In your own words, discuss the payback period, NPV (net present value), and IRR (internal rate of return) methods for capital budgeting analysis. What result does each method provide the user? What are the limitations of each of these methods? Which method would you find most useful in making the best investment decisions for your business and why?

Answers

Answer 1

Answer:

The net present value (NPV) is the most important and useful method of capital budgeting analysis. It is basically calculated by determining the present value of all the future cash flows generated by a project and then subtract the original investment cost. If the answer is positive (positive NPV) then the project should be profitable and the company should go ahead with it. The limitation of NPV results from the discount rate used to calculate the present value, since it is extremely important to use the proper discount rate and not one that is too low or too high.

The second most useful tool is the internal rate of return (IRR) which is very related to the NPV. The IRR shows us basically at what discount rate the NPV would equal 0. Generally if the IRR is higher than the discount rate the NPV should be positive.

The payback period shows us how much time it takes a project to recover the original amount of money invested in it. The payback period is only useful for some industries where early obsolescence might be a problem. E.g. technological firms only approve projects with very short payback periods because their products might be obsolete in just one or two years.


Related Questions

Florida state saving bond can be converted to $1000 at maturity date of five year from purchase if the state bond are to be competitive with the USA saving bonds which pay 1% interest compounded annually at what price will the state bonds sell

Answers

Answer:

The price will the state bonds sell would be $951.46

Explanation:

In order to calculate the price will the state bonds sell we would have to make the following calculation:

price will the state bonds sell=price to be converted/(1+interest rate)∧n

According to given data we have the following:

price to be converted=can be converted to $1,000 at maturity date of five year from purchase

interest rate=1%

n=5

Therefore, price will the state bonds sell=$1,000/(1+1%)^5

price will the state bonds sell=$951.46

The price will the state bonds sell would be $951.46

Angina, Inc., has 5 million shares outstanding. The firm is considering issuing an additional 1 million shares. After selling these shares at their $20 per share offering price and netting 95% of the sale proceeds, the firm is obligated by an earlier agreement to sell an additional 250,000 shares at 90% of the offering price. In total, how much cash will the firm net from these stock sales?

Answers

Answer:

$23,500,000

Explanation:

Angina Inc. has an outstanding of 5 million shares

The company is considering issuing an additional 1 million shares at $20 per share offering price and 95% of the proceeds gotten from the sale

An earlier agreement obligated the firm to sell an additional 250,000 shares at 90% of the offering price

The first step is to calculate the net proceeds for the shares sold

Net proceeds= Number of shares sold×price per share×percentage of sales proceed

The net proceeds for 1,000,000 shares can be calculated as follows

= 1,000,000×95/100×$20

= 1,000,000×0.95×$20

= $19,000,000

The net proceeds for 250,000 shares can be calculated as follows

= 250,000×90/100×$20

= 250,000×0.9×$20

= $4,500,000

Therefore, the total proceeds can be calculated as follows

= $19,000,000+$4,500,000

= $23,500,000

Hence the firm will realize a total cash of $23,500,000 from the stock sale.

For most producing firms:_______.
a. average total costs decline as output is carried to a certain level, and then begin to rise.
b. marginal cost rises as output is carried to a certain level, and then begins to decline.
c. average total costs rise as output is carried to a certain level, and then begin to decline.
d. total costs rise as output is carried to a certain level, and then begin to decline.

Answers

Answer:

letter a is the correct answer

Explanation:

If I was gonna be a business person what would I be and why?

Answers

Answer:

peter druker and write about him and the stuff he did write that he is the person u look up for

Simkin Corporation keeps careful track of the time required to fill orders. Data concerning a particular order appear below: Hours Wait time 22.4 Process time 7.3 Inspection time 1.9 Move time 4.5 Queue time 6.6 The manufacturing cycle efficiency (MCE) was closest to:

Answers

Answer: 0.36

Explanation:

Given the following information :

Hours Wait time = 22.4

Process time = 7.3

Inspection time = 1.9

Move time = 4.5

Queue time = 6.6

The Manufacturing Cycle Efficiency (MCE) equals:

The ratio of the process time and the throughput time

The throughput time (Manufacturing cycle) regers to the duration of time required to manufacture a particular product.

