Suppose Kim is willing to pay $5 for her first ice cream sundae, $4 for a second ice cream sundae, and $2 for a third ice cream
1 answer:
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Answer:
Total cost for 316 returns $3,962
Total cost for 408 returns $4,974
Total cost for 524 returns $6,250
Explanation:
The total cost incurred by Pharoah with the Mega Tax software is given by the fixed cost of $486, referring to the annual fees, added to the cost per tax return of $11 multiplied by the volume of returns filed (n):
i. if 316 returns are filed? (n = 316)
ii. If 408 returns are filed? (n = 408)
iii. If 524 returns are filed? (n = 524)
Total cost for 316 returns $3,962
Total cost for 408 returns $4,974
Total cost for 524 returns $6,250
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Answer:
B. Choose investment A
Explanation:
Looking at the investment cash flows for the four years, investment A maximises the shareholders wealth mostly because it covers cost of investment quicker than other investments B, C and D. It begins with the highest cash flow return, for first and second year therefore pay back period is lower with investment A. Also net present value is higher.
