Answer:

PV= $230,148.09

Explanation:

Giving the following information:

You will receive 27 annual payments of $22,500. The first payment will be received 7 years from today and the interest rate is 5.1 percent.

First, we need to calculate the final value of the payments.  We need to use the following formula:

FV= {A*[(1+i)^n-1]}/i

A= annual pay= 22,500

n= 27

i= 0.051

FV= {22,500*[(1.051^27)-1]}/ 0.051

FV= $1,248,819.52

Now, we can calculate the present value:

PV= FV/(1+i)^n

PV= 1,248,819.52/ (1.051^34)

PV= $230,148.09

6 0
3 years ago
Finance companies __________.
zysi [14]
Finance companies are reliable institutions because of its capacity to <span>supply credits for the purchase of consumer goods and services by consumers and even other businesses. In this case, they can range from small institutions to large ones. Answer is D</span>
8 0
4 years ago
A man wants to decide whether to invest $1000 in a friend's speculative venture. He will do so if he thinks he can get his money
andrew11 [14]

Answer:

His expected outcome would be $1,100.

Explanation:

Expected outcome is the sum of the product of all the results and probabilities.

For this question, this can be calculated as follows:

Expected outcome = ($2000 * 0.3) + ($1500 * 0.1) + ($1000 + 0.2) + ($500 * 0.3) + ($0 * 0.1)

Expected outcome = $600 + $150 + $200 + $150 + $0

Expected outcome = $1,100

Therefore, his expected outcome would be $1,100.

8 0
3 years ago
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