assume a company makes only three products, d, e, and f: product d product e product f estimated customer demand in units 700 600 800 selling price per unit $ 80 $ 65 $ 45 variable cost per unit $ 35 $ 26 $ 20 machine-hours per unit 2.5 3.0 1.25 the company has only 2,700 machine-hours available. up to how much should the company be willing to pay per hour to lease additional machine capacity?
Answers
The manufacture need to pay $35 per hour to lease additional machine capacity.
Margin means the difference between the cost at which a product is sold and the costs linked with making or selling the product (or price of goods sold). Broadly speaking, a manufacture's margin means its ratio of profit to employee.
Order of Production with own resources:
Product F's 800 units at 1.25 hours per unit = 1,000 hours
Product E's 600 units at 3.0 hours per unit = 1,800 hours
Sum of machine hours with own resources = 2,800 hours
Lease Machine Capacity:
Product D's 700 units at 2.5 hours per unit = 1,750 hours
Product E's 600 units at 3 hours per unit = 1,800 hours
Total machine hours required under leasing = 3,550 hours
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Related Questions
Why is the Federal Reserve so important? What services do they offer?
Answers
The Federal Reserve is important because it is the central bank of the United States and is responsible for managing the nation's monetary policy.
The Federal Reserve's policies can affect interest rates, inflation, employment, and economic growth. The Fed also serves as a lender of last resort during times of financial crisis, providing liquidity to banks and other financial institutions to help prevent economic collapse. The Fed also maintains the stability of the financial system by supervising and regulating banks and other financial institutions to ensure their safety and soundness.
Finally, the Federal Reserve plays an important role in promoting financial stability and consumer protection through its oversight of consumer lending and its role as a watchdog for systemic risks in the financial system. Overall, the Federal Reserve plays a crucial role in promoting economic growth, stability, and prosperity in the United States.
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Which best diagrams the correct obstacle to the example?
Economic obstacle: Cort is struggling to get a job in construction because many businesses have closed down due to no work. Time obstacle: Francis has two more months to get a job as a practicing electrician before his certification expires. Financial obstacle: Sally wants to open her own business, but was denied a loan from the bank. Motivational obstacle: Rory wants to switch from a surgeon to a pediatrician so he can be happy working with children.
Time obstacle: Cort is struggling to get a job in construction because many businesses have closed down due to no work. Economic obstacle: Francis has two more months to get a job as a practicing electrician before his certification expires. Financial obstacle: Sally wants to open her own business, but was denied a loan from the bank. Motivational obstacle: Rory wants to switch from a surgeon to a pediatrician so he can be happy working with children.
Financial obstacle: Cort is struggling to get a job in construction because many businesses have closed down due to no work. Economic obstacle: Francis has two more months to get a job as a practicing electrician before his certification expires. Motivational obstacle: Sally wants to open her own business, but was denied a loan from the bank. Time obstacle: Rory wants to switch from a surgeon to a pediatrician so he can be happy working with children.
Economic obstacle: Cort is struggling to get a job in construction because many businesses have closed down due to no work. Motivational obstacle: Francis has two more months to get a job as a practicing electrician before his certification expires. Financial obstacle: Sally wants to open her own business, but was denied a loan from the bank. Time obstacle: Rory wants to switch from a surgeon to a pediatrician so he can be happy working with children.
Answers
Answer:
a
Explanation:
i just took the unit text and got a 100%
Cole is refinishing an antique china cabinet and has already spent $180 on the restoration. He expects to be able to sell the cabinet for $360. Cole discovers that he needs to do an additional $200 worth of work to make the cabinet worth $360 to potential buyers. He could also sell the cabinet now, without completing the additional work, for $100. What should Cole do
Answers
Answer:
Cole should complete the additional work and sell the cabinet for $360.
Explanation:
If Cole sells the cabinet now for $100 and taken into account that he has already spent $180, this means that:
$100-$180= -$80
He would be losing $80.
On the other side, if he completes the additional work, he would sell the cabinet $360. However, his expenses would be:
$180+$200= $380
Now, you have to subtract the costs from the selling price:
$360-$380= -$20
This means that he would lose $20.
According to that, Cole should complete the additional work because he would be lose less money.
