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Sunny_sXe [5.5K]
3 years ago
8

Labeau Products, Ltd., of Perth, Australia, has $21,000 to invest. The company is trying to decide between two alternative uses

for the funds as follows:
Invest in Invest in
Project X Project Y
Investment required $ 21,000 $ 21,000
Annual cash inflows $ 8,000
Single cash inflow at the end of 6 years $50,000
Life of the project 6 years 6 years
The company’s discount rate is 18%.
Required:
Determine the net present values. (Any cash outflows should be indicated by a minus sign.
Business
1 answer:
VLD [36.1K]3 years ago
7 0

Answer:

Project X = $6,980.82

Project Y = - $2,478.42

Explanation:

The Present value is the price today of future cash flows and is calculated as follows :

Project X

($21,000) CF 0

$8,000    CF 1

$8,000    CF 2

$8,000    CF 3

$8,000    CF 4

$8,000    CF 5

$8,000    CF 6

I/YR = 18%

Therefore, NPV is $6,980.82

Project Y

($21,000) CF 0

$0    CF 1

$0    CF 2

$0    CF 3

$0    CF 4

$0    CF 5

$50,000    CF 6

I/YR = 18%

Therefore, NPV is - $2,478.42

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Which common saying best captures the concept of incentives (specifically, positive and negative incentives), which is one of th
lesantik [10]

Answer:

If the carrot doesn't work, try the stick.

Explanation:

This phrase clearly describes how advertising and promotions work:

If the carrot doesn't work: the tempting carrot refers to advertisement, and the doesn't work part refers to advertisement that is not able to change consumer habits and increase sales.

Try the stick refers to offering promotions or positive incentives like discounts or larger packs.

Another example would be the penalty imposed on individuals that refused to purchase health care insurance (eliminated in 2018). The carrot were the benefits obtained by having health insurance and the stick was the negative incentive (or penalty) imposed as a fine for those who didn't purchase health insurance.

6 0
2 years ago
Gabuat Corporation, which has only one product, has provided the following data concerning its most recent month of operations
DochEvi [55]

Answer:

c) $ 24,200

Explanation:

Computation of Total Period costs

Fixed selling and Administrative expenses                       $  8,800

Variable Selling and Administrative costs

$ 7 per unit * 2,200 units sold                                            <u>$ 15,400</u>

Total period costs                                                                $ 24,200    

The fixed manufacturing overhead is part of manufacturing costs so not considered.

The variable selling and administrative costs are based on units sold and not units produced.

5 0
3 years ago
Randall's has 28,000 shares of stock outstanding with a par value of $1 per share. The market value is $13 per share. The balanc
a_sh-v [17]

Answer: $38,200

Explanation:

There are 28,000 Outstanding shares with a $13 market value.

That means that in total they are valued at,

= 28,000 * 13

= $364,000

The firm announced a 15% dividend so we take 15% of the total amount.

= 15% * 364,000

= $54,600

$54,600 is the total amount they will pay as dividends.

Dividends are taken from the Retained Earnings meaning that the balance in Retained earnings is therefore,

= $92,800 - $54,600

= $38,200

$38,200 will be the balance in the retained earnings account after the dividend.

3 0
3 years ago
The budgeted income statement presented below is for Burkett Corporation for the coming fiscal year. Compute the number of units
juin [17]

Answer:

see explanation

Explanation:

Units to achieve target profit = Target Profit + Fixed Cost ÷ Contribution margin ratio.

where ,

Contribution margin ratio = Contribution ÷ Sales                                            

5 0
3 years ago
A company has sales of $729,000, costs of $355,000, depreciation expense of $50,000, interest expense of $28,000, and a tax rate
Anarel [89]

Answer:

The addition to retained earnings is $121,400.

Explanation:

Net Income = $192,400

Dividend = $71,000

use Following formula to calculate the addition to retained earning

Addition to Retained Earning = Net Income - Dividend paid

Addition to Retained Earning = $192,400 - $71,000

Addition to Retained Earning = $121,400

So, the addition to retained earnings is $121,400

3 0
3 years ago
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