Answer:
cognitions
Explanation:
The cognitions component of attitude refers to the opinion a person has about an object. According to this, the answer is that the statement "Automobiles manufactured by this brand are the safest" is an example of the cognitions component of attitude as the sentence shows the belief the person has about that brand.
Wentworth's Five and Dime Store has a cost of equity of 11.4 percent. The company has an aftertax cost of debt of 5 percent, and the tax rate is 35 percent. If the company's debt–equity ratio is .74, what is the weighted average cost of capital?
Answer:
WACC = 6.66 %
Explanation:
Weighted average cost of capital is the average cost of all of the long-term types of finance used by a company weighted according to the that amount of finance used in relation to the total pool of fund
WACC = (Wd×Kd) + (We×Ke)
After-tax cost of debt = Before tax cost of debt× (1-tax rate)
Kd-After-tax cost of debt = 5%
Ke-Cost of equity = 11.4%
Wd-Weight f debt -74%
We-Weight of equity = 26%
WACC = (0.74× 5%) + (0.26 × 11.4%) = 6.66 %
WACC = 6.66 %
Kalanick’s attributes include focus and perseverance. These attributes are most closely related to which of the following?
a. high extroversion
b. low emotional stability
c. high agreeableness
d. high openess to experience
e. proactive personality
Answer: proactive personality
Explanation:
Proactive personality has to do with the individuals who identify opportunities, and also show perseverance and initiative and wait till there's a meaningful change regarding a particular situation.
Since Kalanick’s attributes include focus and perseverance. The attributes are most closely related to proactive personality.
Jax Recording Studio purchased $8,200 in electronic components from Music World. Jax signed a 90-day, 10% promissory note for $8,200. Music World's journal entry to record the sales transaction is:
Answer:
World's journal entry to record the sales transaction is:
Note Receivable ; Jax Recording Studio $8,200 (debit)
Sales Revenue $8,200 (credit)
Explanation:
Music World is the seller and must recognize Revenue following the sale.The Revenue is initially recognized at the value of sale of $8,200. Music World must also recognize an Asset on the promissory note signed to the value of $8,200.
based on the characteristics of constructive conflicts, which of the following would help a manager create constructive conflicts during a debate?
1. Support the weaker members during a debate
2. Explain conflict in terms of interpersonal incompatabilities
3. Support the stronger memebrs during the debate
4. Keep the debate focused on the issue
5. Maintain competitive oreientation on the debate
Answer:
The correct answer is: 4. Keep the debate focused on the issue
Explanation:
A constructive conflict can be understood as different points of view that arise in an organization on the same issue.
Therefore, it can be a great way for the organization to enrich itself with new ideas, thoughts and different ways of carrying out actions that will help the organization to achieve its objectives and goals.
Therefore, the most suitable alternative for building a constructive conflict during a debate is for the manager to always focus on the issue discussed, and not for the debate to turn to support due to interpersonal relationships.
Suppose annual inflation rates in the U.S. and Mexico are expected to be 6% and 80%, respectively, over the next several years. If the current spot rate for the Mexican peso is $.005, then the best estimate of the peso's spot value in 3 years is Group of answer choices $.00276 $.01190 $.00321 $.00102
Answer:
$.00102
Explanation:
The forward peso's spot value in 3 years can be computed using the below formula:
forward exchange rate=current spot rate*(1+US inflation)^3/(1+Mexican inflation)^3
current spot rate=$.005,
US inflation rate is 6%
Mexican inflation rate is 80%
forward exchange rate=$.005,*(1+6%)^3/(1+80%)^3
forward exchange rate(in 3 years)=$0.00102
Elaine takes out a $100,000 mortgage on December 1, 1997. Elaine will repay the mortgage over 20 years with level monthly payments at an effective annual interest rate of 8%. The first payment is due January 1, 1998. After making her 120th payment, Elaine does not make any new payments for the entire next year. Elaine starts making revised monthly payments, of amount P, beginning January 1, 2009. The amount P is such that Elaine will pay off the loan in the original, 20-year term—that is to say, her last payment will be due December 1, 2017. Determine P.
