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Rus_ich [418]
3 years ago
11

Boulderado has come up with a new composite snowboard. Development will take Boulderado four years and cost $250,000 per year, w

ith the first of the four equal investments payable today upon acceptance of the project. Once in production the snowboard is expected to produce annual cash flows of $200,000 each year for 10 years. Boulderado's discount rate is 10%. Calculate the IRR for the snowboard project and use it to determine the maximum deviation allowable in the cost of capital estimate that leaves the investment decision unchanged.
Business
1 answer:
ehidna [41]3 years ago
3 0

Answer:

a) 13.704%

b) 3.704%

Explanation:

Development of composite snowboard = 4 years

Total cost / investment = 250,000 * 4 = $1,000,000

Annual cash flows ; $200,000  for 10 years

discount rate = 10%

cash flow at t = 0 =  ( Total cost / investment ) = - $1,000,000

<u>a) calculate the IRR for the snow board </u>

attached below is the calculation using online tool

IRR = 13.704%

<u>b) maximum deviation allowable in cost of capital</u>

maxi deviation = IRR - r

                         = 13.704% - 10% = 3.704%

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MaRussiya [10]

Answer:

<h2>In this case,the answer would be option D. or It can be a source of competitive advantage for a period of time.</h2>

Explanation:

  • In Production Economics,any organizational input in the production process can provide competitive advantage to any firm or company for a sustainable period of time only if it provides commercial or economic value to the firm or company,it is unique and it cannot be completely imitable or substituted through other equivalent resource/s by other market competitors.
  • Therefore,if any organization resource or input is easily imitated then it cannot ensure long term or sustainable competitive advantage for any firm or company in the market.
  • However,it can provide some temporary market advantage or competitive edge to any particular firm or company until the time it is fully imitated and implemented by its competitors or rivals.
3 0
3 years ago
During 2021, Angel Corporation had 990,000 shares of common stock and 95,000 shares of 6% preferred stock outstanding. The prefe
frozen [14]

Answer:

$7.23

Explanation:

Basic Earnings per share = (Net Income - Preferred Dividend) / Weighted average of outstanding common shares

Basic Earnings per share = ($7,350,000 - $195,000) / 990,000 shares

Basic Earnings per share = $7,155,000 / 990,000 shares

Basic Earnings per share = 7.22727273

Basic Earnings per share = $7.23

So, the amount of Angel's basic earnings per share for 2021 is $7.23.

6 0
2 years ago
Mystic Laboratories reported total assets of $11,200,000 and noncurrent assets of $1,480,000. The company also reported a curren
Anastasy [175]

Answer:

$6,480,000

Explanation:

The computation of the amount of the current liabilities is shown below:

Total assets of $11,200,000

Less: Noncurrent assets $1,480,000

Current Assets = $9,720,000

Now as we know that

Current ratio  = Current Assets ÷ Current Liabilities

Current Liabilites is

= $9,720,000 ÷ 1.5

= $6,480,000

hence, the current liabilities is $6,480,000

3 0
3 years ago
On January 2, 2017, the board of directors of Michael declared a 10% stock dividend to be distributed on February 15, 2017. The
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Answer:

the decrease in the value of the retained earning is $172,500

Explanation:

The computation of the decrease in the value of the retained earning is given below:

The dividend of the stock is

= (25,000 shares - 2,000 shares) × 10% × $75

= $172,500

Since there is the stock dividend of $172,500 so it ultimately reduced the retained earning account by $172,500

8 0
2 years ago
Explain the nature of promotional plan
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Answer:

A promotional plan of a company refers to the promotional mix. This mix contains decisions regarding the company which would put them on the path of growth and lead them towards success.

This consists of decisions regarding the manufacturing procedures, marketing decisions, market niche decisions, customer care services if required, promotional decisions, planing and strategic organizational decisions and etc.

8 0
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