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ankoles [38]
2 years ago
6

Casey Nelson is a divisional manager for Pigeon Company. His annual pay raises are largely determined by his division’s return o

n investment (ROI), which has been above 20% each of the last three years. Casey is considering a capital budgeting project that would require a $3,500,000 investment in equipment with a useful life of five years and no salvage value. Pigeon Company’s discount rate is 16%. The project would provide net operating income each year for five years as follows: Sales $ 3,400,000 Variable expenses 1,600,000 Contribution margin 1,800,000 Fixed expenses: Advertising, salaries, and other fixed out-of-pocket costs $ 700,000 Depreciation 700,000 Total fixed expenses 1,400,000 Net operating income $ 400,000 Click here to view Exhibit 14B-1 and Exhibit 14B-2, to determine the appropriate discount factor(s) using tables. Required: 1. What is the project’s net present value? 2. What is the project’s internal rate of return? 3. What is the project’s simple rate of return? 4-a. Would the company want Casey to pursue this investment opportunity? 4-b. Would Casey be inclined to pursue this investment opportunity?
Business
1 answer:
Masteriza [31]2 years ago
3 0

Answer:

1. What is the project’s net present value?

  • NPV = $101,723

2. What is the project’s internal rate of return?

  • IRR = 17.24%

3. What is the project’s simple rate of return?

  • simple rate of return = 11.43%

4-a. Would the company want Casey to pursue this investment opportunity?

  • Yes, since the NPV is positive

4-b. Would Casey be inclined to pursue this investment opportunity?

  • No, since it will decrease the average ROI

Explanation:

initial outlay = -$3,500,000

cash flow years 1-5 = $400,000 + $700,000 = $1,100,000

discount rate = 16%

using a financial calculator:

NPV = $101,723

IRR = 17.24%

simple rate of return = $400,000 / $3,500,000 = 11.43%

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First National Bank (FNB) has a reserve ratio of 20 percent, a required reserve ratio of 10 percent, and deposits of $1,000. If
Vadim26 [7]

Answer:

The correct answer is then it has required reserves of $110 and holds excess reserves of $190.

Explanation:

According to the scenario, computation of the given data are as follows:

Total deposit = $1,000 + $100 = $1,100

So, we can calculate the total reserve required by using following formula:

Total reserve required = 10% × Total deposit

= 10% × $1,100 = $110

And Previous excess = $100

Current access = $90

So, Excess reserve =  Previous excess +  Current access

= $100 + $90

= $190

5 0
2 years ago
Which of the following terms is used to describe the actors and forces outside marketing that affect marketing management's abil
larisa86 [58]

Answer:

A.the marketing environment

Explanation:

The Marketing Environment includes the Internal factors (employees, customers, shareholders, retailers & distributors, etc.) and the External factors( political, legal, social, technological, economic) that surround the business and influence its marketing operations.

Some of these factors are controllable while some are uncontrollable and require business operations to change accordingly. Firms must be well aware of its marketing environment in which it is operating to overcome the negative impact the environment factors are imposing on firm’s marketing activities.

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2 years ago
Read 2 more answers
Bluebird Mfg. has received a special one-time order for 15,000 bird feeders at $3 per unit. Bluebird currently produces and sell
Orlov [11]

Answer:

Net income will increase by $11,250

Explanation:

Provided information,

Current sales = 75,000 units which represents 80% capacity

Therefore, 100% capacity = \frac{75,000}{0.8} = 93,750 units

Fixed cost at 100% capacity = $1.25 \times 93,750 = $117,187.50

Therefore,

Current net income

Sales = 75,000 \times $7.00 = $525,000

Less: Variable cost = 75,000 \times $3.50 = $262,500

Less: Fixed Cost = $117,187.50

Net Operating Income = $145,312.50

Now with the additional order, which is of 15,000 units the additional ideal capacity of 20% will be utilized, further no fixed cost will be incurred, as the entire fixed cost for 100% capacity is utilized, thus