Answer:
I prepared an amortization schedule using an excel spreadsheet. The original monthly payment was $836.44. After the 120th payment, the remaining principal balance was $68,940.64. Since she didn't pay anything for 1 year, the new principal balance will be $68,940.64 x (1 + 8%) = $74,455.89
I prepared another amortization schedule for the remaining 9 years, and the monthly payment is $969.32. She will pay off the loan in 108 months.
When entering a foreign market, Montain stream brewery purchases a manufacturing plant and sets up a new brewery. Instead of using their signature name, the product produced in the foreign market is labeled as “Everest Prak Brew” This is an example of?
it's an example of brand localization
A firm pays a current dividend of $1.00 which is expected to grow at a rate of 5% indefinitely. If current value of the firm’s shares is $35.00, what is the required return based on the constant growth dividend discount model (DDM)?
Answer:
8%
Explanation:
A firm pays a current dividend of $1
The growth rate is 5%
= 5/100
= 0.05
The current value of the firm's share is $35
Therefore, the required return using the constant growth discount dividend model can be calculated as follows
K = 1×(1+0.05)/35 + 0.05
K= 1×1.05/35 + 0.05
= 1×0.03 + 0.05
= 0.03 + 0.05
= 0.08×100
= 8%
Hence the required return is 8%
Cash balance, September 1 (from a summer job) $7,560
Purchase season football tickets in September 100
Additional entertainment for each month 260
Pay fall semester tuition in September 4,100
Pay rent at the beginning of each month 370
Pay for food each month 210
Pay apartment deposit on September 2 (to be returned December 15) 500
Part-time job earnings each month (net of taxes) 940
Personal Budget:
At the beginning of the 2016 school year, Katherine Malloy decided to prepare a cash budget for the months of September, October, November, and December. The budget must plan for enough cash on December 31 to pay the spring semester tuition, which is the same as the fall tuition. The following information relates to the budget:
Required:
Prepare a cash budget for September, October, November, and December.
Answer:
Katherine Malloy
Personal Cash Budget for September, October, November, and December:
September October November December
Balance $7,560 $2,960 $3,060 $3,160
Apartment deposit return 500
Earnings (net of taxes) 940 940 940 940
Borrowing 340
Total Cash Receipts $8,500 $3,900 $4,000 $4,940
Season football tickets 100
Additional entertainment 260 260 260 260
Semester Tuition 4,100 4,100
Rent 370 370 370 370
Food 210 210 210 210
Apartment deposit 500
Total cash payment $5,540 $840 $840 $4,940
Balance $2,960 $3,060 $3,160 $0
Explanation:
Katherine Malloy's cash budgets for the months of September, October, November, and December give some snapshots of her cash receipts and payments, including the planned borrowing of no less than $340 that she must arrange in December in order to pay for her spring semester tuition on December 31. From the budget, she gets a clearer picture of her cash needs, receipts and expenses. She is comfortable from September till the end of the year. But, Katherine must arrange for some cash receipts, either in student loan or support or get another part-time work to increase her income, to enable settle her tuition in December.
Marston Manufacturing Company has two divisions, L and H. Division L is the company’s low-risk division and would have a weighted average cost of capital of 8% if it was operated as an independent company. Division H is the company’s high-risk division and would have a weighted average cost of capital of 14% if it was operated as an independent company. Because the two divisions are the same size, the company has a composite weighted average cost of capital of 11%. Division H is considering a project with an expected return of 12%. Should Marston Manufacturing Company accept or reject the project? Reject the project Accept the project On what grounds do you base your accept–reject decision? Division H’s project should be accepted, as its return is greater than the risk-based cost of capital for the division. Division H’s project should be rejected since its return is less than the risk-based cost of capital for the division.
Answer:
Should Marston Manufacturing Company accept or reject the project?
Marston C Company should reject the project because its expected return is lower than Division H's cost of capital.
Since the divisions' risk is so different, and probably their projects are also very different, the company should use different costs of capital to accept of reject the projects based on each division's cost of capital.
Imagine another situation where Division L is evaluating a project that yields 10%. If they used the company's WACC, then they should reject the project, but if they used the division's cost of capital, then they should accept the project (in this case I would recommend accepting it).