It is usually the sum of the process, inspection, move and queue time.

Therefore, throughput time equals ;

(process + inspection + move + queue) time.

(7.3 + 1.9 + 4.5 + 6.6) = 20.3

MCE = PROCESS TIME / THROUGHPUT TIME

MCE = 7.3 / 20.3 = 0.3596 = 0.36

Which of the following damages would be covered under the Liability Coverage of the Personal Auto policy? A Damage to a neighbor's riding lawn mower in the care of the insured B Damage to a rental car rented to the insured C Damage to property being transported by the insured D Damage caused to a rented garage by the insured auto

Answers

Answer: Damage caused to a rented garage by the insured auto

Explanation:

Personal Auto insurance policy is a policy that's is bought by vehicle owners in order to mitigate the costs which results from one getting in an accident with the vehicle.

Under the Liability Coverage of the Personal Auto policy, the damage that would be covered will be damage caused to a rented garage by the insured auto.

An investment adviser structured as a partnership lends money to a customer to buy recommended securities. Under NASAA's Model Rule on Unethical Business Practices of Investment Advisers, Investment Adviser Representatives, and Federal Covered Advisers, this activity is

Answers

A) acceptable, provided the securities are used as collateral for the loan and the loan conforms to the provisions of Regulation T.

B) acceptable, provided the loan is made under the provisions of Regulation T of the Federal Reserve.

C) unethical.

D) acceptable, provided the securities are used as collateral for the loan.

Answer: Unethical

Explanation: Based on the model and policy of the North America Securities Administrator's Association, the investment adviser cannot lend money to a customer to purchase recommended securities under the guise of being partners, such behavior is deemed UNETHICAL and in violation of the rule binding the practices and investment advisers and investment adviser representatives.

Customers can purchase securities by taking loans from recommended or regulated lender, broker or bank.

Jamir has decided that he needs a new car. He has found the model and color he wants for a purchase price of $25,838.

To buy the car, he must put 10 percent down, and his loan is for five years with an interest rate of 4.4 percent. His payments are $432.46.

To lease the car, he can sign a three-year contract with payments of $290. He needs to provide $1,500 up front to pay initial fees and his first month's payment. His annual mileage cannot exceed 15,000 miles.

Jamir’s new job is 25 miles away from his home. What is the most important thing he needs to consider before agrees to a lease?

Answers

Answer:

he will do more than 15,000 miles a year

Explanation:

Answer:

b) He will have to come up with a bigger down payment. c) His monthly payments will be higher.

Explanation:

can't see my options but got a question like this on edge.

How to get popular on YTube

Answers

Alright, so you can either do the clickbait way, which means you shove the latest trend in the title and do what’s trending, or you can do what your heart desires. Remember, you won’t get popular over night. It can take 1-4 years to be even remotely popular. There’s lots of competition on the app so good luck
Clickbait and advertising yourself on all social media

The owner of an interior lot has received notice that the city intends to place a sidewalk across his property. The lot measures 100' x 500'. The cost of the sidewalk is $40 per linear foot and the city will pick up 50% of the cost, with each homeowner picking up the difference. How much will this homeowner be charged in a special assessment tax to cover his cost of the sidewalk?

Answers

Answer:

The amount that he will be charged in a special assessment tax to cover his cost of the sidewalk Is $2000  

Explanation:

We are told that the property is an interior lot, so we'll only consider one of the width of his plot, since the sidewalk can only pass through the front or the back of his property.

The property measures 100' x 500' , that is 100 ft width by 500 ft length

The cost of the sidewalk is $40 per linear ft

The city will pick up 50% of the cost.

For a width of the lot, the cost per linear length will be

100 x $40 = $4000

The city covers 50% of this cost, leaving 50% of the cost to the homeowner.

