Using the cost of capital in this scenario will overestimate the npv.
The minimum rate of return or profit that a business must achieve before creating value is known as the cost of capital. The accounting department of a company computes it to assess financial risk and determine whether an investment is appropriate. In the hypothetical situation, the company will overvalue the potential of a risky endeavor. Risk causes the cost of capital to increase.
For instance, bonds, which are quite safe, are inexpensive. Stocks have a greater price because investors expect a larger return to make up for the higher risk. In essence, the investors would want a larger expected return to make up for the risk if they knew the newly appointed manager was likely to lose their money on a number of riskier projects.
Read more about the cost of capital on:
https://brainly.com/question/28042295
#SPJ4
when large corporations with multiple divisions and many different products/services and brands find it difficult to manage all the advertising, promotional, and other functions, they often use group of answer choices a decentralized system an automated system a preset system a manual system
large corporations with multiple divisions and many different products/services and brands use an agency (a) decentralized system.
It is quite difficult to manage all the advertising, promotional, and other duties through a single department in large businesses with several divisions and a wide range of products. These enterprises typically operate under a decentralized structure with independent manufacturing, R&D, sales, and marketing divisions for different divisions, product lines, or businesses. Under this arrangement, the brand manager, who closely collaborates with the outside advertising agency and other marketing communications specialists as they build the promotional program, is given the duties and obligations often associated with advertising and promotions agencies.
The brand manager may also collaborate with the company's sales, marketing research, and advertising and promotion departments in other marketing-related capacities.
Learn more about agency decentralized system at
https://brainly.com/question/28507206?referrer=searchResults
#SPJ4
The bond typically observed when a metal bonds to a nonmetal is the _____ bond. The metal atom _____ one or more valence electrons while the nonmetal _____ electrons.
The bond typically observed when a metal bonds to a nonmetal is the Ionic bond. The metal atom loses one or more valence electrons, while the nonmetal Gains electrons.
What is Ionic bond?Ionic bonds, also known as electrovalent bonds, are a type of linkage created in a chemical molecule by the electrostatic attraction of ions with opposing charges. When the valence (outermost) electrons of one atom are permanently transferred to another atom, a bond of this kind is created. If an atom receives electrons, it becomes a negatively charged ion (cation), but if it loses them, it becomes a positively charged ion (cation) (anion)Ionic or electrovalent compounds are produced via ionic bonding, and the compounds generated between nonmetals and alkali and alkaline-earth metals serve as the best examples of this type of compound. The electrostatic forces of attraction between opposite charges and repulsion between comparable charges orient the ions in these types of ionic crystalline solids so that every positive ion is surrounded by a negative ion, and the opposite is true. In other words, because of the way the ions are structured, the positive and negative charges alternate and balance one another, leaving the substance overall with no charge. In ionic crystals, electrostatic forces have a considerable magnitude. These substances thus tend to be solid and nonvolatile.To learn more about ionic bond, refer to
https://brainly.com/question/2687188
#SPJ4
based on interest rate parity, the larger the degree by which the foreign interest rate exceeds the u.s. interest rate, the:
Based on interest rate parity, the larger the degree by which the foreign interest rate exceeds the u.s. interest rate, the forward discount
Interest rate Equality( IRP) is a proposition according to which the interest rate differential between two countries is equal to the differential between the forward exchange rate and the spot exchange rate.
Interest rate equality( IRP) states that the foreign currency's forward rate decoration or reduction is roughly equal to the interest rate differential between the United States and the foreign country. However, also foreign investors will earn the same returns as U, If interest rate equality( IRP)exists.S. investors.
The equality condition suggests that real interest rates will equate between countries and that capital mobility will affect capital overflows that exclude openings for arbitrage. There exists strong substantiation that RIRP holds tightly among arising requests in Asia and also Japan.
Learn more about discounts here;
https://brainly.com/question/7459025
#SPJ4
which of the following is an effective strategy for personal saving? wait until the end of the month and save whatever is left in your checking account save a certain percentage of each paycheck and deposit it directly into a savings account cover all of your wants and needs and save whatever is left over take out a payday loan so you can save before you receive your paycheck
b) Save a certain percentage of each paycheck and deposit it directly in a savings account. Common strategy for saving money is called the 50-30-20 rule.
Get a clear view of your financial condition to help you better arrange your savings goals. Another clever strategy to enhance your savings is to automate it.
One simple approach to keep your savings and expenditures separate is to put your savings on autopilot. When money first appears in your checking account, it's tempting to spend it. Automating your savings can help you resist that urge.