Which advice will help Luke, a bank employee, advance in his career?
ОА. Don't waste too much time on academic learning.
OB. Spend as much time as you can socializing with your colleagues.
OC. Agree with everything your manager says.
OD. Maintain a positive attitude toward learning.
Answers
D. Maintain a positive attitude towards learning.
Answer:
D. Maintain a positive attitude towards learning.
Explanation:
do you guys like Canada? or leaves in Canada and do you thin im a cut Canadian
Answers
Answer:
I love canada but I live in america :(
but hey we just got the Cheeto out so it's getting better here (*˘︶˘*).｡*♡
Outline why it is important for a business owner to respond to technological and global issues when establishing a business?
Answers
Technology enables an increase in the efficiency of systems, products, and services. It helps track and streamline strategies, hold records go with the flow, and control contacts and employee records.
In reality, this expanded efficiency in operation enables lessened costs as well as allows the commercial enterprise to develop swiftly.
Technology has vital consequences on commercial enterprise operations. Irrespective of the scale of your business enterprise, technology has both tangible and intangible advantages that will help you make money and produce the results your customers demand. Technological infrastructure affects the subculture, performance, and relationships of a business.
The use of technology has made commercial enterprises and clients closer in many areas. E-mail and Social Media are getting used for answering queries related to products and services with clients. Giving customers all feasible methods to contact the agency is simple with the latest technology and packages over the internet.
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what happens if you overdraw your checking account?
Answers
Answer:
Your bank can close your account and report you to a debit bureau, which may make it hard for you to get approved for an account in the future.
A 3rd degree burn has burnt only part of the epidermis. the epidermis only. the epidermis and dermis. the epidermis and part of the dermis.
Answers
A 3rd degree burn has burnt the epidermis and part of the dermis. Option 3 is the correct answer.
A 3rd degree burn is a severe burn that extends through the entire thickness of the skin. In a 3rd degree burn, the epidermis, which is the outermost layer of the skin, and part of the dermis, which is the layer beneath the epidermis, are affected. This type of burn destroys the full thickness of the epidermis and can extend into the deeper layers of the dermis.
The epidermis serves as a protective barrier for the body, preventing the entry of harmful substances and pathogens. It also helps regulate body temperature and plays a role in the production of vitamin D. The dermis provides structural support, contains blood vessels, nerve endings, sweat glands, and hair follicles.
Due to the severity of the injury, 3rd degree burns often require medical intervention and specialized treatment. They can result in extensive tissue damage, loss of sensation, and impaired healing. Treatment may involve surgical interventions, such as skin grafting, to promote healing and minimize the risk of infection. Rehabilitation and long-term care are often necessary to manage the physical and psychological effects of a 3rd degree burn.
Hence, option 3 is the right choice.
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Which information would most likely cause a company's stock price to go up?
Answers
Answer:
The company releases an innovative car with unique features
Explanation:
when deciding what projects to invest in or continue, one should include sunk costs. (True or False)
Answers
The statement: when deciding what projects to invest in or continue, one should include sunk costs is FALSE because sunk costs are costs that have already been incurred and cannot be recovered
In the context of decision-making for future projects, sunk costs should be ignored since they are irrelevant to future costs and benefits. Including sunk costs in such decision-making may lead to irrational decision-making and may result in inefficient allocation of resources.
Therefore, when deciding what projects to invest in or continue, sunk costs should be excluded. Instead, decision-makers should focus on the expected future costs and benefits of each project and choose the one that is likely to generate the highest net benefit.
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a method for managing pollution in which a limit is placed on emissions and businesses or countries can by and sell emissions allowances
Answers
The policy's reaction establishes a cap-and-trade emissions standard that lowers outflows, In a cap-and-trade system.
It is a market tool wherein a government sets a "limit" or cut-off on the total amount of ozone-harming compounds that may be released. Producers of ozone-depleting substances would be required to pay for each considerable amount of carbon dioxide or carbon dioxide equivalent1 that they emit under such a strategy. For instance, those from power plants, by establishing a market and setting a limit on contamination. Limiting outflows and charging for them is the best environmental solution, both ecologically and financially. Cap-and-trade is a technique for achieving both. The policy's reaction establishes a cap-and-trade emissions standard that lowers outflows, The public authority establishes an outflows cap and distributes a number of emanation stipends in accordance with that cap under a cap-and-exchange structure.