The homeowner's cost will be 50% of $4000

= 0.5 x $4000 = $2000  

The amount that he will be charged in a special assessment tax to cover his cost of the sidewalk Is $2000  

Sal purchased a used toaster at a yard sale. The seller told Sal that although the toaster was more than 10 years old, she had not had any problems with it. Sal takes the toaster home and uses it for a few months. One day, however, as Sal was using the toaster, it malfunctioned and caused a small fire in Sal's kitchen along with significant smoke damage. Sal decides to sue the manufacturer of the toaster and will do so within one month of the fire. What would likely be the manufacturer's best defense in a strict liability in tort action brought by Sal?

Answers

Answer:

The manufacturer of the toaster would argue from the point of view of the warranty offered for the toaster. In most electronic products, the manufacturer offers warranty ranging from 1 year to 5 years.

For the toaster to have worked for more than 20 years without any problem shows that it was a good product. And, the warranty must have expired hence the need not to be held responsible for whatever happened to it.

Explanation:

Harry deposits $2400 in an account that pays 7% simple interest and $3500 in a second account that has a higher interest rate but is more risky. What interest rate must he get on the second account in order to earn at least $800 in interest for one year?

Answers

Answer:

18.0571%

Explanation:

Simple interest = principal x time x year

simple interest on the first investment = $2400  x 0,07 x 1 = $168

in order to earn at least $800 , he must earn $800 - $168 = $632 in the second investment

$632 = $3500 x r x 1

r = $632 / $3500 = 0,180571 = 18.0571%

When labor productivity increases over time, generally A) it is due to increases in the number of workers B) So do average wages C) It results in higher For prices for goods and services .

Answers

Answer:

The answer is B.

Explanation:

Labour productivity is given as output per unit of labour input.

When output increases in an industry, ceteris paribus, the industry may have to lower prices in order to sell that increase. When output increases(labor productivity increases), workers will demand for higher wages. This is so because the efficiency of the workers has improved and there is need for compensation.

Great Britain, Denmark, and Sweden have stayed out of the euro zone because of the Multiple Choice dollar peg advocated by some members of the European Union. implied loss of national sovereignty to the European Central Bank. volatility of the euro. reluctance to compete directly against the U.S. dollar. reluctance to be considered an optimal currency area.

Answers

Answer:

implied loss of national sovereignty to the European Central Bank

Explanation:

Unlike France, that has adopted the Euro as its currency, Great Britain, Denmark and Sweden have all decided to stay out of the Euro zone. This is because accepting the Euro as their currency will mean that the European Central Bank, through the Euro, has power over their economies as a result of exchange.

Also, staying away from the Euro zone means that the European central bank doesn't have control of  their monies among other things.

Cheers

The selling of Busch Entertainment, a theme park unit that owns SeaWorld, by Belgium-based AB InBev after the acquisition of Anheuser-Busch by InBev to ensure a focus on AB InBev’s core business, is an example of Multiple Choice a principal–agent problem. taper integration. restructuring. a diversification premium. franchising.

Answers

Answer:

The right answer is "Restructuring ".

Explanation:

Restructuring seems to be a process during which a firm keeps changing its organization's strategy as well as its path. Most restructuring procedures demonstrate laying off workers. The enterprise can fire workers, remove divisions, or shutter almost all of its stores nationwide.

So that the given instance would be an example of "Restructuring".

Suppose that kyle and lisa are both in the public eye. they get offers to sell secrets of the other to tabloids. if both keep the secrets, they are both better off than if they get exposed. if only one is exposed, the other person is better off than if no one was exposed. thier payoffs from each option are given in the payoff matrix below.

Answers

Answer:

Give us more

Explanation:

No payoff matrix included, and no question present.

a. The factor distribution of income describes the relationship between
1. factor ownership and total income.
2. technology and total income.
3. capital and total income.
b. The factor market and factor prices play an essential part in the
1. allocation of income.
2. allocation of resources.
3. distribution of goods and services.
4. allocation of finance.

Answers

Answer:

a. The factor distribution of income describes the relationship between

3. capital and total income

b. The factor market and factor prices

1. allocation of income.

Explanation:

In economics, income distribution is defined as how a nation's total GDP is distributed amongst its population. On the other-hand, The factor distribution of income is the division of total income among labor, land, and capital. Factor prices, which are set in factor markets, helps in the  determination of the factor distribution of income.