You may automate your savings in two ways: by dividing your direct deposit in half and directing a portion of it to a savings account; and by establishing a periodic transfer from your checking account to your savings account.
Typically, you can utilise direct deposit to put a set amount or a certain percentage of your paycheck into a savings account.
For more information about savings account
https://brainly.com/question/3811440
#SPJ4
jim roy visits the doctor for his annual check-up which costs $85. he is billed for this at the end of the month. what type of credit did jim use?
Jim used revolving credit for his annual checkup.
The most you can spend on a revolving credit account is called the credit limit. You have the option of paying off the entire balance at the end of each billing cycle, carrying a balance over to the next month, or "revolving" the balance.
You'll be required to pay the minimum payment each month if you revolve a balance. You can discover further information in the fine print of your revolving credit agreement. This could be a fixed amount, like $25, or a percentage of your overall balance, whichever is higher. On the sum that is carried over from month to month, you will also be charged interest. Revolving credit is a term used to describe borrowing against a credit line. Assume a lender grants you a certain amount of credit that you can use again. The amount of credit you are permitted to use each month is known as your credit line or credit limit. You are free to use all or a portion of your credit limit for any purchase.
Learn more about revolving credit at
https://brainly.com/question/5540463
#SPJ4
Ayla is monitoring sales after release of a tv advertisement for her new line of non-gmo snack foods. The fact that this particular ad might not cause consumers to make an immediate purchase is a result of.
There are many possible causes for this, one of which is that the promoted product has not yet won the acceptance of the general public. This could be the rationale behind the advertisement Ayla saw for her new line of non-GMO snack items.
What do you mean by the GMO?GMOs, or GM for genetically modified foods, is another frequently used shorthand.
Any organism whose genes have been artificially altered is considered a GMO.
One form of "unnatural" gene alteration entails splicing a gene from one species into another.
GMOs include animals, insects, and pharmaceuticals that have undergone genetic alteration in addition to food products. Insulin was the first pharmaceutical created by genetic engineering.
Therefore, there are many possible causes for this, one of which is that the promoted product has not yet won the acceptance of the general public. This could be the rationale behind the advertisement Ayla saw for her new line of non-GMO snack items.
To know more about the GMO, visit:
https://brainly.com/question/28211337
#SPJ1
howard beale's transformation characterizes the turn from news as reporting to news as punditry and affect management group of answer choices true false
True The transition from news as reporting to news as pundit and affect management is characterised by Howard Beale's transformation.
A pundit is a person who provides commentary or analysis to the media on a given subject (most typically politics, the social sciences, technology or sport).
In the television series Network, Beale, the anchorman for the UBS Evening News, struggles to accept the consequences of the social evils and immorality present in the world. Beale, a seasoned and well-respected anchorman who began his career in 1950 at UBS, had his ratings decline gradually but steadily beginning in 1969. In 1970, after his wife died, he became lonely and began abusing alcohol.
Learn more about pundit here:
https://brainly.com/question/15863669
#SPJ4
elling accounts receivable to obtain short-term funds is called multiple choice equity financing. debt financing. pledging. factoring.
Selling accounts receivable to obtain short-term funds is called factoring.
What are the short term funds?Short-term funds are debt funds that make loans to businesses for a time frame of one to three years. These funds typically invest exclusively in high-caliber businesses that have a track record of making on-time loan repayments and that generate enough cash flow from activities to support the borrowing.You make short-term investments if you plan to hold them for fewer than three years. You can consider investments like equities if you have a longer time horizon, preferably one of at least three to five years. Stocks have a greater potential for gains.To learn more about Short-term investments refer to:
https://brainly.com/question/16261301
#SPJ4
which is not a form of functional assessment? 2.5 points a) functional behavior analysis b) indirect functional assessment c) descriptive functional assessment d) forced choice
Forced choice is not a form of functional assessment.
What is assessment?Assessment refers to the systematic form for making inferences about student learning and development. It is the process of defining, selecting, designing, collecting, analyzing, interpreting, and using information to enhance student learning and development. Definition of assessment is test or analysis. An example of an assessment is the academic aptitude test. Similar definition Valuation is often defined for tax purposes as an indication of the value of an asset. There are two main form of assessment, each occurring at different points in the learning process: formative assessment, both before and during the learning process, and at the end of critical segments of the learning cycle. It is a summative evaluation performed on Or at the end of the learning process.To learn more about assessment from the given link :
https://brainly.com/question/28046286
#SPJ4
if the economy is at equilibrium, then an expansionary monetary policy will: group of answer choices reduce unemployment, but have little effect on inflation. reduce both unemployment and inflation. reduce unemployment, but increase inflation. have no effect on both unemployment and inflation.
if the economy is at equilibrium, then an expansionary monetary policy will reduce unemployment, but have little effect on inflation. Therefore option A is correct.