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1. The formula for continuously compounded interest is A = Pe^rt, where A is the amount of money in the account, P is the initial investment, r is the interest rate, and t is the time in years. Using the formula, determine, to the nearest dollar, the amount in the account after 8 years if $750 is invested at an annual rate of 3%
Answers
Answer:
the amount in the account after 8 years is $954
Explanation:
The computation of the amount in the account after 8 years is shown below"
Given that
The formula for continuously compound interest is
Amount = Principal e^(rate) (time period)
= $750 × e^(0.03)(8)
= $954
Hence, the amount in the account after 8 years is $954
The same is to be considered by applying the above formula
Problem 24-11
Consider the following information regarding the performance of a money manager in a recent month. The table represents the actual return of each sector of the manager’s portfolio in column 1, the fraction of the portfolio allocated to each sector in column 2, the benchmark or neutral sector allocations in column 3, and the returns of sector indices in column 4.
Actual Return Actual Weight Benchmark Weight Index Return
Equity 2.1% 0.5 0.6 2.6% (S&P 500)
Bonds 1 0.2 0.3 1.2 (Salomon Index)
Cash 0.7 0.3 0.1 0.8
a.
What was the manager’s return in the month? What was her overperformance or underperformance?(Round your answer to 2 decimal places. Input all amounts as positive values. Do not round intermediate calculations. Omit the "%" sign in your response.)
The manager’s return in the month is %
(Click to select)OutperformedUnderperformed by %
b.
What was the contribution of security selection to relative performance? (Round your answer to 2 decimal places. Do not round intermediate calculations. Negative amount should be indicated by a minus sign. Omit the "%" sign in your response.)
Contribution of security selection: %
c. What was the contribution of asset allocation to relative performance? (Do not round intermediate calculations. Round your answer to 2 decimal places. Negative amount should be indicated by a minus sign. Omit the "%" sign in your response.)
Contribution of asset allocation: %
Expert Answer
Answers
a. The manager underperformed in the equity sector by 1.14%, and overperformed in the bonds and cash sectors by 0.26% and 0.66%, respectively.
b. The contribution of security selection to relative performance is -0.5%, -0.2%, and -0.1% for equity, bonds, and cash, respectively.
c. The contribution of asset allocation to relative performance is -0.1, -0.1, and 0.2 for equity, bonds, and cash, respectively.
a. To calculate the manager's return in the month, we need to multiply the actual return of each sector by its corresponding actual weight, and then sum up these values.
For equity:
Actual return = 2.1%
Actual weight = 0.5
Equity contribution = 2.1% * 0.5 = 1.05%
For bonds:
Actual return = 1%
Actual weight = 0.2
Bonds contribution = 1% * 0.2 = 0.2%
For cash:
Actual return = 0.7%
Actual weight = 0.3
Cash contribution = 0.7% * 0.3 = 0.21%
Manager's return = Equity contribution + Bonds contribution + Cash contribution
Manager's return = 1.05% + 0.2% + 0.21% = 1.46%
The manager's return in the month is 1.46%.
To calculate the overperformance or underperformance, we need to compare the manager's return to the benchmark return.
Equity benchmark return = 2.6%
Bonds benchmark return = 1.2%
Cash benchmark return = 0.8%
Overperformance or underperformance = Manager's return - Benchmark return
For equity:
Overperformance or underperformance = 1.46% - 2.6% = -1.14% (underperformance)
For bonds:
Overperformance or underperformance = 1.46% - 1.2% = 0.26% (overperformance)
For cash:
Overperformance or underperformance = 1.46% - 0.8% = 0.66% (overperformance)
Therefore, the manager underperformed in the equity sector by 1.14%, and overperformed in the bonds and cash sectors by 0.26% and 0.66%, respectively.
b. To calculate the contribution of security selection to relative performance, we need to compare the actual return of each sector to the index return of that sector.
