Answer: a deal website that compares different types of cars, so he can choose the one he likes best
Explanation:
When buying a good or service, it is best to look out for a variety of those goods because it will enable a person to be able to compare the different varieties and be able to pick the one most suitable for them.
Tanner therefore will most likely use a website that compares cars so that he is able to see the features that different cars offer which will enable him make a decision that is most suitable for him.
Answer:
c. 2.35%
Explanation:
10 year T bond Yield = 5.05 % (let it be rT10)
10 year TIPS yield = 1.8 % ( let it be r* )
MRP = 0.9%
Expected Inflation = rT10 - r* - MRP
= 5.05 % - 1.8 % - 0.9%
= 2.35 %
Therefore, The expected rate of inflation over the next 10 years is 2,35%.
Answer:
- ($51,306)
Explanation:
Given that,
Loss of Contribution = $75,000
Fixed costs will be eliminated by dropping the CUP line = $23,694
Net loss on dropping cup line:
= Loss of contribution - Gain on fixed costs on dropping cup line
= $75,000 - $23,694
= - ($51,306)
Therefore, the net effect on dropping the cup line on net income is $(51,606).
Answer:
net pension expense (or revenue) under U.S.GAAP is $600
Explanation:
the past service cost included in the 2013 net pension expense ( or revenue) under U.S. GAAP is calculated below;
past service cost = { ( <u>increase PSC for vested employees</u>)
(remaining working life of vested employees)
+
{(<u> increase PSC for non-vested employee)</u>}
( remaining working life of non- vested employees)
past service cost = { $5000/10years) + ( $ 2000/20years)
past service cost = $500 + $100
past service cost =$600
Therefore the past service cost included in the 2013 net pension expense (or revenue) under U.S.GAAP is $600
Answer:
a. Internal Rate of Return
Annual Cash Inflows = (Net Savings - Depreciation) * ( 1 - Tax Rate) + (Depreciation * Tax Rate)
Net savings = Delivery Costs - Operating and Maintenance Costs with the Used Truck
= 32,000 - 21,000
= $11,000
Depreciation = (Cost of used truck - Salvage value) / Useful life
= (13,000 - 2,000) / 3
= $3,667
Annual Cash inflows = $7,000 as there are no taxes.
Use Excel to calculate IRR as shown in the attachment.
The cost of the truck is the outflow and the savings and the salvage value are inflows which means that the last inflow will be $13,000 because salvage value is added in the last year.
IRR = 69.408%
b. If the IRR is greater than the cost of capital or required rate of return, the project should be chosen.
c. The IRR of 69.408% is greater than the MARR of 34% so Nancy should buy the truck.
