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Orlov [11]
3 years ago
14

Gander, Inc. is considering two projects with the following cash flows: Year Project X Project Y 0 ($100,000) ($100,000) 1 40,00

0 50,000 2 40,000 0 3 40,000 0 4 40,000 0 5 40,000 250,000 Gander uses the payback period method of capital budgeting and accepts only projects with payback periods of 3 years or less. a. If the projects are presented as stand-alone opportunities, which one(s) would Gander accept
Business
1 answer:
bearhunter [10]3 years ago
4 0

Answer: Project X

Explanation:

Project X payback period:

Payback period if the inflow is constant = Investment amount / Annual inflow

= 100,000 / 40,000

= 2.5 years

Project Y payback period:

= Year before payback + Amount remaining / Cash inflow in year of payback

Project Y makes no inflows from year 2 to 4 and brings in a substantial amount in year 5. Year before payback must be 4 years therefore.

Amount remaining = 100,000 - 50,000 in first year

= $50,000

= 4 + 50,000 / 250,000

= 4.2 years

Project X will be chosen as its payback period is less than 3 years.

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Data regarding four different products manufactured by an organization are presented below. The manufacturer has a constrained r
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How many mono-, di- and
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4 years ago
After 15 years of employment in the airline industry, John started his own consulting company to use physical and computer simul
gogolik [260]

Answer:

9%

Explanation:

The first step is to understand the relevant terms in the question

Average Cost of New Capital

The cost of capital represents a required return rate (in percentage)  an organisation or an individual ( in the case of John) will need to make a capital project advantageous, worthwhile or profitable.

In the case of John, the Average Cost of New Capital is 9%

MARR - Minimum Acceptable Rate of Return

This rate also in percentage represents the lowest or minimum rate of return a business or an individual is able to accept in order to start a given project. It is usually based on the risk of the project as well as the alternate benefit foregone if other projects were accepted.

It is also called the Hurdle rate, or the cutoff rate.

John's MARR is 18%

Based on these,

John's Net rate of  return is calculated as follows

Minimum Acceptable Rate of Return - Average Cost of the New Capital

= 18% - 9% = 9%

5 0
3 years ago
What kind of loan protects bussiness in case of emergency​
Delicious77 [7]

Answer:

Loan protection insurance is designed to help policyholders by providing financial support in time of need. Whether the need is due to disability or unemployment, this insurance can help cover monthly loan payments and protect the insured from default.

Explanation:

3 0
3 years ago
The XO Group Inc. conducted a survey of brides and grooms married in the United States and found that the average cost of a wedd
professor190 [17]

Average cost is calculated in the following way

Explanation:

Given that XO Group Inc. conducted a survey of 13,000 brides and grooms married in the United States and found that the average cost of a wedding is $29,858

X is N(29,858, 5600)

Or Z=x-29158/5600 is N*(0,1)

We can use std normal distribution table to get the probabilities

a) The probability that a wedding costs less than $20,000 (to 4 decimals)

P(X<20000)

=0.039174

=0.0392

b) the probability that a wedding costs between $20,000 and $30,000

=0.5101-0.0392

=0.4709

c) For a wedding to be among the 5% most expensive, how much would it have to cost (to the nearest whole number)

=29858+1.645*5600

=38083

6 0
4 years ago
What type of marketing uses a variety of forms to communicate directly with target customers to generate a response or transacti
blsea [12.9K]

Answer:

C)Direct marketing is the correct answer.

Explanation:

The promotional method in which the information of company, product or survive is promoted directly to the customer without the use of advertising middleman is called direct marketing. In this method potential interest is presented to a consumer that is a likely buyer. Various of direct marketing are catalogues, fliers, Newsletters, phone calls etc. Although some marketing techniques aim to educate about company's products but the direct marketing aims to persuade people to take action, getting the sale is the ultimate goal.

3 0
3 years ago
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