What is Inflation?Price increases, or inflation, can be thought of as the gradual loss of purchasing power. The average price increase of a selection of goods and services over time can serve as a proxy for the rate at which purchasing power declines.
Human requirements go beyond simply one or two things, even if it is simple to track price changes over time for certain products. For a comfortable life, people require a wide variety of items as well as a variety of services. Commodities like food grains, metal, and fuel are among them, as are utilities like power and transportation, as well as services like labor, entertainment, and health care.
Therefore option A is correct.
To learn more about Inflation follow the link.
https://brainly.com/question/252791
#SPJ1
what is the name for an unforeseen event that causes stress during a project? project deliverable red flag mitigated risk innovative approach
An unexpected occurrence that stresses out a project is known as a red flag.
Any activity that is carefully planned to accomplish a specific objective, whether it is done alone or in a group, and may include research or design, is referred to as a project.
A different perspective sees a project as a series of activities that must be completed in a specific order and within specific financial and other constraints.
A project may be a transient (rather than a permanent) social system (work system) that is staffed by teams (from within or across organizations) to complete specific tasks within a set amount of time.
A project might be a component of a larger program management effort or work independently. Be aware that open-source software "projects" or artists' musical "projects" (for instance) might not have clearly defined team members, exact planning, or time limits.
Learn more about project here:
https://brainly.com/question/20595575
#SPJ4
the effect on the accounting equation of declaring a dividend that will be paid at a later date includes a(n): multiple select question. decrease in stockholders' equity. decrease in assets. increase in liabilities. decrease in liabilities. increase in assets. increase in stockholders' equity.
The effect on the accounting equation of declaring a dividend that will be paid at a later date includes a(n) increase in liabilities decrease in SE.
Enterprise accounting is the systematic recording, reading, interpreting, and imparting of economic records. Accounting may be accomplished by way of one man or woman in a small enterprise, or by way of specific groups in huge organizations. Accounting is the way an enterprise keeps the music of its operations.
Accounting is the process of recording financial transactions referring to an enterprise. The accounting method consists of summarizing, analyzing, and reporting those transactions to oversight organizations, regulators, and tax collection entities.
Learn more about accounting here: https://brainly.com/question/25568979
#SPJ4
monopolistically competitive firms in long run equilibrium produce at than the optimal scale. group of answer choices more than exactly less than sometimes more and sometimes less than
In the monopolistic competition, the long-run equilibrium always results in zero economic profit at a location to the left of the average total cost curve's minimum.
The long-term economic gains or losses in monopolistic competition will be removed by entry or leave, leaving firms with no economic gains. There will be some excess capacity in a monopolistically competitive business; this could be seen as the price paid for the variety of products that this market structure brings about. Businesses in monopolistic equilibrium competition continue to produce at a level where marginal cost and marginal revenue are equal over the long term.
To learn more about monopolistic, click here.
https://brainly.com/question/14055453
#SPJ4
it will cost me $2,250 today to buy into the annuity. assuming a discount rate of 6.5%, what is the npv of this potential investment?
The NVP of this potential investment is -$50.17.
Potential Investments wealth a potential property that We are considering making to a Borrower the key facts and facts that are proved on each Lender's Dashboard and on that each Lender may endure a Bid.
Net present value (NPV) is a commercial rhythmical that inquires to capture the total advantage of financing time. The plan behind NPV search out the project of all of the future cash inflows and outflows to guide an asset, discounting all those future cash flows to the epoch, and therefore adjoin the ruling class together.
The present value of the annuity.
500/(1+.065) + 600/(1+.065) + 700/(1+.065) + 800/(1+.065)
= $2,199.83 is
NPV is equal to the present value of the annuity minus the initial cost.
NPV = $2,199.83 - 2250
= -50.17
To know more about NPV visit here: https://brainly.com/question/13084964
#SPJ4
why would zoning be important for an office tower with an aluminum and glass curtain wall exterior? what types of zones would you expect to have? 1
By keeping air and water out of the building, curtain walls essentially act as a buffer and an insulator. Curtain walls will be easier (and less expensive) to maintain, endure longer overall, and have an additional built-in protective layer.
