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inessss [21]
3 years ago
8

Developing the cash flow for each alternative in a study is a pivotal, and usually the most difficult, step in the engineering e

conomic analysis procedure. An integrated approach for developing cash flows includes three major components:
a. A work breakdown structure (WBS) definition of the project.
b. A cost and revenue structure that identifies all the cost and revenue elements involved in the study
c. Estimating techniques (models).

Required:
Discuss the concept of equivalence - if two cash flows (or a series of cash flows) are equivalent for a stated interest rate, and under what circumstances you would be willing to trade one for the other.
Business
1 answer:
Volgvan3 years ago
3 0

Answer:

The concept of equivalence, also known as economic equivalence, describes the reduction of a series of cash inflows (benefits) and cash outflows (costs) to a single point in time, using a single interest rate, which enables the cash flows to be compared or equated.  This implies that while the amounts and timing of the cash flows (both inflows and outflows) may differ, an appropriate interest rate, factoring in the time value of money, will cause one set to be equal to the other.  Therefore, to establish economic equivalence, series of cash flows that occur at different points in time must be equalized using a single interest rate through present value calculations.

Explanation:

The concept of equivalence describes a combination of a single interest rate and the idea of the time value of money.  This combination helps to determine the different amounts of money at different points in time that are equal in economic value, such that a person would not hesitate to trade one for the other.

For example, if the interest rate is 10% in Year 1 and in Year 2 and you are to be paid $1,000 in Year 1, it will not make any difference to you if you are paid $1,100 in Year 2.  This is because, given the prevailing interest rate of 10%, the value you receive in Year 1 and Year 2 are equivalent.

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anzhelika [568]
The answer is for each escrow account.
4 0
3 years ago
A stock is expected to pay $0.70 per share every year indefinitely. If the current price of the stock is $18.90, and the equity
PolarNik [594]

Answer:

$32.72

Explanation:

In this question, we are asked to calculate the price an investor would be expected to pay per share in the next five years.

We proceed as follows to calculate this.

Dividend = $0.70

Share price = $18.90

Hence = Dividend / Share price

= 0.70 / 18.90

= 0.037037

Cost of Equity = 7.9%

Expected growth = 0.037037 + 0.079

= 0.116037

Add one to it = 1 + 0.116037

= 1.116037

Share price after 5 year = $18.90 * (1.116037)^5 = $32.7231

5 0
3 years ago
Fernando, a production manager at wind chimes inc., thinks subordinates are unreliable sources of performance appraisal informat
sammy [17]
These were the choices that I have found based on the question. 
A. Jose is right because subordinates often have reliable information about a manager’s behavior toward employees.
B. Fernando is right because subordinates are often willing to say negative things about the person to whom they report.
C. Jose is right because when feedback forms need subordinates’ names on them, the subordinates tend to give lower ratings to the manager.
D. Fernando is right because when managers receive ratings from their subordinates, the employees have less power.
<span>E. Jose is right because subordinate evaluations are most appropriate for strategic purposes.

I believe the answer is E. since subordinates know if the managers are doing their job on being with the company. They are the first-hand information because they are directly managed by their managers. And the effectivity of the subordinates on their roles relies on their manager. Good management is evident if the subordinates have well-disseminated information and function on their specific roles which are all important small or big roles contribute to overall performance. Thus, good performance of subordinates has a reflection of how their manager does his/her work.</span>
6 0
3 years ago
Organic Beauty, a company manufacturing organic cosmetics, body care products, and fragrances, doesn't want to pay the expensive
Damm [24]

Answer:

Consumer pull caused a company to change its practises.

Explanation:

Consumer pull marketing is when a company devices several means to get customers to buy its products. The aim is to increase product demand, win and retain customer loyalty. Unlike consumer push which is a method used to dispose already existing products by bringing them to consumers ; consumer pull attract buyers to its product.

Generally, most companies uses several advertising mode like word of mouth referrals, placement of a product in a strategic place, sales promotion, blogs etc to stimulate the demand for their products since they know customers are looking for products that would meet or suit their need but needed to be attracted to the solution offered by the company.

Morever, the cost expended on consumer pull marketing is way higher before it becomes a brand and household name among consumers. As in the case above, the celebrities have influence on consumers demand for the products even though they have interest in purchasing them hence result to fall in market share.

Example of consumer pull marketing is children wares. Companies would get the wares advertised through various channels such that children and parents becomes attracted to them. Once they are attracted, demand for these wares will increase and retailers would also want to stock up their shops with these wares.

The whole process of the above example is called consumer pull because the company has been able to get customers to buy its products.

4 0
3 years ago
How do I cite this page.
Otrada [13]

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5 0
3 years ago
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