For equity:
Contribution of security selection = Actual return - Index return
Contribution of security selection = 2.1% - 2.6% = -0.5% (negative contribution)
For bonds:
Contribution of security selection = Actual return - Index return
Contribution of security selection = 1% - 1.2% = -0.2% (negative contribution)
For cash:
Contribution of security selection = Actual return - Index return
Contribution of security selection = 0.7% - 0.8% = -0.1% (negative contribution)
Therefore, the contribution of security selection to relative performance is -0.5%, -0.2%, and -0.1% for equity, bonds, and cash, respectively.
c. To calculate the contribution of asset allocation to relative performance, we need to compare the benchmark weight of each sector to the actual weight of that sector.
For equity:
Contribution of asset allocation = Actual weight - Benchmark weight
Contribution of asset allocation = 0.5 - 0.6 = -0.1 (negative contribution)
For bonds:
Contribution of asset allocation = Actual weight - Benchmark weight
Contribution of asset allocation = 0.2 - 0.3 = -0.1 (negative contribution)
For cash:
Contribution of asset allocation = Actual weight - Benchmark weight
Contribution of asset allocation = 0.3 - 0.1 = 0.2 (positive contribution)
Therefore, the contribution of asset allocation to relative performance is -0.1, -0.1, and 0.2 for equity, bonds, and cash, respectively.
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If Rolo Watches plans to sells 300 watches at $48 per watch and has variable costs of $20 per watch and fixed costs of $4,000, what is the projected profit? A) $4,000 B) $4,400 C) $8,400 D) $12,000
Answers
Answer:
Profit= $4,400
Explanation:
Giving the following information:
Sales= 300 units
Selling price= $48
Unitary variable cost= $20
Fixed cost= $4,000
First, we need to calculate the contribution margin:
Contribution margin= 48 - 20= $28 per unit
Now, the projected profit:
Profit= 300*28 - 4,000
Profit= $4,400
Which sequence of HACCP principles is in the correct order?
A.
Establish critical limits for each CCP, conduct a hazard analysis, and establish corrective actions.
B.
Conduct a hazard analysis, identify CCPs, and establish critical limits for each CCP.
C.
Establish record-keeping procedures, establish corrective actions, and establish CCP monitoring requirements.
D.
Establish CCP monitoring requirements, conduct a hazard analysis, and identify CCPs.
E.
Conduct a hazard analysis, identify CCPs, and establish CCP monitoring requirements.
Answers
Answer:
B
Explanation:
Hazard analysis of critical control point (HACCP) is a process of identifying and assessing risks alongside the biological , physical and chemical hazards associated with food production .
The sequence of the first three of the seven principles are
1. Conduct hazard analysis to determine potential risks related to food protection
2. Identify the critical control point (CCP) which addresses controlling identified hazards that are mostly likely to cause injury to health
3. Establishing critical limits for each CCP , which is the highest or lowest level a biological ,physical or chemical parameter must be controlled to prevent or minimize hazards.
Answer:
B. Conduct a hazard analysis, identify CCPs, and establish critical limits for each CCP
Explanation:
Need help what’s the answer
Answers
Answer: C
Explanation: The demand curve of Iphone cases falls due to the increase of the iphones price. Hope this helps.
question content areathe cost of a manufactured product generally consists of which of the following costs? a.direct labor cost, direct materials cost, and factory overhead cost b.direct labor cost and factory overhead cost only c.direct materials cost and direct labor cost only d.direct materials cost and factory overhead cost only
Answers
The cost of a manufactured product generally consists of direct materials cost, direct labor cost, and factory overhead cost. Option A
What is factory overhead cost?Generally, The total of all indirect expenses spent during the manufacture of a product is known as manufacturing overhead (MOH) cost. Along with the expenses of direct materials and direct labor, it is included in the price of the finished product.
The total cost associated with running all production facilities for a manufacturing business that cannot be linked directly to a product is known as factory overhead, also known as manufacturing overhead, work overhead, or factory burden in American English.
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How can a person become a dentist
Answers
Explanation:
It generally takes eight years to become a dentist: four years to earn a bachelor's degree as an undergraduate and four years to earn a DDS or DMD in dental school. If you're interested in specializing, you'll also need to complete a dental residency (more on that below).
