1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
SSSSS [86.1K]
3 years ago
5

The Seattle Corporation has been presented with an investment opportunity which will yield cash flows of $30,000 per year in Yea

rs 1 through 4, $35,000 per year in Years 5 through 9, and $40,000 in Year 10. This investment will cost the firm $150,000 today, and the firm's cost of capital is 10 percent. What is the payback period for this investment?
Business
1 answer:
Sergio [31]3 years ago
3 0

Answer:

payback period = 4.86 years

Explanation:

given data

cash flows year 1 = $30,000 per year

cash flows year 5 = $35,000 per year

cash flows year 10 = $40,000 per year

investment cost = $150,000

to find out

payback period for this investment

solution

we get here accumulated inflows will be

accumulated inflows year 4 =  $30,000 × 4

accumulated inflows year 4 = $120,000

and

accumulated inflows year 5 = $120,000 + $35,000 = $155,000

and Initial investment = $150,000

so payback period will be

payback period = 4 years + (150,000 - 120,000)  ÷ 35,000 × 365 days

payback period = 4 years and 313 days

payback period = 4.86 years

You might be interested in
Is it possible that a person might be an effective leader in one situation but not in another
amid [387]

Yes, effective leadership involves chosing the right style for the situation. Every leadership situation has different variables and followers. Think of a coach that fails with one team and wins with another.

6 0
3 years ago
As a firm's sales grow, its current assets also tend to increase. For instance, as sales increase, the firm's inventories genera
yanalaym [24]

Answer: True

Explanation:

Current assets are the assets that a company had and which are expected to be either used or sold over the next year. Examples of current assets are cash, cash equivalents, stock inventory, accounts receivable, marketable securities, and other liquid assets.

It should be noted that when the sales of a from continue to grow, the current assets of such company also increases. An example is when there is an increase in the sales increase, this.will also have an impact on the firm's inventories as there will be an increase.

6 0
3 years ago
Using both the supply and demand for bonds and liquidity preference framework, show how interest rate are affected when the risk
nignag [31]

Answer:

Yes, the results are the same in both frameworks. Please see below for explanation.

Explanation:

With regards to the bond supply and demand framework, people will look to buy more bonds since they are more wealthy now. Hence, the supply of bonds will increase. The supply curve and the demand curve will both move to the right, with the former shifting more than the latter. The equilibrium interest rate will increase.

With regards to the liquidity preference framework, once the economy experiences a positive shift, there will also be an increase in the demand for money. People will make an increased number of transactions as well and hence, the demand curve will move towards the right. The equilibrium interest rate will rise too.

4 0
2 years ago
A new competitor enters the industry and competes with a second​ firm, which had been a monopolist. The second firm finds that a
Alisiya [41]

Answer: More elastic; Lower

Explanation:

Before the entry of a new firm, there is only one firm exist in the market and that single firm is experiencing a monopoly power. But when there is a entry of its competitor then as a result second firm have to reduce their prices of the products as demand is elastic. We know that market is very sensitive to the prices. This fall in prices will lead to increase the demand for the products but with the lower prices, the marginal revenue of the second firm will be more elastic because of the lower prices.

7 0
3 years ago
If a for-profit firm that has paid out record bonuses to its executive every year while underfunding contributions to unionized
kondor19780726 [428]

Answer:

B. Take defensive strike action.

Explanation:

One of the functions of a trade union or labor union is to protect the interest of its members in a workplace. So, if a profit firm treats its workers poorly by underfunding contribution to workers pension as required under a collective agreement while paying out record bonuses to executives then attempts attempt to reduce workers pension entitlements, the union members will most likely embark on an industrial strike.

The aim of the strike is to halt daily operations of the firm until their demands are heard and an agreement is reached. The members of the union were treated unfairly by the firm by not honoring their pension funding agreement and to make matters worse the decided to try and reduce the workers pension.

If the members don't embark on the industrial strike, the firm would reduce their pension benefits. The most likely action of the union members would be to embark on a defensive strike action to protect themselves.

7 0
2 years ago
Other questions:
  • Singal Inc. is preparing its cash budget. It expects to have sales of $30,000 in January, $35,000 in February, and $20,000 in Ma
    9·2 answers
  • A factory machine was purchased for $393000 on January 1, 2018. It was estimated that it would have a $74000 salvage value at th
    10·1 answer
  • 1. Assume that the money demand function is (M / P)d = 2,200 – 200r, where r is the interest rate in percent. The money supply M
    11·1 answer
  • A special repair to a machine will extend the life of the machine an additional four years beyond the original estimated life of
    6·1 answer
  • Allocating funds to promotion whereby the company determines its promotion objectives, outlines the tasks to accomplish these ob
    7·1 answer
  • Larry's parents divorced when he was 5. His father moved out of the area, and his mother is kept busy with trying to keep a roof
    15·1 answer
  • Justice enterprises has current assets of $593 million and current liabilities of $316 million. what is their current ratio?
    5·1 answer
  • Wanda’s will power is 25% in convincing people to vote for her. She needs 50% of the vote to win. Assuming everyone votes, in or
    5·1 answer
  • On January 1, 2012, Piper Co., purchased a machine (its only depreciable asset) for $600,000. The machine has a five-year life,
    13·1 answer
  • Budgeted overhead for Gallo, Inc. at normal capacity of 60,000 direct labor hours is $3 per hour variable and $2 per hour fixed.
    14·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!