Explanation:
Division H's risk = 14%
Division L's risk = 8%
WACC = 11%
Which of the following promises is subject to the "strict performance" standard? Assume that performance of the promise is not an express condition of the promisee's duty to perform. cousrse hero
Answer:
A promise to deliver a deed
Explanation:
The term, 'strict performance' is used to describe a contract between two parties. A contract is an agreement between two parties, and it is legally binding. When discharging contracts involving services, 'substantial performance' is required. For example, if I tell a painter to paint my house blue except for the kitchen and storeroom which should be painted white, and he does accordingly but failed in painting the kitchen white, he has performed substantially even though there was a minor breach. The consequences of which would be borne by him.
'Strict performance' is required in contracts where the terms are stated in express terms and the standards are very high. A 'deed' is such a contract because it is a document specifying the legal rights of a person or the ownership of a property. It requires the signatures of the two parties. Therefore, strict performance and adherence to the contractual deed are required.
Sometimes airlines raise ticket prices as the flight departure date approaches in the hope of increasing revenue. The airlines raise their prices on the assumption that:
Answer:
B) less price-elastic as departure time approaches.
Explanation:
Here are the options to this question :
A) steady in its price elasticity as departure time approaches.
B) less price-elastic as departure time approaches.
C) always unit elastic.
D) very sensitive to price changes as the time of departure approaches.
Price elasticity of demand measures the responsiveness of quantity demanded to changes in price of the good.
Price elasticity of demand = percentage change in quantity demanded / percentage change in price
If the absolute value of price elasticity is greater than one, it means demand is elastic. Elastic demand means that quantity demanded is sensitive to price changes.
Demand is inelastic if a small change in price has little or no effect on quantity demanded. The absolute value of elasticity would be less than one
Demand is unit elastic if a small change in price has an equal and proportionate effect on quantity demanded.
As the departure date arrives, there would be less available flights and less time for travellers to make alternative travelling arrangements. As a result, they would be willing to pay any price. At this point, travellers would have a less elastic demand. that is they are less sensitive to price.
A seller has accepted another offer, but your client doesn't want to give up. Even now, she can submit an offer to the seller, called a:
Answer: b. backup offer
Explanation:
A backup offer is one that is made when an offer has already been made by another. With a backup offer, the person offering it is acknowledging that someone else has made another offer that was accepted but they still offer this in case the accepted offer falls through for whatever reason.
If the seller accepts this offer, they will have a contract with the person offering that legally obliges them to sell the good in question to the person offering if the current offer is not honored.
Manufacturing overhead—multiple application bases Staley Toy Co. makes toy flutes. Two manufacturing overhead application bases are used; some overhead is applied on the basis of machine hours at a rate of $5.60 per machine hour, and the balance of the overhead is applied at the rate of 240% of direct labor cost.
Required:
a. Calculate the cost per unit of October production of 4,200 toy flutes that required
1. Raw materials costing $490.
2. 21 direct labor hours costing $357.
3. 36 machine hours.
b. At the end of October, 3,870 of these toy flutes had been sold. Calculate the ending inventory value of the toy flutes still in inventory at October, 31.
Answer:
a. $ 0.45
b. $148.50
Explanation:
Production Cost Schedule for 4,200 toy flutes
Raw materials costing $490.00
Direct Labor $357.00
Overheads ($5.60 × 36) $201.60
Overheads ($357 × 240%) $856.80
Total Cost $1,905.40
Cost per unit = Total Cost / Total Number of Units produced
= $1,905.40 / 4,200
= $ 0.45
Closing Inventory = Units Left × Cost per unit
= (4,200 - 3,870) × $ 0.45
= 330 × $ 0.45
= $148.50
You short-sell 200 shares of Rock Creek Fly Fishing Co., now selling for $50 per share. You are required to post a 50% margin on the short sale. If your broker requires a 30% maintenance margin, at what price will you get a margin call? (Ignore interests and dividends)
a. $62.50
b. 57.69
c. 56.25
d. 37.50
Answer:
b. 57.69
Explanation:
Calculation for what price that you will get a margin call
First step
200 shares *$25 per share=$10,000
Second step
Based on the information given we are required to post a 50% margin on the short sale.
