Answer:
Option e is the correct answer.
As the NPV of project 1 is higher than Project 2's NPV, Project 1 is recommended,
Explanation:
To determine which project to choose, we will calculate the net present value (NPV) of both projects and the project with the higher NPV will be chosen.
NPV is the present value of the future cash flows inflows expected from the project less any initial cost. The formula for NPV is as follows,
NPV = CF1 / (1+WACC) + CF2 / (1+WACC)^2 + ... + CFn / (1+WACC)^n - Initial outlay
Where,
- CF1, CF2,... is the cash flow in year 1, Year 2 and so on
NPV - Project 1 = 60 / (1+0.1) + 60 / (1+0.1)^2 + 60 / (1+0.1)^3 +
220 / (1+0.1)^4 + 220 / (1+0.1)^5 - 200
NPV - Project 1 = $236.076 rounded off to $236.08
NPV - Project 22 = 300 / (1+0.1) + 300 / (1+0.1)^2 + 100 / (1+0.1)^3 +
100 / (1+0.1)^4 + 100 / (1+0.1)^5 - 600
NPV - Project 2 = $126.1861 rounded off to $126.19
As the NPV of project 1 is higher than Project 2's NPV, Project 1 is recommended,
It is Based on The <u>Risk</u><u> </u><u>Level</u><u>.</u><u> </u>
If sales volume increases and all other factors remain constant, then the Margin of safety will increase
Explanation:
The margin for safety (MOS) is described as an overall excess of current or expected revenue, expressed either in terms of currency or in units, or as a percentage of total revenues.
One of the main ways to increase the safety margin is through increasing the gross value per unit (if business conditions are favourable) and by reducing the variable cost per unit of the good. This can be accomplished by rising selling costs.
Answer:
B. Reduce the Money Market Fund allocation by 30% (to 10%) and put the released funds in AAA-rated corporate bonds
Explanation:
First of all, since the investor is risk averse and cannot afford to lose money on any risky investment, she should change the mix of her investment portfolio but without increasing risks. Corporate bonds that are AAA-rated carry a very low risk and pay a little higher than money market funds. So a small decrease in money market fund assets and an increase in AAA-rated bonds should yield a slightly higher return.
Investing in equities would be too risky and US Treasuries pay even less interests than money market funds.
Answer:
Have been mechanical weathering to prevail.
A chilly, humid atmosphere at high altitude, where freezing and thawing are prevalent.
An uplifting dry cold atmosphere wherein material is eliminated out of an inherent pluton / intrusive igneous rock by erosion.
Weathering of chemicals would prevail.
A warm atmosphere with several brief but intense rain storms. A warm and humid atmosphere with intense rainfall that happens all year round.
A warm and wet atmosphere with annual precipitation above normal and many turbulent seasons annually.