A curtain wall is a lightweight, non-structural structure that covers the exterior of a building with the goal of shielding the interior from the elements. Curtain walls typically consist of an aluminum frame with an infill of glass, metal, or thin stone. Curtain walls are designed to prevent water from getting inside the system and to keep the interior dry. reduce the building's sway. Strong wind stress is specifically distributed by curtain walls, increasing the building's overall steadfastness.
Read more about aluminum and glass at
https://brainly.com/question/2356182
private loan companies may be found in many places. there are , regional, and local lenders, and even individual entrepreneurs who loan money.
Private loan providers can be located everywhere. Money is lent by national, regional, local, and even individual business owners.
Greater than local but smaller than national is regional. The regional forecast provides you with additional information, possibly covering a number of counties, an entire state, or even multiple states. The local forecast only covers your city and perhaps a few of its suburbs.
The idea that local issues only concern a certain region inside a country, regional issues only affect a specific geographic region, like Europe or Asia, and global issues are worldwide issues that affect all areas of the world is oversimplified.
Economically underprivileged communities are encouraged by regional development to improve their social, cultural, environmental, and economic conditions.
Read more about individual entrepreneurs at
https://brainly.com/question/4505620
#SPJ4
one determinant of the long-run average unemployment rate is the a. rate of growth of the money supply, while the inflation rate depends primarily upon the market power of unions. b. existence of efficiency wages, while the inflation rate depends primarily upon the extent to which firms are competitive. c. minimum wage, while the inflation rate depends primarily upon the money supply growth rate. d. market power of unions, while the inflation rate depends primarily upon government spending.
Answer-1. Correct alternative is 'c': One determinant of the long term common unemployment price is the minimum wage, at the same time as the inflation prices relies upon more often than not upon the cash deliver increase price.
The required details for Inflation rate in given paragraph
Inflation is a upward thrust in charges, which may be translated because the decline of buying electricity over time. The price at which buying electricity drops may be pondered within side the common charge boom of a basket of decided on goods and offerings over a few length of time. The upward thrust in charges, that's frequently expressed as a percentage, way that a unit of foreign money successfully buys much less than it did in previous periods. Inflation may be contrasted with deflation, which happens while charges decline and buying electricity increases.
Inflation pursuits to degree the general effect of charge modifications for a diverse set of merchandise and offerings. It permits for a unmarried cost illustration of the boom within side the charge level of products and offerings in an financial system over a length of time.
To know about Inflation rate click here
https://brainly.com/question/777738
#SPJ4
which of the following is typically true during the decline stage of the product life cycle? advertising expenses increase. spending on all elements of the promotion mix is reduced. personal selling costs are increased. sales promotion efforts are increased. public relations efforts are the promotional focus.
Advertising expenses increase is typically true during the decline stage of the product life cycle.
As soon as a product or industry has entered decline, the focal point shifts nearly absolutely to minimizing fees. Advertising and marketing spend is reduced for merchandise on this existence level, due to the fact the marketing investment is better spent on different priorities.
The introduction phase is the first time clients are delivered to the brand new product. An employer have to normally consists of a sizeable funding in advertising and a advertising campaign targeted on making purchasers aware of the product and its blessings, specially if it extensively unknown what the coolest will do.
Learn more about Advertising here: https://brainly.com/question/14227079
#SPJ4
Jacob bought 5. 5 pounds of jelly beans for $14. 74. How much would 7. 25 pounds of jelly beans cost, to the nearest cent?.
answer $19.43
explaination: 5.5 pounds of jelly beans= $14.74
1 pound of jelly beans= 14.74÷5.5 =2.68
7.25 pounds of jelly beans= 2.68×7.25=$19.43
$19.43 pounds of jelly beans cost, to the nearest cent Look at the ONE-CENTS digit, which is rounded to the nearest ten cents (the last digit). As always, round up or down. Look at the ten-cent digit to the closest dollar (a tenth of a dollar).
What is the cost?A cost is the amount of money that has been spent to produce something or provide a service and is thus no longer accessible for use. In business, the cost could be one of acquisition, in which case the money spent to obtain it is recognized as cost. In this situation, money is the input that is used to purchase the item.
$14.74 x 5.5 pounds of jelly beans cost
Jelly Beans: 1 Pound = 14.74 x 5.5 = 2.68
2.68 times 7.25 pounds of jelly beans equals $19.43.