Now let find the 50% margin
50% margin =50%*$10,000
50% margin=$5,000
Hence,
$10,000+$5,000=$15,000
Third step
Based on the information given we were told that the broker requires a 30% maintenance margin.
.30=($10,000-200p)/200p
60p=$15,000-200p
260p= $15,000
Hence
$15,000/260
Price= $57.69
Therefore the price that you will get a margin call will be $57.69
Countess Corp. is expected to pay an annual dividend of $4.63 on its common stock in one year. The current stock price is $74.11 per share. The company announced that it will increase its dividend by 3.75 percent annually. What is the company's cost of equity?
Answer:
r = 0.099974 or 9.9974% rounded off to 10.00%
Explanation:
Using the constant growth model of DDM we calculate the price of a stock today which is expected to pay a dividend which increases at a constant rate through out. The DDM values a stock based on the present value of the expected future dividends from the stock. The formula for price under this model is,
P0 = D1 / r - g
Where,
r is the required rate of return or cost of equityg is the constant growth rate in dividendsPlugging in the available values in the formula, we calculate r to be,
74.11 = 4.63 / (r - 0.0375)
74.11 * (r - 0.0375) = 4.63
74.11r - 2.779125 = 4.63
74.11r = 4.63 + 2.779125
r = 7.409125 / 74.11
r = 0.099974 or 9.9974% rounded off to 10.00%
Akram owns a small farm. He employs 80 workers in the field and has recently hired a manager to help him manage the farm. The income of the business varies greatly during the year. The farm makes a small profit but Akram is ambitious. He wants to take over a neighbour’s farm and increase the range of crops he sells. He thinks that he needs long-term finance and plans to take out bank loan to pay for the takeover. He has already borrowed money to buy a new tractor. A friend has advised him to form a company and sell shares
Question Completion:
Requirement. Identity two types of short-term finance Akram could use when the farm income is low
Answer:
Akram's Farm
Akram's farm can make good use of the following short-term financing sources:
1. Akram's farm can use Accounts Payable to provide short-term trade finance when the farm buys farm inputs, equipment, and other supplies on credit. The farm's Accounts Payable can provide interest-free trade loans by allowing the farm to take longer time to settle the suppliers. But, the farm should not miss out on cash discounts - an important source of trade finance.
2. Akram's farm can generate finances by ensuring early collections of the Accounts Receivable. Akram's farm can also go ahead and borrow on the accounts receivable through short-term bank loans guaranteed on the accounts. The farm can also factor the accounts receivable by selling them to factoring and finance houses for less.
Explanation:
Akram's farm is still a small farm that is not yet formed as a company. The immediate concentration is growing the entity and starting the processes for changing its corporate status so that it can take advantage of the sources of finance available to companies.
Carlos and Deborah are farmers. Each one owns a 12-acre plot of land. The following table shows the amount of rye and corn each farmer can produce per year on a given acre. Each farmer chooses whether to devote all acres to producing rye or corn or to produce rye on some of the land and corn on the rest.
Rye Corn
(Bushels per acre) (Bushels per acre)
Carlos 18 6
Deborah 28 7
___________ has an absolute advantage in the production of rye, and _________ has an absolute advantage in the production of corn. Carlos's opportunity cost of producing 1 bushel of corn is___________ bushels of rye, whereas Deborah's opportunity cost of producing 1 bushel of corn is ___________ bushels of rye. Because Carlos has a ___________ opportunity cost of producing corn than Deborah,____________ has a comparative advantage in the production of corn, and____________ has a comparative advantage in the production of rye.
Answer:
Deborah
Deborah
3
4
lower
Carlos
Deborah
Explanation:
a person has comparative advantage in production if he / she produces at a lower opportunity cost when compared to other people
for carlos
the opportunity cost of producing rye = 6 / 18 = 0.33
the opportunity cost of producing corn = 18 / 6 = 3
for Deborah,
the opportunity cost of producing rye = 7 / 28 = 0.25
the opportunity cost of producing corn = 28 /7 =4
Carlos has a comparative advantage in the production of corn because he produces at a lower opportunity cost when compared with Deborah
Deborah has a comparative advantage in the production of rye because he produces at a lower opportunity cost when compared with Carlos
A person has absolute advantage in production if he produces more quantity of the product when compared to other people.
