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makkiz [27]
3 years ago
13

Alfarsi Industries uses the net present value method to make investment decisions and requires a 15% annual return on all invest

ments. The company is considering two different investments. Each require an initial investment of $15,700 and will produce cash flows as follows:
End of Year Investment
A B
1 $8,000 $0
2 8,000 0
3 8,000 24,000

The present value factors of $1 each year at 15% are: ________

a. 1
b. 0.8696
c. 2
d. 0.7561
e. 0.6575
Business
1 answer:
FromTheMoon [43]3 years ago
8 0

Answer:

e

Explanation:

the present value factor is the discount rate used to determine the present value of the investment

pv factor = 1 / (1 + r)^n

1 / 1.15^3 = 0.6575

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A standard "money demand" function used by macroeconomists has the form ln( ) = + ln( ) + m β , 0 β1 GDP β2R Where m is the quan
kvasek [131]

Answer:

1.The money demand will rise by 1.154%

2. The money demanded will fall and for a 1% increase in interest , the money demanded will fall by 0.38%

Explanation:

1. Money demand function

ln(m) = β0 +β1 ln(GDP)+β2R

Suppose β1 = 1.5 , β2 = −0.04 , GDP = $ 100 & R = 3%

ln(m) = 1.5 ln ($100) - 0.04 X 0.03

ln(m) = 6.91

m = 1002.247

Suppose the GDP increases by 1%; the new GDP will be = $ 101  

ln(m) = 1.5 ln ($101) - 0.04 X 0.03

ln(m) = 6.92

m = 1013.81

If the GDP increases by 1% ,the money demand will rise by 1.154%

2.

If the interest rate increases from 3% to 4%

ln(m) = 1.5 ln ($100) - 0.04 X 0.04  

ln(m) = 6.906155

m = $ 998.400

If the interest rate rises from 3% to 4% , the money demanded will fall and for a 1% increase in interest , the money demanded will fall by 0.38%

3 0
3 years ago
The Oxford Fixed Income Fund invests heavily in bonds. If the fund manager thinks that interest rates are going to fall, what ch
zepelin [54]

Answer:

A. Increase investment in long-term bonds

Explanation:

According to the Expectations hypothesis which is based on the principle that long-term rate is determined purely by current and future expected short-term rates, such that he expected final value from the accumulation of progression of short-term bonds approximates the final value from investing in long-term bonds.

Hence, given that when the interest rates fall, the prices of the bonds on the market already will rise, then it can be concluded that If the fund manager thinks that interest rates are going to fall, she should Increase investment in long-term bonds

5 0
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Janice and Shane are both senior software analysts. They have worked together on projects for six years and get along very well.
dybincka [34]

Answer:option D

Explanation: job sharing

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3 years ago
Bramble Corp. incurs the following costs to produce 13000 units of a subcomponent: Direct materials $10920 Direct labor 14690 Va
Mumz [18]

Answer:

$4,850

Explanation:

The computation is shown below:

Total cost when the production is 13,000 units

Direct materials $10,920

Direct labor $14,690

Variable overhead $16,380

Total $41,900

And, the other case

Their new cost on supplier offer is

= $2.85 × 13,000 units

= $37,050

In the case when the order is accepted So the net income would increased by

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= $4,850

7 0
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When mik has an absolute advantage in the production of two goods over tommy, mik?
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A country or an individual is said to have absolute advantage in producing a good if the person can produce the good more efficiently economic wise.
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