Answer:
You should choose the project with the higher NPV even if it has the lower IRR.
Explanation:
When you have to choose between two mutually exclusive projects, the net present factor (NPV) is the item to consider. You should always choose only projects with a positive NPV, and if both have positive NPVs, then choose the one with the highest. The internal rate of return (IRR) has a serious flaw, it assumes that cash flows are reinvested at the same rates, and that is usually not true in the real world. The IRR is subject to reinvestment risk, which means that it is likely that future cash flows generated by the project will not generate the same rate of returns.
Answer:
accrued interest for the note: 307,500
Explanation:
installment of 2,050,000
outstanding principal 4,100,000
Accrued interest from October to June 30th: 9 months
To get the interest we use the folowing formula:
principal x rate x time = interest
Being time and rate express in the same metric that is, the rate is annual therefore, time is expressed as the portion of a year.
4,100,000 x 0.10 x 9/12 = 307,500
The business partnership of Richard Warren Sears and Alvah Curtis Roebuck establishing their American department store chain "Sears" had its humble beginnings. Both of these people started the business by relying on selling their products just by using an electronic mail until their business started to expand.