Deborah has absolute advantage in the production of both rye and corn
The correct statements will be that
1. Carlos has an absolute advantage in the production of Rye
2. Deborah has an absolute advantage over the production of Corn.
3. Carlos' opportunity cost of producing 1 bushel of rye is 3 bushels of rye
4. Deborah's opportunity cost of producing 1 bushel of corn is 4 bushels of rye.
5. Carlos has a lower opportunity cost of producing corn than Deborah.
6. Deborah has a competitive advantage in the production of Corn.
7. Carlos has a competitive advantage in the production of Rye.
The production outputs of Carlos and Deborah suggests that Deborah is a more efficient farmer.
Production outputThe production output refers to the total outcome derived from the use of resources available at a given period of time, such that the two different outputs are comparable. Here, as the production output of Deborah is more in both the cases of production of rye and corn, it can be said that the production output of Deborah is more than Carlos.Hence, the correct statements regrading the production outputs of Carlos and Deborah are as aforementioned.
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Even though most corporate bonds in the United States make coupon payments semiannually, bonds issued elsewhere often have annual coupon payments. Suppose a German company issues a bond with a par value of ? 1000, 25 years to maturity, and a coupon rate of 6.4 percent paid annually. If the yield to maturity is 7.5 percent, what is the current price of the bond?
Answer:
Bond Price = $877.3835955 rounded off to $877.380
Explanation:
To calculate the price of the bond, we need to first calculate the coupon payment per period. We assume that the interest rate provided is stated in annual terms. As the bond is an annual bond, the coupon payment, number of periods and r or YTM will be,
Coupon Payment (C) = 0.064 * 1000 = $64
Total periods (n)= 25
r or YTM = 7.5% or 0.075
The formula to calculate the price of the bonds today is attached.
Bond Price = 64 * [( 1 - (1+0.075)^-25) / 0.075] + 1000 / (1+0.075)^25
Bond Price = $877.3835955 rounded off to $877.380
The current price of the bond is $877.38.
Given that,
The par value of $1,000.The NPER is 25 years.The coupon rate is 6.4%, PMT = 6.4% of $1,000 = $64.The RATE is 7.5%.Based on the above information, the calculation is to be shown in the attachment.
Therefore we can conclude that The current price of the bond is $877.38.
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Assume you have a margin account with a 50% initial margin. You purchase 100 shares of stock at $80 per share. The price increases to $100 per share. What is the net value of your investment (margin) now
Answer:
Net value of the investment (margin) is $6,000
Explanation:
The initial margin = (100 shares * $80) * 50%
The initial margin = $4,000
Increase in the Margin value = 100 shares* ($100-$80)
Increase in the Margin value = 100 shares * $20
Increase in the Margin value =$2,000
Net value of the investment (margin) = $4,000 + $2,000
Net value of the investment (margin) = $6,000
Suppose that in 2011, per-person GDP in Singapore was $53,591, and in Egypt, it was $5,547, as measured in 2005 purchasing power parity U.S. dollars.
It is accurate to say that the income level in Singapore is higher / lower than in Egypt. Why is this comparison accurate?
a. There are significant differences in incomes between high- and low-income countries.
b. Egypt is characterized by a higher share of industrial production in total output than Singapore is.
c. Singapore is characterized by a larger share of household production in total output than Egypt is.
d. Egypt is characterized by a larger share of household production in total output than Singapore is.
Answer:
a. There are significant differences in incomes between high- and low-income countries.
Explanation:
Data provided in the question
Per person GDP in Singapore = $53,591
Per person GDP in Egypt = $5,547
Based on the above information
As we can see that the level of income in Singapore is higher than Egypt also when there is an important difference in the high income and low income countries the same is shown accurately
hence, the correct option is a.
"One of the ten IG principles is a Continuous improvement. What is the importance of this principle to the organization program"
Answer:
the importance is to provide periodic program review and necessary adjustments against gaps and it short comings
Explanation:
Information governance is a full way of managing information in a corporation by the implementation of a series of processes, controls and roles. It can be simply said to be a process of managing information assets as this will cause a balance between security and usage.
continuous improvement is one of its 10 principles. And it simply means that programs in information governance have to go through continuous reviews and updates as doing such will help to reduce shortcomings.
