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olasank [31]
3 years ago
8

Pollution Busters Inc. is considering a purchase of 10 additional carbon sequesters for $103,000 apiece. The sequesters last for

only 1 year before becoming saturated. Then the carbon is sold to the government.
Required:
a. Suppose the government guarantees the price of carbon. At this price, the payoff after 1 year is $120,510 for sure. How would you determine the opportunity cost of capital for this investment?
b. Suppose instead that the sequestered carbon has to be sold on the London Carbon Exchange. Carbon prices have been extremely volatile, but Pollution Bustersâ CFO learns that average rates of return from investments on that exchange have been about 22%. She thinks this is a reasonable forecast for the future. What is the opportunity cost of capital in this case?
c. If the expected return on the investment is still 17%, but instead depends on the price of carbon (so that it is no longer risk-free), then is the purchase of additional sequesters an attractive investment for the firm?
d. Suppose the government guarantees the price of carbon. At this price, the payoff after 1 year is $120,510 for sure. How would you determine the opportunity cost of capital for this investment?
Business
2 answers:
dangina [55]3 years ago
8 0

Answer:

to the end of the sixth year;

b/ The number of years required before the capital stock exceeds $200 000.

vovangra [49]3 years ago
6 0

Answer:

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Fiedler's contingency theory of leadership effectiveness.

Explanation:

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According to Fiedler's contingency theory of leadership effectiveness, leadership style is fixed and leaders will need to be put into situations that best matches their style.

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The correct answer is letter "C": Ability of a firm to pay the interest on its debt.

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The cash coverage ratio is a metric that measures a company's ability to pay its financial obligations. Generally, the higher the coverage ratio the better for the business to meet its debt obligations. It is best to compare coverage ratios of companies in the same industry or sector in the economy. Comparisons across industries are not useful as companies in different industries use debt in different ways.

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Although the Chen Company’s milling machine is old, it is still in relatively good working order and would last for another 10 y
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Keeping the appropriate cash flow in the cash flow register, using a financial calculator, NPV should be calculated for taking the decision.

Answer: According to the NPV calculated, Chen should buy a new machine.

<u>Explanation:</u>

Cash outflow = $40000

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Place the cash flow on a time line:

0 1 2 10

I 10 I I . . . I

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With a financial calculator, input the appropriate cash flow into the cash flow register, input I/YR = 10, and then solve for NPV. The answer for NPV is $6746.78.

Thus, Chen should buy a new machine.

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3 years ago
foreign project in Hungary and another in Japan had the same perceived value from the U.S. parent's perspective. Then, the excha
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The correct answer is higher than that for the Hungarian project.

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Recently, beagle boutique was attempting to hire a middle manager. they were looking for an intelligent, active, and creative in
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Recently, beagle boutique was attempting to hire a middle manager. they were looking for an intelligent, active, and creative individual. Beagle used the trait approach. This is further explained below.

<h3>What is the trait approach?</h3>

Generally, An individual's attributes are used as indicators of their personality in a trait-based approach.

In conclusion, Beagle Boutique recently tried to find a middle manager. They were seeking someone who was energetic, clever, and creative. Beagle used the trait approach

Read more about The trait approach

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