Yes 1 -5 then tou add 1 +5
The NPV is positive, therefore, this order can be placed.
<h3>How to calculate the NPV?</h3>
The calculation of probability of default will be:
= 1 / 200 = 0.005
We use NPV formula to find out whether the order should be filled or not
NPV = -Variable cost per unit +[(1-π)(price of equipment/1+percentage of return)]
= -$1.6 million +[(1-0.005)($1.725m/1.018)]
= -$1.6m + $1.6860
= 0.0860 million
As NPV is positive this order can be placed.
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Answer:
8
Step-by-step explanation:
Answer:
A. TRUE.
Step-by-step explanation:
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