Suppose that in a competitive output market, firms hire labor from a competitive labor market (so that the profit maximization conditions for hiring labor are as we discussed in class). If the supply of this kind of labor increases, we would expect a(n) _____________.
A. increase in equilibrium wage, W, and increase in equilibrium quantity of labor, L, employed.
B. an increase in W and a decrease in L.
C. A decrease in W and a decrease in L.
D. A decrease in W and no change in L.
E. None of the above.
Answer:
e
Explanation:
When supply of labour increases, the supply curve shifts outward. As a result there would be an increase in equilibrium quantity but a decrease in wages
Which of the following is not a reason why it is important for parties to memorialize their agreements in writing?
a. A party enhances his/her chances of proving that an obligation was undertaken and makes it harder for the other party to deny making the promise.
b. Signing a writing communicates the seriousness of the occasion to the signer.
c. A person's signature on a written contract provides a basis for the contract to be authenticated.
d. Writings are subject to the danger that a person might fabricate terms.
Answer:
B. singing a writing communicates the seriousness of the occasion to the singer
The reason which is not important for parties to memorialize their agreements in writing is signing a writing communicates the seriousness of the occasion to the signer. Thus, the correct answer is C.
What is an agreement?Agreement refers to consent of individual on a particular opinion. When the both parties agree on a concept they will make it in writing. When this agreement enforceable by law it is considered as contract.
The reason it is important top memorialize the agreements in writing are it will act as proof or evidence when formulated in written to be presented in case of obligation.
An agreement will be duly signed by both the parties which shows its authenticity and reliability and avoid any false interpretation of the deal. When the agreement is in writing the violation of terms and conditions is not possible as it clearly mentions the drawbacks of circumstances if any party failed to fulfill the conditions of the agreement.
Therefore, the option C signing a writing communicates seriousness is the appropriate answer.
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What is the difference between full absorption costing and variable costing?A. In full absorption costing, all of the non-manufacturing costs are expensed. In variable costing, all of the non-manufacturing expenses are included in the cost of the product.B. In full absorption costing, fixed manufacturing overhead is expensed. In variable costing, fixed manufacturing overhead is included in the cost of the product.C. In full absorption costing, fixed manufacturing overhead is included in the cost of the product. In variable costing, fixed manufacturing overhead is expensed.D. Variable costing must be used for external financial reports while full absorption costing can only be used for internal reporting.
Answer: C. In full absorption costing, fixed manufacturing overhead is included in the cost of the product. In variable costing, fixed manufacturing overhead is expensed.
Explanation:
Full absorption costing accounts for all the costs involved in making a product including the indirect and the direct costs. That means both variable costs like direct materials and direct labor as well as fixed costs like rent, and insurance are included in the cost of the product.
Variable costing on the other hand expenses fixed manufacturing overhead separately. As a result, Full absorption has a higher cost of inventory than does Variable costing.
During group meetings, Douglas is never able to discuss his idea for reducing energy usage in the office. He has a detailed, well-thought out plan for how to accomplish this. He thinks it is a really great idea that can save the company money. But during the meetings, he does not even get a chance to share his ideas. Douglas should focus his efforts on _______________.
Answer: B) controlling the agenda
Explanation: During group meetings, Douglas is never able to discuss his idea for reducing energy usage in the office. He has a detailed, well thought out plan for how to accomplish this. He thinks it is a really great idea that can save the company money. But, within the current context, he does not even have a chance to share his ideas. Douglas should focus his efforts on ________. A) researching his idea more B) controlling the agenda C) finding out how his employees view him D) asking outside sources to validate his idea
Douglas would better benefit from controlling the agenda of the meeting so he is better able to pitch forward his well thought out idea concerning reducing energy usage in the office.
Douglas should focus his efforts on controlling the agenda.
What is controlling the agenda?Agenda manage can be described because the capacity to affect the way wherein options enter collective selection-making. Even as agenda control is important generally, it plays a unique position inside the rational-preference-primarily based concept of democratic establishments (or the “new institutionalism”).