The quarter is the 25-cent coin used in the US. The obverse (heads) of the quarter features George Washington, who served as our nation's first president. Since 1932, the 200th anniversary of his birth, he has been featured in the quarter. Washington's right-facing portrait was created in 2022.
Therefore, $19.43 pounds of jelly beans cost, to the nearest cent Look at the ONE-CENTS digit,
Learn more about cost here:
https://brainly.com/question/15135554
#SPJ2
if an increase in the price of gaming consoles causes demand for video games to decrease, what type of goods are video games and gaming consoles?
Complementary goods are video games and gaming consoles.
What is Complementary goods?
Purchases of complementary commodities, such as fish & chips, tennis rackets, and tennis balls, are made in pairs. Desire for the other good will rise in tandem with the demand for the first good. There will be an increase in demand for PS4 games as the console's popularity grows.Are televisions and game consoles categorized as computers?
gaming systems A game console is a specific kind of computer used for watching TV while playing video games. TVs: Nowadays, a lot of TVs come with software—or apps—that enable you to access numerous forms of online material. As an illustration, you could instantly stream video to your TV from the Internet.Learn more about Complementary goods
brainly.com/question/1338465
#SPJ4
suppose the prices of petroleum products, including gasoline and fuel oil, fell sharply. which of the following would most likely occur as the result of the lower prices of petroleum products?
The result of the lower prices of petroleum products is reduction in demand for home insulation products.
Lower oil prices result in lower company expenses, which can boost profitability by lowering transportation costs and business expenditures. With the price of oil declining, inflation is being lowered. Economic growth may be boosted by the interaction of reduced prices, more purchasing power, and lower operating expenses.
The cost of oil directly affects how much it costs to make and recycle plastic. Oil is one of the ingredients that goes into making plastic. Accordingly, the price of producing plastic similarly lowers as the price of a barrel of oil does.
To know more about Lower Oil Prices here
https://brainly.com/question/14557796
#SPJ4
The use of ______ media when generating publicity allows a marketing manager a great deal of versatility with the messaging content.
The use of owned media when generating publicity allows a marketing manager a great deal of versatility with the messaging content.
What does "owned media" entail?
The set of communication channels and outlets over which an organization or individual has complete control is referred to as owned media. Websites, blogs, email newsletters, forums, and other similar properties are included.
The content is entirely within your creative control. You can focus on your informing explicitly to your favored market. You can use the channels for free. You can establish connections with your clients.
Give me five examples of media.
Print media (books, magazines, newspapers), television, movies, video games, music, cell phones, a variety of software, and the Internet are all examples of modern media formats. Content and a device or object that delivers that content are both components of each type of media.
To learn more about owned media here
https://brainly.com/question/14047162
#SPJ4
Full Question = The use of ______ media when generating publicity allows a marketing manager a great deal of versatility with the messaging content.
a. owned
b. paid
c. earned
the individual responsible for understanding the advertiser's marketing and promotion needs and interpreting them to agency personnel, serving as the link between the ad agency and its clients, is the group of answer choices marketing executive account executive advertising executive agency executive
The account executive is responsible for understanding the advertiser's marketing and promotion needs and interpreting them to agency personnel, serving as the link between the ad agency and its clients.
What is an Account Executive?
An employee who is primarily in charge of maintaining a business relationship with a client is known as an account executive.
Account executives are most frequently found in the financial services, public relations, and advertising industries. Additionally, technology firms that offer assistance for hardware and software give important clients account executives.
The main point of contact between a vendor and a customer is an account executive. Typically, the account executive is involved from the very beginning of the company relationship. They are in charge of carrying out the terms of the contract and maintaining the client's satisfaction after presenting the business and negotiating the contract.
To know more about contract refer:
https://brainly.com/question/2669219
#SPJ4
According to the price equation, to find the actual price, you should do which two things to the list price?.
According to the price equation, to find the actual price, you should do which two things to the list price add extra fees and subtract incentives and allowances
The margin between an item's cost and its selling price is known as the pricing margin or profit margin. Therefore, the goal of the majority of businesses is to maximize profits while maintaining competitive prices. There is no denying the critical importance of pricing.
Cost-based pricing, competitive pricing, and pricing based on customer value are the three main pricing strategies. Let's simply review each. With cost-based pricing, a business figures out its total cost to build, distribute, market, and support the product.
