<u>Solution and Explanation:</u>
Answer 1 The Net present value = the Present value of all the cash inflows minus the present value of all the cash outflows
= $171428.57
Answer a-2) yes, definitely the business should be started as the net present value is positive.
Answer b) Break even growth rate = the required rate – Cash flows / investment
= 3.37 percent.
Answer:
c. GDP increases by $22.00.
Explanation:
The GDP is the sum of all final goods and services produced in an economy within a given period.
GDP = Consumption spending + Investment + Government Spending + Net Export
Only final goods and services are included in the calculation of GDP.
The wheat purchased by Wholesome Wheat Bakery is an intermediate good whuch is still used in the production of bread. Therefore, it isn't included in the calculation of GDP.
Bread is a final good and it's included in the GDP. Therefore, GDP increases by $22.
I hope my answer helps you.
Answer:
If the number of male and female buyers is the same, then the best pricing strategy is to offer 2 different microwaves (option 3). One simple and cheap microwave for men and one with auto-defrost for women.
Explanation:
If most buyers were women (significantly higher), then option 2 would be better, since $121 per microwave is a much higher price and even though total sales numbers may not be maximized, profits will probably be maximized.
If most buyers are men, then option 1 would be probably better, depending on the proportion of male vs female buyers.
Answer:
$40,000 per year; $37,500 per year; $40,000.
Explanation:
From the question above, we are given the following parameters; Alpha Firm offers a salary = $40,000 per year + no bonuses, "Beta Firm offers a base salary of $35,000 per year with a 25% chance that you will receive an annual bonus of $10,000".
So, to answer the question,the expected salary of working for Alpha Firm will surely be = $40,000 per year.
At Beta Firm the expected salary is = $35,000 + 0.25($10,000) = $37,500.
Therefore, if I was risk neutral, the expected value of the year bonus offered by Beta Firm would need to be at least $40,000 for me not to be indifferent to the choice between the two options.
