Answer:
It will take 1 year and 307 days to cover the initial investment.
Explanation:
Giving the following information:
Initial investment= $6,900
Cash flows:
Cf1= $4,200
Cf2= $5,100
Cf3= $6,300
Cf4= $5,500
Discount rate= 15%
<u>The payback period is the time required to cover the initial investment. We need to discount each cash flow.</u>
<u></u>
Year 1= 4,200/1.15 - 6,900= -3,247.83
Year 2= 5,100/1.15^2 - 3,247.83= 608.50
<u>To be more accurate:</u>
(3,247.83 / 3,856.33)*365= 307 days
It will take 1 year and 307 days to cover the initial investment.
Answer:
(i) 900 CDs
(ii) Greater than; $1,650
Explanation:
(1) Break-event point will be when the contribution margin from total sales is equal to fixed costs,
Contribution Margin = Selling price - variable cost
= $(21.5 - 9.5)
= $12
Contribution Margin *Number of CDs sold = $10,800
Break-even point for Studio A = 10,800 ÷ 12
= 900 CDs
(2) Studio A would be more profitable when the extra profit earned from per unit sale of CD exceeds the extra fixed cost given in Studio A.
Extra Contribution margin in Studio A = $(12-10)
= $2
Extra Fixed cost in Studio A = $(10,800 - 7,500)
= $3,300
Studio A should be chosen if sales is greater than (3300/2) = $1,650.
When you are considering a financial institution you should consider what type of accounts you want to have, how much money you have and if you want to invest. Different financial institutions offer different rates and benefits for their members so it makes sense to figure out your options based on what you want in return.
The real money demand is equal to $2,60,000
Money demand/ P = 1000+0.2Y -1000i
Money demand/200= 1000+0.2(2000)-1000(0.1)= 1000+400-100
=1300
Money demand /200 = 1300
Money demand = $1300*200
= $2,60,000
Money demand is the demand for real cash balances as people hold onto money to purchase goods and services. The higher the price level, the more money you need to buy a certain amount of goods.
Learn more about Money demand here:brainly.com/question/24109874
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