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Marta_Voda [28]
3 years ago
14

You own factory A and factory B. The next cash flow for each factory is expected in 1 year. Factory A has a cost of capital of 3

.5 percent and is expected to produce annual cash flows of $19,300 forever. Factory B is worth $545,000 and is expected to produce annual cash flows of $19,900 forever. Which assertion is true
Business
1 answer:
ziro4ka [17]3 years ago
6 0

Answer: See Explanation

Explanation:

First, we have to calculate the worth of factory A which will be:

= Cash flow / Cost of capital

= $19300 / 3.5%

= $19300 / 0.035

= $551428.57

= $551429

Cost of capital of Factory B = Cash flow / Worth

= $19,900 / $545,000

= 0.0365

= 3.65%

Cost of capital of Factory A = 3.5%

Cost of capital of Factory B = 3.65%

Worth of factory A = $551429

Worth of Factory B = $545,000

Therefore, factory A is more valuable than Factory B and Factory B is more risky than Factory A.

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How might a technology company like apple ensure that it behaves in a socially responsible way toward its customers? by protecti
Serhud [2]

The correct answer is the first option. By protecting the privacy of personal information collected on its website a company like apple would be behaving in a socially responsible way towards its customers. Technology companies like apple have a responsibility to protect the personal information of its customers, if this wasn't the case then people would not buy their products as they would not have any faith in the company.

7 0
3 years ago
Read 2 more answers
Chiquita produces bananas for an average explicit cost of $0.25 per banana and sells 1 million bananas per week for a price of $
Sergio039 [100]

Answer:

Option (A) is correct.

Explanation:

Given that,

Implicit costs per week = $200,000

Average explicit cost per banana = $0.25 per banana

Per week bananas sold = 1 million

Explicit cost = Average explicit cost per banana × No. of banana sold

                    = $0.25 × 1,000,000

                    = $250,000

Total revenue = No. of banana sold × Selling price of each banana

                        = 1,000,000 × $0.50

                        = $500,000

Accounting profit = Total revenue - Explicit cost

                             = $500,000 - $250,000

                             = $250,000

Economic profit:

= Total revenue - Explicit cost - Implicit costs

= $500,000 - $250,000 - $200,000

= $50,000

5 0
3 years ago
What is an agricultural marketing cooperative that helps members sell their products?
Blizzard [7]

This question provides the defition for a producer cooperative

7 0
4 years ago
A self-employed person deposits $2,000 annually in a retirement account (called a Keogh or H.R. 10 plan) that earns 8 percent. U
lana [24]

Answer:

$146,212.00  

Explanation:

PMT which is the annual savings is $2000

Rate  is 8%

The annual savings would last for 25 years(65-40)

FVIFA FACTOR=(1+r)^n-1/r

r=8%

n=25

FVIFA FACTOR=(1+8%)^25-1/8%

FVIFA FACTOR=(1.08)^25-1/0.08

FVIFA FACTOR=(6.848475196-1)/0.08=73.106

Amount in the account at retirement=PMT*FVIFA FACTOR

Amount in the account at retirement=$2000*73.106=$146,212.00  

6 0
3 years ago
A firm practicing third-degree price discrimination may:
nata0808 [166]

Answer:

(B) I and II 

Explanation:

Price discrimination is when a producer charges different prices for his good or service.

Third degree price discrimination is when consumers are charged different prices for the same good due to certain factors. E.g. age, gender, location.

Second degree price discrimination is when consumers who buy in bulk are given discounts.

First price discrimination is when consumers are charged different prices according to their willingness to pay. Example of first price discrimination is initially charging high prices and then reducing the price over time to sell to the more price-sensitive consumers. 

I hope my answer helps you.

6 0
3 years ago
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