Sales = 15,000 \times $3 = $45,000

Less: Variable cost = 15,000 \times $2.25 = $33,750

Net Income = $11,250

Thus, the net income will increase by $11,250

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1 year ago
The ​ S&P 500 index delivered a return of 10​%, 15​%, 15​%, and −25​% over four successive years. What is the arithmetic ave
natali 33 [55]

Answer:arithmetic average annual return per​ year= 3.75%

Explanation:

Year 1 = 10%

Year 2= 15%

Year 3 = 15%

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total return = 15%

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2 years ago
Think about the ideal job that you would like to obtain after graduation. Describe this job, the kind of manager you would like
marusya05 [52]

Answer:

Please find the detailed answer as follows:

Explanation:

1. Expectancy is an individual's recognition of the degree to which exertion will bring about a specific degree of execution. Instrumentality is an individual's discernment about the degree to which execution at a specific level will bring about the accomplishment of results. Valence alludes to how alluring every result accessible from an occupation or association is to an individual. High anticipation is the conviction that a significant level of exertion will bring about an elevated level of execution. High instrumentality is the conviction that a significant level of execution will bring about the achievement of wanted results.

High valence is emotional and alludes to inclinations for specific results over others. Managers can impact levels of anticipation, instrumentality, and valence. High anticipation can be empowered by communicating trust in representatives' capacities, holding workers to elevated requirements, and giving representatives self-rule and duty. Chiefs can likewise furnish workers with preparing to guarantee mastery required for the elite. High instrumentality can be urged by connecting execution to results and unmistakably imparting this linkage to all workers. Directors additionally need to figure out which results have high valence for authoritative individuals and ensure that those results are given when individuals perform at a significant level.

2. A referent is somebody to whom the examination is made to decide whether treatment is impartial. A referent could be someone else or a gathering of individuals who are seen to be like themselves. The referent could likewise be an individual from a past activity or one's assumptions regarding what result/input proportions ought to be. Workers feel impartially treated when they feel that their result/input proportion is equivalent to a referent's result/input proportion. Value has to do with reasonableness of results comparative with inputs.

Supervisors can assist representatives with feeling impartially treated by ensuring that the individuals who contribute numerous information sources are remunerated with a bigger number of results than the individuals who contribute fewer data sources. In the event that an individual changes one part of their proportion, the director should ensure that the opposite side of the proportion changes too. In the event that sources of info increment, results should increment. On the off chance that sources of info decline, results should diminish also.

3. An objective is a thing that an individual is attempting to achieve through their endeavors and conduct. The objective setting hypothesis proposes that to bring about high inspiration and execution, objectives must be explicit and troublesome. Objectives are normally quantitative, for example, a measure of product sold, or time expected to complete a venture.

Directors might be altogether answerable for defining objectives, or workers may take an interest in the definition of objectives to guarantee acknowledgment and duty to the objectives. Notwithstanding whether explicit, troublesome objectives are set by administrators, laborers, or both together, they lead to elevated levels of inspiration and execution. Administrators additionally add to the objective setting by giving criticism about how representatives are getting along. This input enables the two administrators and representatives to decide progress and causes them to reconsider objectives when essential.

4. A need is a requirement or necessity for endurance and prosperity. Maslow distinguished five essential sorts of requirements: physiological, wellbeing, belongingness, regard, and self-completion needs. Maslow recommended that individuals contrast in what needs they are attempting to fulfill at work. Herzberg concentrated on two components: helper needs identified with the idea of the work, and cleanliness needs identifying with the physical and mental setting in which the work is performed.

Directors can assist representatives with satisfying their needs at work by figuring out which needs an individual is attempting to fulfill at work. It is the chief's obligation to guarantee that the individual gets results that help to fulfill those necessities when the individual performs at an elevated level and enables the association to accomplish its objectives. By doing these things, directors can persuade workers to perform at a significant level. Directors need to adjust the interests of individual individuals to the interests of the association in general. Likewise, Herzberg's model stresses the differentiation among inherent and extraneous inspiration, which is significant for administrators to consider in structuring and advancing employments.

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2 years ago
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