A company purchased $10,000 of merchandise on June 15 with terms of 3/10, n/45. On June 20, it returned $800 of that merchandise. On June 24, it paid the balance owed for the merchandise taking any discount it was entitled to. The cash paid on June 24 equals:

Answers

Answer:

$8,924

Explanation:

the journal entries should be:

June 15, merchandise purchased on account, terms 3/10, n/45

Dr Merchandise inventory 10,000

    Cr Accounts payable 10,000

June 20, defective merchandise returned

Dr Accounts payable 800

    Cr Merchandise inventory 800

June 24, invoice is paid within discount term

Dr Accounts payable 9,200

    Cr Cash 8,924

    Cr Purchase discount 276

Corporate parenting generates corporate strategy by focusing on:_____.
a) differentiating its activities into separate units and integrating these activities through complex integrating mechanisms.
b) the cash flow among its business units.
c) the core competencies of the parent corporation and on the value created from the relationship between the parent and its units.
d) whether a business unit should be growing, stabilizing, or retrenching.
e) acquiring distinctive competencies in the marketplace.

Answers

Answer: c) the core competencies of the parent corporation and on the value created from the relationship between the parent and its units.

Explanation:

A sole proprietorship: Multiple Choice involves significant legal costs during the formation process. has its profits taxed as personal income. provides limited financial liability for its owner. can generally raise significant capital from non-owner sources. has an unlimited life.

Answers

Answer:

has its profits taxed as personal income.

Explanation:

Some of the advantages of sole proprietorships are that they do not require expensive legal costs in order to establish them, but their two main disadvantages are that it is more difficult to raise additional funds and the owner (sole proprietor) has unlimited liability against any obligation resulting from the business. They also have a limited life, since they cease to exist if the owner dies.

What is the difference between a total and a subtotal?

Answers

Explanation:

SUB-TOTAL:

The total for a part of a list of numbers being summed.

TOTAL:

An amount obtained by addition of smaller amounts.

Answer:

subtotal is all the different parts being added together from different list.

total is the all items being added together plus tax.

Explanation:

Review the following conversation: Marcy: Dana, can I talk to you for a couple of minutes? We’ve been roommates for two years and I think I have a time management problem. I just don’t get enough done in a day. What do you think? Dana: Tell me more. How did you decide that you have a problem? Marcy: I never get everything done on my to-do list. The more I get done, the more I end up adding to the list. Dana: What would solving the problem look like to you? Marcy: Well, I’d get everything done on my list. Dana: Is that

Answers

Answer:

Coaching.

Explanation:

Coaching is demonstrated as the method of training in which a more experienced or proficient person provides suggestions and guidance to an individual(employee) with an aim to build and develop his/her skills, competence, performance, and career. The managers are required to be efficient coaches as it helps them in promoting better engagement in the team and enhancing productivity as well as customer support of the organization. It helps the managers to develop the skills in employees and boost their self-confidence which makes them able to overcome challenges effectively, improve their performance, and reach desired goals.

As Bart Brownlee approached retirement, he decided the time had come to invest some of his nest egg in a conservative fund. He chose the Franklin Utilities Fund. If he invests $30,000 and the fund charges a load of 4.25 percent when shares are purchased, what is the amount of commission (load) Bart must pay?

Answers

Answer:

$1,275

Explanation:

The computation of the amount of commission for paying is shown below:

= Invested amount × fund charges a load percentage

= $30,000 × 4.25%

= $1,275

By multiplying the invested amount with the fund charges a load percentage we can easily calculate the amount of commission and the same is to be considered

Niko is a member of a five-person community action team to address natural resource issues in his region. He notices that every time the team meets, members do not listen respectfully to each other. According to Hill’s model of team leadership Niko should ______.

Answers

Answer: Step up into a leadership role and use coaching behaviors to address internal relations

Explanation:

Taking responsibility is most timethe only way to resolve a problem in a group or society. One of the ways to go about this is having an undying passion that ensures that until the problem is resolved you won't take a break because the task in most of these sort of scenario could be frustrating and make the one who take up the task give up easily but once there's passion then the individual can rise to the occasion to ensure that things are done rightly through coaching method to meet their goal.