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As a measure of economic welfare, gross domestic product underestimates a country's production of goods and services when there is an increase in
Answers
Answer:
is a measure of the overall economic output ... The GDP refers to the value of goods and services that the country produces. ... GDP is not adjusted for crime and other social problems (ex: increases in crime ... real GDP omits household production and it underestimates the value
CASE STUDY Not the way we do business around here' Please note: this case is based on original email material in Swedish, from Nickell Sweden (Nickell is a pseudonym). The English translation reflects the original proficiency of Swedish and writing style of the authors of the emails Introduction Robin hangs up the phone, it's almost 11 p.m. and tomorrow will be a long day. Today was spent visiting an important client and Robin was out of reach most of the time, while installing a new system. The phone call that just ended with Tapio Mäkelä, the managing director of the Nordic area, is worrying. If Tapio does what he threatens to do, Robin will lose one of the most important members of the Swedish team: the technical specialist, Per Jonson. How can things go so wrong in just one afternoon? Robin decides that a good night of sleep is needed before writing- or not- a report to the European HR manager. Background Robin works as the sales director of Sweden, for a European company called Nickell, specialized in the development, production and sales of cleaning chemicals and dosing systems for the food-processing industry (cleaning of pipes, tanks, etc.). The Swedish operations of Nickell are a subsidiary of Nickell Nordic Area, located in Finland. The problem started last year, when Bekvema (a pseudonym), one of the most important international customers of Nickell, established a subsidiary in Sweden. Bekvema is a centrally run corporation, with headquarters in Finland where its activities make about 70 per cent of the turnover of Nickell Finland. Tapio Mäkelä is personally in charge of the relation- ships with Bekvema and will not tolerate Per Jonson continuing with his attacks on his work
Answers
Robin is facing a potential problem with losing an important team member, Per Jonson, due to conflicts between Tapio Mäkelä and Per's attacks on Tapio's work.
Robin, the sales director of Nickell in Sweden, had a challenging day visiting a client while installing a new system. A phone call with Tapio Mäkelä, the managing director of the Nordic area, revealed the threat of losing Per Jonson, a crucial technical specialist on Robin's Swedish team. The conflict arose due to Per's attacks on Tapio's work, which Tapio, responsible for the relationships with Bekvema, a significant international customer of Nickell, cannot tolerate.
The situation presents a potential conflict within the organization, where the actions of Per Jonson are jeopardizing the working relationship between Nickell and Bekvema. The impending loss of Per, a valuable team member, creates concerns for Robin. To address this issue, Robin must carefully consider the situation and possibly communicate the circumstances to the European HR manager to seek a resolution that maintains the client relationship while ensuring a harmonious work environment within Nickell. A well-rested mind will aid Robin in making an informed decision regarding writing a report or taking other appropriate actions.
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net cash flows provided by operating activities will be ______ when using the direct method compared to the indirect method.
Answers
According to cash flow operation analysis, the net cash flows provided by operating activities will be the same when using the direct method compared to the indirect method.
Net Cash flows are used in business management to describe the profit or loss of capital in a given period.
Typically, a positive Net Cash Flows occurs when the is a surplus of cash after paying the expenses.
Hence, in this case, it is concluded that the correct answer is "the same."
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Cash flows from operating activities often shows the net amount of cash that was received or disbursed during a given period of time. Net cash flows provided by operating activities will be the same as when using the direct method compared to the indirect method.
The direct method is often use in calculating the flow that involves deducting from cash sales.Cash flow statements is simply defined as the statement that shows the cash receipts, cash payments and net changes in cash that takes place as a result of operating, investing, and financing activities in an accounting period.
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The Metchosin Corporation has two different bonds currently outstanding. Bond M has a face value of $40,000 and matures in 20 years. The bond makes no payments for the first six years, then pays $2,500 every six months over the subsequent eight years, and finally pays $2,800 every six months over the last six years. Bond N also has a face value of $40,000 and a maturity of 20 years; it makes no coupon payments over the life of the bond. The required return on both these bonds is 8% compounded semiannually, what is the current price of bond M and bond N?
