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REY [17]
3 years ago
12

Brad's Diner is expanding and expects operating cash flows of $32,000 a year for 4 years as a result. This expansion requires $3

9,000 in new fixed assets. These assets will be worthless at the end of the project. In addition, the project requires $3,000 of net working capital throughout the life of the project. What is the net present value of this expansion project at a required rate of return of 12 percent
Business
1 answer:
lawyer [7]3 years ago
5 0

Answer: $57,101.73

Explanation:

First find the present value of the cash inflows. The $32,000 is a constant payment so is an annuity. The net working capital will be realized at the end of the project as well.

Present value of cash inflows = (32,000 * Present value interest factor of an annuity, 4 years, 12%) + 3,000/ (1 + 12%)⁴

= (32,000 * 3.0373) + 1,906.55

= ‭$99,101.73

NPV = Present value of inflows - Outflows

= ‭99,100.15‬ - (39,000 + 3,000)

= $57,101.73

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Mnenie [13.5K]

Answer:

purchase; increase.

Explanation:

Suppose that the current federal funds rate is above the federal funds target rate. In order to lower the federal funds rate the Fed will purchase securities on the open market which will increase the supply of reserves in the market for reserves, pushing the rate closer to the target rate.

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Katy, a manager, is evaluating her team members by rating them from best to worst. This rating is based on their overall perform
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Answer:

a. The simple ranking method

Explanation:

The simple ranking method -

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3 years ago
What would happen if one of the factors of production was missing
dmitriy555 [2]
Production would cease. i hope this helps you (;
7 0
3 years ago
Read 2 more answers
Dry cleaning companies often charge more for women's blouses than men's shirts. They claim that this is because women's blouses
natita [175]

Answer:

Option (a) is correct.

Explanation:

This is a case of third degree price discrimination.

There are three types of price discrimination are as follows:

(a) First degree price discrimination

(b) Second degree price discrimination

(c) Third degree price discrimination

In a third degree price discrimination, a company or a firm can charge different prices for different groups of people but charge the same price within the group.

In our case, Dry cleaning companies charge more prices from the women than from the men but they can charge the same price from all the women.

7 0
3 years ago
Alison's dress shop buys dresses from McGuire Manufacturing. Alison purchased dresses from McGuire on July 17 and received an in
gavmur [86]

Answer:

$5,940

Explanation:

<em><u>Purchase under Net method</u></em><em>:</em>

= Gross profit - Discount

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= $5,940

Therefore, Alison should record the purchase at $5,940.

3 0
3 years ago
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