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2 years ago

The management of Unter Corporation, an architectural design firm, is considering an investment with the following cash flows:

Business

1 answer:

Taya2010 [7]2 years ago

7 0

Answer:

6.50 Years

Explanation:

The computation of the payback period of the investment is shown below;

Total cash outflow is

= $15,000 + $8,000

= $23,000

Now the Cash Inflow in all 6 years is

= $1,000 + $2,000 + $2,500 + $4,000 + $5,000 + $6,000

= $20,500

Cash inflow in Year 7 is $5,000.

But Cumulative Cash flows from Year 1 to Year 7 is

= $20,500 + $5,000

= $26,500

This amount is more than Initial Investment i.e. $23,000.

So our Payback period is between 6 & 7 years i.e.

= 6 + ($23,000 - $20,500) ÷ 5000

= 6.50 Years

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The expected value of each course of action in a decision tree is determined by starting at the beginning of the tree (the left-

zvonat [6]

Answer:

False

Explanation:

The expected value of each course of action in a decision tree is not determined by starting at the beginning of the tree, instead it is a process because you need to make a desition and in some extend you espect to have some results but some of them are uncertain or unespected. in this kind of scheme Squares represent decisions, and circles represent uncertain outcomes. Then you need to calcule the desition nodes giving each option a cost or value, This will give you a value that represents the benefit of each decision. at the end calculating choose the option that has the largest benefit, and take that as the decision made. This is the value of that decision node.

5 0

3 years ago

Piercy, LLC, has identified the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B) 0 −$ 68,000 −$ 68,00

den301095 [7]

Answer:

IRR for A= 35.33%

IRR for B = 31.88%

Explanation:

Internal rate of return is the discount rate that equates the after tax cash flows from an investment to the amount invested

IRR can be calculated using a finacial calculator :

IRR for cash flow A

Cash flow in year 0 = −$ 68,000

Cash flow in year 1 = $44,000

Cash flow in year 2 = $38,000

Cash flow in year 3 = $25,000

Cash flow in year 4 = $15,600

IRR = 35.33%

IRR for cash flow A

Cash flow in year 0 = −$ 68,000

Cash flow in year 1 = $30,200

Cash flow in year 2 = 34,200

Cash flow in year 3 = $40,000

Cash flow in year 4 = $24,200

IRR = 31.88%

To find the IRR using a financial calculator:

1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.

2. After inputting all the cash flows, press the IRR button and then press the compute button

7 0

3 years ago

Adams Company is a manufacturing company that has worked on several production jobs during the first quarter of the year. Below

Paha777 [63]

Answer:

d.$1,685

Explanation:

Though many jobs were completed, but only Job 356 and 357 were sold.

Cost of Goods Sold = cost of job 356 +cost of job 357

= $450 + $1,235

= $1,685

5 0

3 years ago

In the late 1970s Federal Reserve Chairman Paul Volcker contracted the money supply to reduce the rate of inflation. One result

xxTIMURxx [149]

Answer: to increase interest rates which reduced aggregate demand.

Explanation:

Since the money supply was contracted to reduce the rate of inflation, this will lead to increase interest rates which reduced aggregate demand.

In this case as a result of the increase in the interest rate, people will prefer to save their money in the banks and thus will result in less money in circulation which ultimately reduces the demand for goods and services.

8 0

2 years ago

If your friend Raheem asks you, “What type of account should I use to save for retirement,” what would you tell him?

SSSSS [86.1K]

Answer:

Roth IRA account

Explanation:

The best type of account that you should save money in for Retirement is a Roth IRA account. This will allow you to put and save a maximum of $5,500 USD per year which will compound annually with interest and can be redeemed when you retire. Once you redeem your money at the age of 65 1/2 it will be completely tax-free. Meaning you have no liabilities with that money whatsoever and you can simply enjoy your retirement with that money.

7 0

3 years ago