Answers
Answer:
we must first calculate the effective interest rate:
the effective interest rate = 1.08 = (1 + r)²
√1.08 = √(1 + r)²
1.03923 = 1 + r
r = 3.923%
I used an excel spreadsheet to calculate the present value of bond M's coupon payments.
Bond M's price:
PV of face value = $40,000 / (1.03923)⁴⁰ = $8,582.09
PV of coupon payments = $27,449.05
market price = $36,031.14
to determine the market value of bond N (zero coupon bond) we can use the following formula:
market value = future value / (1 + r)ⁿ
market price = $40,000 / (1.03923)⁴⁰ = $8,582.09
Effective service recovery efforts can lead to _____.
Answers
Effective service recovery efforts can lead to all of the following EXCEPT increased dependence on technology to prevent future service failures. Thus the correct option is A.
What is a service?Services are referred as a type of goods that is offered to someone in terms of facilities like the one received in a restaurant or shopping mall. It is a type of commodity or product that is intangible in nature, one can only feel it.
Effective service recovery efforts can lead to better satisfaction to the ultimate consumer and they feel valued and delighted. This helps in retaining them for a longer duration of time building loyalty and goodwill in the market.
Therefore, option A is appropriate.
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The complete question is Probably
Effective service recovery efforts can lead to all of the following EXCEPT
a. increased dependence on technology to prevent future service failures.
b. increased purchase intentions.
c. increased positive word of mouth.
d. lower levels of satisfaction than prior to the service failures.
e. increased customer satisfaction.
Larry lives in a rundown house next to the lot that Gus has claimed and is tired of the incessant noise coming from Gus's camper, including loud music and TV. In addition, Gus hosts crazy dance parties outside of his camper every night. This has been going on for three months, and Larry can't take it any longer. Gus's activities represent _____. trespass trespass nuisance nuisance negligence negligence fraud
Answers
Answer:
nuisance
Explanation:
The basic components of equity theory include all of the following EXCEPT
a. reinforcement.
b. outcomes.
c. inputs.
d. referents.
Answers
The basic components of equity theory include all of the following EXCEPTreinforcement. The correct answer is a.
Equity theory is a psychological theory that focuses on the perception of fairness in social exchanges. It suggests that individuals strive for fairness in their relationships and evaluate the fairness of their own outcomes in comparison to the inputs they contribute and the outcomes received by others, known as referents. The basic components of equity theory include outcomes (rewards or benefits received), inputs (efforts or contributions made), and referents (individuals or groups used for comparison). However, reinforcement is not considered a basic component of equity theory. Reinforcement is a concept from behaviorism that refers to the use of rewards or punishments to increase or decrease the likelihood of a particular behavior. The correct answer is a.
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The statement made by Lynn Turner, former SEC chief accountant, "Are the auditors going to serve management, or are they going to serve the best interests of the investing public?", refers to concerns about:
Answers
Answer:
The correct answer is "Conflict between professionalism and commercialism".
Explanation:
As a professional service rather than partnership presents a condition that may impede the implementation including its independent review-this statement generates possible interest confliction as the impairment of the conclusion of the investigation contributes to the violation of conduct.A professional service produces a condition that may well compromise impartial judgment - The journalistic integrity of an external auditor should not be compromised according to the standard prohibition claim. This can then cause friction.So that the given statement refers to the above solution.
State two ways by which hotels may promote sales during the off season
Answers
Answer:
Use off-season imagery on your website. ...Create content dedicated to the off-season. ...Build content around weddings, meetings, sporting events. ...Update your ad copy with off-season friendly verbiage. ...Create campaigns that market off-season amenities...Explanation:
Hope it helps u
FOLLOW MY ACCOUNT PLS PLS1) Inflation represents the rate of increase of the average price of goods. If inflation decreases from 10% to 5%, does the average price of goods decrease? Explain.
Answers
No, the average price of goods does not decrease when inflation decreases from 10% to 5%.
Inflation represents the rate of increase in the average price of goods and services over time. When inflation decreases, it means that the rate of price increase has slowed down, but it does not imply a decrease in the average price itself. Even with a lower inflation rate, prices can still continue to rise, albeit at a slower pace.