The two most basic inventory questions answered by the typical inventory model are: Group of answer choices Order quantity and service level Timing and quantity of orders Quantity and cost of orders Ordering cost and carrying cost Timing and cost of orders

Answers

Answer:

timing of orders and order quantity.

Explanation:

The economic order quantity is the quantity at which the carrying cost and the ordering cost is equal to each other. It depicts the number of units that added in the inventory and it makes that number of units orders so that it can lowered the total inventory cost i.e purchase cost, carrying cost and the ordering cost

On the other hand, the reorder point is the point at which the firm holds the stock and when it reaches that point at which the firm is able to reorder the items

Therefore the order timings and the quantity orders are the two basic inventory questions i.e to be answered.

In which situation would saving a Word document as a PDF be most useful?
when checking for accessibility issues
O when allowing users to make changes to a document
when users who want to view a document do not have Word
O when sending a document to a person who has no access to browsers

Answers

Answer:

its "when users who want to view a document do not have word"

Explanation:

c

Answer: C

Explanation:

What is partnership.
List the advantages and disadvantages of partnership.​

Answers

Answer:

Disadvantages of a partnership include that: the liability of the partners for the debts of the business is unlimited. each partner is 'jointly and severally' liable for the partnership's debts; that is, each partner is liable for their share of the partnership debts as well as being liable for all the debts.

Explanation:

Explanation:

PARTNER SHIP:

WHEN TWO OR MORE PEOPLE ARE IN BUSINESS TOGETHER IT IS CALLED A PARTNERSHIP. A PARTNER ACTING ALONE IN THE NAME OF THE BUSINESS BINDS THE OTHER PARTNERS.

ADVANTAGES OF PARTNERSHIP:

◇ TWO HEADS OR MORE ARE BETTER THAN ONE.

◇ YOUR BUSINESS IS EASY TO ESTABLISH AND START- UP COSTS ARE LOW.

◇ MORE CAPITAL IS AVAILABLE FOR THE BUSINESS.

◇ YOU'LL HAVE GREATER BORROWING CAPACITY.

◇ HIGH- CALIBRE EMPLOYEES CAN BE MADE PARTNERS.

◇ PARTNERS BUSINESS AFFAIRS ARE PRIVATE.

◇ IT'S EASY TO CHANGE YOUR LEGAL STRUCTURE LATER IF CIRCUMSTANCES CHANGE.

DISADVANTAGES OF PARTNERSHIP:

◇ THE LIABILITY OF THE PARTNERS FOR THE DEBTS OF THE BUSINESS IS UNLIMITED.

◇ THERE IS A RISK OF DISAGREEMENTS AND FRICTION AMONG PARTNERS AND MANAGEMENT.

◇ EACH PARTNER IS AN AGENT OF THE PARTNERSHIP AND IS LIABLE FOR ACTIONS BY OTHER PARTNERS.

◇ IF PARTNERS JOIN OR LEAVE, YOU WILL PROBABLY HAVE TO VALUE ALL THE PARTNERSHIP ASSETS AND THIS CAN BE COSTLY.

HOPE IT HELP....❣❣❣

For retirement, identifying which of the following most correlates with generating income for retirement? A. Tangible assets B. Debt C. Insurance D. Cash flow

Answers

Answer:

it should be A

Explanation:

it generating income for retirement

If average daily remittances are $6 million, and "extended disbursement float" adds two days to the disbursement schedule, how much should the firm be willing to pay for a cash management system if the firm earns 7% on excess funds

Answers

Answer:

$840,000

Explanation:

Calculation of how much should the firm be willing to pay for a cash management system

Using this formula

Annual return from cash management system = Average daily remittances × 2 days disbursement schedule× Percentage of excess funds

Let plug in the formula

Annual return from cash management system$6,000,000 × 2 days × 7%

Annual return from cash management system= $840,000

Therefore the firm be willing to pay the amount of $840,000 for thebcash management system if the firm earns 7% on excess funds.

