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Butoxors [25]
2 years ago
15

A firm with a WACC of 10% is considering the following mutually exclusive projects:

Business
1 answer:
8090 [49]2 years ago
8 0

Answer:

Option e is the correct answer.

As the NPV of project 1 is higher than Project 2's NPV, Project 1 is recommended,

Explanation:

To determine which project to choose, we will calculate the net present value (NPV) of both projects and the project with the higher NPV will be chosen.

NPV is the present value of the future cash flows inflows expected from the project less any initial cost. The formula for NPV is as follows,

NPV = CF1 / (1+WACC)  +  CF2 / (1+WACC)^2  +  ... +  CFn / (1+WACC)^n  -  Initial outlay

Where,

  • CF1, CF2,... is the cash flow in year 1, Year 2 and so on

NPV - Project 1 = 60 / (1+0.1)  +  60 / (1+0.1)^2  +  60 / (1+0.1)^3  +  

220 / (1+0.1)^4   +  220 / (1+0.1)^5  -  200

NPV - Project 1 = $236.076 rounded off to $236.08

NPV - Project 22 = 300 / (1+0.1)  +  300 / (1+0.1)^2  +  100 / (1+0.1)^3  +  

100 / (1+0.1)^4   +  100 / (1+0.1)^5  -  600

NPV - Project 2 = $126.1861 rounded off to $126.19

As the NPV of project 1 is higher than Project 2's NPV, Project 1 is recommended,

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A A monthly maintenance fee (sometimes called a monthly service fee) is money a bank charges you for working with the company. The fee is usually automatically withdrawn from your account each month. In some cases, you'll pay the fee no matter what. But many banks let you waive the fee if you meet certain requirements.
5 0
3 years ago
Jan pays $70 each month for her auto insurance policy. this regular payment is called a: co-pay, deductible, premium, claim?
sertanlavr [38]
Pretty sure its co-pay. 
i may be wrong, i don't take business yet.
4 0
3 years ago
On December 15, 2021, Rigsby Sales Co. sold a tract of land that cost $3,300,000 four $5,000,000. Rigsby appropriately uses the
Flura [38]

<u>Solution and Explanation:</u>

Installment Receivables (Net) of $2,905,600

Basis  Particulars                                         Debit  Credit

Sale:-  Instalment Receivables  $5,000,000  

         Inventory                                               $3,200,000

 Deferred gross profit                                                  $1,800,000

Payment:-  Cash                         $4,90,000  

Instalment Receivables                                     $4,90,000

Deferred Gross profit                 $165,600  

Realised Gross profit                                              $165,600

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Deferred gross profit ($1,800,000 minus $165,600) = $1,634,400

Instalment Receivables (Net) = $2,875,600

8 0
3 years ago
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dezoksy [38]

Answer:

The answer is by charging lower price on remaining three ticket (any ticket price above $0)

Explanation:

As company is not giving any refreshment so it not incurring any variable cost. So here sales is equal to contibution and every single dollar revenue generated is a contribtion towards fixed cost and targeted profit. So by decreasing sale price on remaining tickets company will be able to sell them and this sale will result in more profit to the company.

8 0
3 years ago
Which type of credit is used for utilities? installment credit secured credit card service credit unsecured credit card
balandron [24]
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With service credit you can make it easier to pay utility bills such as gas, electricity, water, phone services, etc under one account

hope this helps
5 0
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