Answer:
NPV -6,422.07908
The investment is not profitable at current cost of capital os 11.6%
Explanation:
Sister Pools 11.6% after tax cost of capital
Contructions 10.3% after tax cost of capital
- 85,000
cash flow 17,000 for next 7 years
<u>We will calculate the present value of a 7-years annuity of 17,000 at 11.6% </u>rate
<em>We use Sister Pools rate because we are asked for this company and there is no indication about a change in the cost of capital condition.</em>
<em />
PV = 78,577.92092
<u>Next we subtract the investment cost to get the Net Present Value</u>
78,577.92092 - 85,000 = -6,422.07908
Answer:
The correct answer is -3.963%.
Explanation:
According to the scenario, the given data are as follows:
Interest rate = 7.85%
Rate of inflation = 12.3%
So, we can calculate the real interest rate by using the following method:
Real interest rate =[ (1 + Interest rate) ÷ ( 1 + inflation rate) ] - 1
By putting the value, we get,
Real interest rate =[ (1 + 0.0785) ÷ ( 1 + 0.123) ] - 1
= -3.963%
So, the purchasing power of your savings decreased by 3.963%.
<span>The following properties can be classified as those associated with metal elements: having a high density, malleable, and having low melting points.
The following properties can be classified as those associated with non-metal elements: dull and nonreactive to acids.</span>
Answer
lost / lost
A company CEO created an ethics policy, made ethical training mandatory and installed feedback systems for ethics violation. When ethics violations were reported to the executives however, no changes or reprimands were made. Consequently, the policies ____lost____ value and executives __lost______ the respect of employees
Explanation:
Creating ethics policies is extremely important for an organization to align employee behavior with its organizational culture. Business values, when clearly and effectively established, help at various organizational levels, such as good team relationships, conflict resolution, and effective communication among all employees. In the above question, as there was no compliance with the ethics policy implemented by the CEO and no correction of the failures, there was a lost of value of the policy and lost of respect for employees.
Cost of Making the product is as below, We shall exclude the amount of $3 per unit of fixed cost as it is not a relevant cost
Cost of Manufacturing Cost of Buying Difference
Direct Materials $5
Direct Labour $15
Variable Overheads $10
Fixed Overheads $2
Total Manufacturing Cost $32
Total Purchase Cost $37
Total Cost (12000 Units) 384000 444000 60000
Rent Income (40000) (40000)
Total Difference 20000
Thus as can be observed above the company incurs an extra cost of $20000 if it purchases the component from a third party. Thus its advisable if the company produces the component in its own premises.