The percentage of inflation indicates the extent of price increase compared to the previous period. If the inflation rate decreases from 10% to 5%, it means that prices are still increasing but at a slower rate. For example, if an item was priced at $100 at the beginning of the year, with a 10% inflation rate, its price would increase to $110. However, with a 5% inflation rate, the price would increase to $105. While the rate of increase has decreased, the average price of goods has not decreased.
Therefore, it is important to differentiate between a decrease in the inflation rate (a decrease in the rate of price increase) and an actual decrease in the average price of goods, which would indicate deflation.
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Why does the united states have limited to no trade with countries like cuba and venezuela?.
Answers
On September 4, 1961, partly in response, Congress handed the Foreign Assistance Act, a Cold War Act (among many different measures) that prohibited useful resource to Cuba and approved the President to impose a whole trade embargo towards Cuba.
What is the alternate relationship between the US and Cuba?U.S. diplomatic illustration in Cuba is handled with the aid of the United States Embassy in Havana, and there is a comparable Cuban Embassy in Washington, D.C. The United States, however, continues to preserve its commercial, economic, and economic embargo, making it unlawful for U.S. corporations to do enterprise with Cuba.
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https://brainly.com/question/25862883#SPJ4IMF enterprise is considering two mutually exclusive projects. Both projects require an initial investment of $10,000 and are typical average-risk projects for the firm. Project A has an expected life of 2 years with after-tax cash inflows of $6,000 and $8,000 at the end of Years 1 and 2, respectively. Project B has an expected life of 4 years with after-tax cash inflows of $4,000 at the end of each of the next 4 years. The firm's WACC is 10%. i. If the projects cannot be repeated, which project should be selected if IMF uses NPV as its criterion for project selection? ii. Assume that the projects can be repeated and that there are no anticipated changes in the cash flows. Use the replacement chain analysis to determine the NPV of the project selected. Show all workings (Students can copy and paste workings from Excel)
Answers
Based on the NPV criterion, Project A should be selected as it has a higher NPV of $12.05 compared to Project B's NPV of $7.03. In the replacement chain analysis, Project A still has a higher NPV of $13.83 compared to Project B's NPV of $6.91.
i. Calculation of NPV for project A using the formula NPV = Σ(Net cash inflows / (1 + WACC)^n) - Initial investment = ($6,000 / (1 + 10%)^1) + ($8,000 / (1 + 10%)^2) - $10,000 = $12.05. Project A has an NPV of $12.05. Calculation of NPV for project B using the formula NPV = Σ(Net cash inflows / (1 + WACC)^n) - Initial investment = ($4,000 / (1 + 10%)^1) + ($4,000 / (1 + 10%)^2) + ($4,000 / (1 + 10%)^3) + ($4,000 / (1 + 10%)^4) - $10,000 = $7.03. Project B has an NPV of $7.03. Since project A has a higher NPV, it should be selected if IMF uses NPV as the criterion for project selection.
ii. Calculation of NPV for replacement chain analysis of project A: NPV = $12.05 + ($6,000 / (1 + 10%)^2) - $10,000 / (1 + 10%)^2 = $13.83. Calculation of NPV for replacement chain analysis of project B: NPV = $7.03 + ($4,000 / (1 + 10%)^4) - $10,000 / (1 + 10%)^4 = $6.91. Project A has a higher NPV of $13.83 compared to project B's NPV of $6.91, so project A should be selected for replacement chain analysis. Here is a table showing the NPV calculations for both projects:
Project | Year | Net Cash Inflow | Present Value at 10% | Discount Factor | Present Value of Net Cash Inflow
A | 1 | $6,000 | $5,454.55 | 0.826 | $4,500.41
A | 2 | $8,000 | $6,601.98 | 0.683 | $4,501.31
Total | $12,001.72 | 1.40 | $12.05
B | 1 | $4,000 | $3,636.36 | 0.826 | $3,000.33
B | 2 | $4,000 | $3,305.79 | 0.683 | $2,230.32
B | 3 | $4,000 | $3,004.48 | 0.583 | $1,749.26
B | 4 | $4,000 | $2,697.87 | 0.482 | $1,301.86
Total | $7,012.77 | 9.29 | $7.03
The net present value for project A is $13.83, and the net present value for project B is $6.91.
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