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Nataly [62]
2 years ago
3

A farm must decide whether or not to purchase a new tractor. The tractor will reduce costs by $2,000 in the first year, $2,500 i

n the second and $3,000 in the third and final year of usefulness. The tractor costs $9,000 today, while the above cost savings will be realized at the end of each year. If the interest rate is seven percent, what is the net present value of purchasing the tractor?
Business
1 answer:
Masteriza [31]2 years ago
5 0

Answer:

Net present value of purchasing tractor is -$2498.35.

Explanation:

Tractor Cost = $9,000

PV of Year 1 saving = $2,000 ( 1 + 0.07 )^-1 = $1,869.16

PV of Year 2 saving = $2,500 ( 1 + 0.07 )^-2 = $2,183.60

PV of Year 1 saving = $3,000 ( 1 + 0.07 )^-3 = $2,448.89

Net Present Value = ($9,000) + $1,869.16 +  $2,183.60 + $2,448.89

Net present value = ($2498.35)

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Answer:

C. $4000

Explanation:

Given that

Total opportunity cost = salary plus interest forgone, that is 50,000 + 6% of 100,000

= 50,000 + 6000 = 56,000.

Total revenue received = 60,000

Recall that

Economic profits = Revenue - (implicit + explicit cost)

And that

Implicit cost = opportunity cost = 56,000

Explicit cost = 0 (from the question, revenue covered it)

Thus

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2 years ago
What are the managerial implications of a borderless organization?
Andrews [41]
<span>In my opinion, the managerial implications of a borderless organization could be a language barrier: complete from a different spoken language to even just day to day colloquial words or phrases. Another could be different labor laws in different countries. Another big one is the fact that different time zones could come into play and if improperly accounted for or organized with, this could really turn business upside down.</span>
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Companies should conduct environmental analyses before beginning to do business internationally in order to evaluate potential f
Nezavi [6.7K]

Companies should conduct environmental analyses before beginning to do business internationally in order to evaluate potential for problems associated with different markets and to develop a strategy for those markets. SWOT matrix plan strategy market product

Explanation:

A SWOT analysis is a major component of strategic campaign strategy.

SWOT is the term for assessing power, vulnerability, opportunities and risks and is an effective tool for the growth, development or preparation of marketing strategies in general.

SWOT analysis is sometimes viewed as the primary strategic phase in the implementation of a marketing strategy. SWOT analysis is disappointingly simplistic given its enormous value.

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5 0
2 years ago
Which of these is the interest rate that is actually observed in financial markets? real risk-free rate real interest rates nomi
Eduardwww [97]

Answer: Nominal interest rate.

Explanation:

Nominal interest rate is the interest rate before inflation is taken into account.

Nominal interest rate is also the advertised or interest rate stated on a loan, without adding any other fees or compounding the interest.

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he following amounts were reported by Howe Company before adjusting its overapplied manufacturing overhead of $16,000. Raw Mater
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COGS after overapplied overhead is disposed of = COGS before disposal - overapplied amount

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