Answer:
C. The country will have a smaller marginal return from bricks.
Explanation:
This is because it will lead to an increased production in the economy and ppf will shift outward.
The market for carbon allowances is set by the regulatory authority.
Answer:
$100 favorable
Explanation:
The computation of the material purchase price variance is shown below:
= Actual Quantity purchased × (Standard Price - Actual Price)
= 2,000 pounds × ($1.60 - $1.55)
= 2,000 pounds × $0.05
= $100 favorable
Simply we took the difference between the standard and the actual price, and then multiply it by the actual quantity purchased
Answer:
Gain= $850
Explanation:
Giving the following information:
Purchase price= $33,000
Useful life= 4 years
Residual value= $2,000
Sale= $10,600.
<u>First, we need to calculate the annual depreciation:</u>
Annual depreciation= (original cost - salvage value)/estimated life (years)
Annual depreciation= (33,000 - 2,000)/4= $7,750
<u>Now, we can calculate the accumulated depreciation:</u>
Accumulated depreciation= 7,750*3= $23,250
<u>To calculate the gain or loss, we need to use the following formula:</u>
Gain/loss= selling price - book value
Book value= purchase price - accumulated depreciation
Book value= 33,000 - 23,250= $9,750
Gain/loss= 10,600 - 9,750
Gain= $850
Answer:
future worth:
project A 11,615.26
project B 12,139.18
It should choose project B as their future value is greater
IRR of project A: 13.54%
We should remember that the IRR is the rate at which the net value is zero thus, equals the inflow with the cash outlay
It is calculate with excel or financial calculator due to the complex of the formula.
Explanation:
Project A
We calculate the future value of the cash flow per year and cost as we are asked for future value. The salvage value is already at the end of the project life so we don't adjust it.
Revenues future value
C 15,000
time 8
rate 0.12
FV $184,495.3970
Expenses future value
C 3,000
time 10
rate 0.12
FV $52,646.2052
Cost future value
Principal 40,000.00
time 10.00
rate 0.12000
Amount 124,233.93
Net future worth:
-124,233.93 cost - 52,646.21 expenses + 184,495.40 revenues + 4,000 salvage value
future worth 11,615.26
Project B
cost:
Principal 60,000.00
time 10.00
rate 0.12000
Amount 186,350.89
expenses 52,646.21 (same as previous)
revenues
C 24,000
time 7
rate 0.12
FV $242,136.2815
TOTAL
242,136.28 + 9,000 - 52,646.21 - 186,350.89 = 12,139.18
Internal rate of return of project A
we write the time and cash flow for each period.
Time Cash flow
0 -40,000
1 -3,000
2 -3,000
3 12,000
4 12,000
5 12,000
6 12,000
7 12,000
8 12,000
9 12,000
10 16,000
IRR 13.54%
Then we write on excel the function =IRR(select the cashflow)
and we got the IRR of the project