1.A realistic situation in which can cause someone to use money from a financial reserve is to payoff a medical bill. Another situation would be if say, you had to pick up and move. You would need enough money to not only purchase your residence, but also movers, necessities, and they deposit.
2. The financial reserve should have enough money to last a at least 6 months. There should definitely be enough money to purchase food and necessities. Depending on how big your family is and how much you spend affects the duration of the amount of funds. Also what you choose to spend your money on is a big key factor.
3. I would rather have a compound interest when it comes to a savings account.An account with simple interest will take money from you, rather than save it. When it comes to putting money into an account that offers interest, you want to get the highest interest rate possible, so that your money grows as fast as possible. A compound interest will “compact” your money as much as possible, saving you more.
Answer: Option C
Explanation: A company operating in countries other than its home country is called multinational corporations. These entities operate their business in several different countries with the objective of profit maximization.
These entities control their business in foreign countries from their head quarters in their home country. Thus, in case the company did something illegal or unethical then the government can expropriate their assets without any compensation.
Thus, the correct option is C.
Answer:
2 years
Explanation:
Payback can be calculated by identifying net savings of employing this new system.
Net savings = Savings from reduced labor costs - Annual license and maintenance fee
Net Savings = (35,000 * 3) - 25,000 = $80,000 saving / year
Initial outlay = $160,000
Payback = initial outlay / savings per year = 160000 / 80000 = 2 years
So it takes 2 years to recover the initial outlay.
Hope that helps.
Answer:
The net present value of the machine = $ 1590
Explanation:
Solution
The first step is to compute the present value of annual cash inflows as shown below:
The present value of the inflow of cash = (Annual inflow of cash * PVIFA rate, period)
which is
= $11,000 * PVIFA 12%, 4
= $11,000 * 3.0373
= $ 33,410
Note: the present value of inflow of cash has been computed by multiplying Annual cash inflows and Cumulative factor of 12% and 4 years. Annual cash inflow is $11,000 and from the table of PVIFA rate for a 4 periods at 12% discount rate is 3.0373.
Next step is to compute the Net value as shown in the equation below:
Net present value = (present value of inflow of cash - Investment)
which is
=$ 33, 410 - $ 35,000
= $1590
The net present value is = $ 1590
Note: Net present value has been computed be subtracting investment from the present value of inflow of cash.
The opening investment is $35,000 and the present value of inflow of cash is $33,410. since the initial investment is more than the present value of cash inflows, the net present value is seen as negative.