What is an agenda in a negotiation?A proper agreed-upon list of dreams to be accomplished or objects to be discussed in a particular order at some stage in an assembly or negotiation. Agendas may be formal and apparent, or casual and diffused in negotiations. A negotiation timetable can be used to control the negotiation assembly.
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Refer to the following lease amortization schedule. The five payments are made annually starting with the inception of the lease. A $2,000 bargin purchase option is exercisable at the end of the five-year lease. The asset has an expected economic life of eight years.
Lease Payment Cash Payment Effective Interest Decrease in Balance Balance
34,600
1 8,000 ?? ?? 26,600
2 8,000 2,660 5,340 21,260
3 8,000 2,126 5,874 15,386
4 8,000 1,539 6,461 8,925
5 8,000 ?? ?? ??
6 2,000 182 1,818 0
What is the effective annual inerest rate?
A. 9%
B. 10%
C. 11%
D. 20%
Answer:
B. 10%
Explanation:
The computation of the effective annual interest rate is shown below:-
Effective annual interest rate = Lease payment third effective interest ÷ Lease payment second balance × 100
= $2,126 ÷ $21,260 × 100
= 10%
Therefore for computing the effective annual interest rate we simply applied the above formula.
Hence the correct option is B.
Your firm has estimated the following cash flows for two mutually exclusive capital investment projects. The firm's required rate of return is 13%.
Year Project A Cash Flow Project B Cash Flow
0 -$100,000 -$100,000
1 28,900 48,000
2 28,900 40,000
3 28,900 40,000
4 28,900 5 28,900
Which of the following statements best describes projects A and B?
a) Project A should be accepted because it has the highest NPV.
b) Project A should be accepted because it has the highest EAA.
c) Project B should be accepted because it has the highest EAA.
d) Both projects should be accepted because they have positive NPVs and EAAs.
e) Neither project is acceptable.
Answer:
c) Project B should be accepted because it has the highest EAA.
Explanation:
EAA is the annuity payment that is equal to the value of the NPV
Net present value is the present value of after tax cash flows from an investment less the amount invested.
NPV can be calculated using a financial calculator
NPV for project A
Cash flow in year 0 = -$100,000
Cash flow each year from year 1 to 5 = $28,900
I = 13%
NPV = $1647.98
Please find attached the formula used i calculating EAA = $468.54
NPV for project B
Cash flow in year 0 = -$100,000
Cash flow in year 1 = $48,000
Cash flow in year 2 = $40,000
Cash flow in year 3 = $40,000
I = 13%
NPV = $1,525.75
EAA = $646.19
When comparing projects with unequal lives, choose the project with the higher EAA. This is project B. Only project B can be chosen because the projects are mutually exclusive.
To find the NPV using a financial calculator:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. after inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.
3. Press compute
Answer:
c) Project B should be accepted because it has the highest EAA.
Explanation:
First determine the Net Present Value of Project A and Project B.
Using a Financial Calculator the Net Present Values will be
Project A
-$100,000 CFj
$28,900 CFj
$28,900 CFj
$28,900 CFj
$28,900 CFj
13% I/YR
Shift NPV - $14,037.78
Project B
-$100,000 CFj
$48,000 CFj
$40,000 CFj
$40,000 CFj
$28,900 CFj
13% I/YR
Shift NPV $19250.66
The only correct statement is that Project B should be accepted because it has the highest EAA.
Which of the following is not a global economic forum of nations?
G-8
O G650
+ 5
G-20
Answer:
c
Explanation:
answer is c
Vaughn Manufacturing is constructing a building. Construction began in 2020 and the building was completed 12/31/20. Vaughn made payments to the construction company of $3114000 on 7/1, $6456000 on 9/1, and $5950000 on 12/31. Weighted-average accumulated expenditures were
Answer:
$3,709,000
Explanation:
7/1 Time weighted amount = $3,114,000 * 6/12 = $1,557,000
9/1 Time weighted amount = $6,456,000 * 4/12 = $2,152,000
12/31 Time weighted amount = $5,950,000 * 0/12 = $0
Weighted-average accumulated expenditures = 7/1 Time weighted amount + 9/1 Time weighted amount + 12/31 Time weighted amount
Weighted-average accumulated expenditures = $1,557,000 + $2,152,000 + 0
Weighted-average accumulated expenditures = $3,709,000