Answer:
Simple payback is 4 years
Total discounted Payback is more than the 5 years which is the payback cutoff period.
Explanation:
Payback period is the time period in which the project recovers the initial cost incurred. Lower the payback period the more beneficial will be the project.
Simple payback = $100,000 / $25,000 = 4 years
Discounted Payback
Discounted payback is calculated by using the present value of future cash flows.
Total discounted cash flows = 22935.78 + 21042.0 + 19304.59 + 17710.63 + 16248.28 = 97,241.28
As sum of all cash flows are less than the initial investment so, total discounted Payback is more than the 5 years which is the payback cutoff period.
Answer:
The residuary clause
Explanation: As Mary would like to leave the balance of her estate to her brother tom this will fall under the residuary clause.
Answer:
Laura should focus on purchasing Index Mutual Funds and Exchanged-Traded Funds.
Explanation:
Laura should, amongst many investments’ options, focus on two particular types of investments: the first one is called index mutual funds, which have a much lower fee than mutual funds, giving the investor an investment with lower cost while having a fund that works in many ways equal to mutual funds. The second one should be exchange-traded funds, particularly because those funds are based on commissions, making it possible to charge lower fees than mutual funds.
Four requirements for a valid contract are an offer, acceptance by the other party of the offer, a mutual agreement or meeting of the minds of the contracting parties and a valid consideration.
Answer:
The second project should be chosen. Because the present value of the second project is greater than that of the first project.
Explanation:
The project that should be chosen can be determined by comparing the present value of both projects.
Present value is the cash flows from a project discounted at the discount rate.
Present value can be found using a financial calculator;
For project 1,
Cash flow each year from year one to six is $52,000
Discount rate = 15%
Present value =$196,793.10
For project 2,
Cash flow each year from year one to eight is $48,000
Discount rate = 15%
Present value =$215,391.43
The second project would be chosen because its present value is greater than that of the first project.
I hope my answer helps you