The purchasing power of money and the price level vary: Group of answer choices inversely. directly during recessions, but inversely during inflations. directly, but not proportionately. directly and proportionately.

Answers

Answer:

Option "Inversely" is correct.

Explanation:

Option “Inversely” is correct because the increase in price level exhibits inflation and a rise in inflation decreases the purchasing power of money. However, if the price level decreases or inflation decreases, then the purchasing power of money increases. Therefore we can see that increase in price level decreases the purchasing power and a decrease in price level increases the purchasing power. Therefore, there is an inverse relationship.

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3 pumps, working 8 hours a day, can empty a tank in 2 days. How many hours a day must 4 pumps work to empty the tank in 1 day?a) 8b) 9 c) 10 d) 11 e) 12 What is the nth term rule of the quadratic sequence below? 7, 14, 23, 34, 47, 62, 79 Please could someone help me and write a step by step explanation? Thanks :D Order these species by increasing concentration of H30+ in a 1.0 M aqueous solution. (From thesolution with the least hydronium concentration to the solution with the most hydronium concentration)NOH2CO3, NH4, OH, HCO3, NH3, H20HomeirH2CO3,NH4+, OH", HCO3, NH3,H20PasteH20, H2CO3, NH4+, OH", HCO3-NH36conOOH", NH3, HCO3, H20, NH4+,H2CO3None of the answer choices arecorrect. Please can anyone still help me with the correct answer. Which of the lines in the picture are lines of symmetry of the given figure? Please explain! Find the missing length. which is the correct answer ? please help ! simplify to create an equivalent expression 2(-3k-5)a) -6k - 10 b) 16k + 10 c) 6k + 10 d) 3k + 7 When Gene and Kelly were planning their trip to Paris, one United States dollar was worth about $\frac{7}{10}$ of a euro. Before they left, they took 1,000 dollars to the bank and converted them into euros. Two weeks later, they returned home to the United States with 196 euros. To the nearest dollar, how many dollars did they bring back? solve for b. b - 7/4 = -2/3 Which action best illustrates the process of making an interpretation?A. A historian publishes an article describing life in Africa during the1980s but fails to cite any credible sources to support herconclusions.B. A historian who personally dislikes communism accuses one ofher colleagues of writing a biased essay about that philosophy.C. A historian reads a secondary source about the Cold War to findout the dates and locations of important historical occurrences.D. A historian reads a letter written by a soldier in the Vietnam Wahnand makes a generalization about the experiences of othersoldiers in that war. A mixture is best described as:A. None of theseB. A pure chemical substance consisting of one type of atom.OC. The basic building blocks of matter.D. Two or more elements or compounds that are mixed together but not chemically bonded. A uniform electric field exists in the region between two oppositely charged plane parallel plates. A proton is released from rest at the surface of the positively charged plate and strikes the surface of the opposite plate, 1.60 cm distant from the first, in a time interval of 3.20106s3.2010 6 s. (a) Find the magnitude of the electric field. (b) Find the speed of the proton when it strikes the negatively charged plate. Someone please help me its 20 points please help!!! The Driftbuster Sno-Mobile repair company has a seasonal demand for its service, and there is a general shortage of skilled Sno-Mobile mechanics in it's region. Which one of the following aggregate planning choices is most suitable for this situationA. Allow some backorder for short-term demand surges B. Combination of allowing backorder for short-term demand surges and building anticipation inventories. C. Combination of hiring/firing workers to match demand and building anticipation inventories. D. Combination of allowing backorder for short-term demand surges and offering reduced prices during the slack season. When I square my number, I get the same answer as when I multiply my number by 10 and then add 144. My number is positive. What is it? The perimeter of a square is 8cm. what is the area? Bethesda Water has an issue of preferred stock outstanding with a coupon rate of 4.80 percent that sells for $92.78 per share. If the par value is $100, what is the cost of the company's preferred stock? Which short-term environmental change would a very small asteroid or comet impact on Earth most likely cause? flooding extinction surface craters weather pattern changes Please help me solve this! Hurrryy plzzz!!Which linear inequality is represented by the graph?y1/2x+2y1/3x+2