Read more about actual price at
https://brainly.com/question/24233268
#SPJ4
if the company uses a project cost of capital of 14%, what will be the expected net present value (npv) of this project? -$7,614 -$7,214 -$9,618 -$8,015
If the company uses a project cost of capital of 14%, the expected net present value(NPV) of this project is -$7214.
What is net present value?A series of cash flows that happen at various dates are subject to the net present value (NPV) or net present worth (NPW). The amount of time until a cash flow is expected determines its present value. The discount rate also plays a role. It offers a tool for assessing and contrasting capital projects or financial products with cash flows distributed over time, such as loans, investments, insurance contract payouts, and many more applications. According to the time value of money, the value of cash flows changes with time. Based on a determined rate of return, this decrease in the current value of future cash flows has been made (or discount rate).
To learn more about net present value, visit:
https://brainly.com/question/28174656
#SPJ4
oscar is a kitchen and bathroom design and construction specialist. considering his business in the context of operations, the tools, and raw materials he uses would best be classified as
Oscar is a kitchen and bathroom design and construction specialist. considering his business in the context of operations, the tools, and raw materials he uses would best be classified as inputs.
What are inputs in business operations?Inputs (labor, capital, equipment, land, buildings, materials, and information) are transformed into outputs (goods and services) that generate value for customers via operations management. To satisfy consumer needs, all firms must work to improve the quality of their transformation processes.
All materials used to produce goods and services are considered inputs. Workers' time, fuel, materials, buildings, and equipment are a few examples of
The term "inputs" refers to all of the resources that a company employs during the production process, including manpower, raw materials, components, machinery, and other tools. Outputs include finished tangible things like furniture, clothing, or automobiles as well as intangible services like healthcare, business consultancy, and education.
Read more on inputs and outputs here: https://brainly.com/question/14352771
#SPJ1
suppose output exceeds potential output and contractionary fiscal policy is enacted. according to the as/ad model, in the long run, this fiscal policy will produce: multiple choice a lower output level and a lower price level than would have occurred if no action were taken. a lower price level than would otherwise have occurred if no action were taken. a lower output level than would otherwise have occurred if no action were taken. neither a lower price level nor a lower output level than would otherwise have occurred if no action were taken.
According to preferred measurements of gross domestic product (GDP), contractionary fiscal policy apparently reduces total output.
Taxes have a tendency to minimize personal consumption simply as spending cuts limit authorities consumption.
Why does contractionary fiscal policy make bigger activity rates?Contractionary economic policy motives interest charges to expand in the feel that the coverage makes little dollars accessible as loans in the economy. Basically, due to the fact that the coverage controls the furnish of money, it will have an effect on the dollars on hand for banks to mortgage out.
Examples of this contractionary fiscal policy include increasing taxes and lowering government spending.
Learn more about contractionary fiscal policy here:
https://brainly.com/question/1416825#SPJ4you are purchasing software that 20 people in your company will need to use on their home desktops. which of these will you need?
You are purchasing software that 20 people in your company will need to use on their home desktops. you need a group license.
Software is a set of computer programs and associated documentation and statistics.[1] this is in comparison to hardware, from which the gadget is built and which absolutely performs the paintings. At the lowest programming level, executable code consists of device language instructions supported with the aid of an individual processor—generally a central processing unit (CPU) or a pics processing unit (GPU). A machine language consists of organizations of binary values signifying processor commands that exchange the nation of the computer from its preceding kingdom. For instance, a preparation might also alternate the fee stored in a specific storage location inside the pc—an impact that is not directly observable to the consumer.
Learn more about software here
https://brainly.com/question/28224061
#SPJ4
United pigpen is considering a proposal to manufacture high-protein hog feed. The project would require use of an existing warehouse, which is currently rented out to a neighboring firm. The next year’s rental charge on the warehouse is $100,000, and thereafter, the rent is expected to grow in line with inflation at 4% a year. In addition to using the warehouse, the proposal envisages an investment in plant and equipment of $1. 2 million. This could be depreciated for tax purposes straight-line over 10 years. However, pigpen expects to terminate the project at the end of 8 years and to resell the plant and equipment in year 8 for $400,000. Finally, the project requires an immediate investment in working capital of $350,000. Thereafter, working capital is forecasted to be 10% of sales in each of years 1 through 7. Working capital will be run down to zero in year 8 when the project shuts down. Year 1 sales of hog feed are expected to be $4. 2 million, and thereafter, sales are forecasted to grow by 5% a year, slightly faster than the inflation rate. Manufacturing costs are expected to be 90% of sales, and profits are subject to tax at 25%. The cost of capital is 12%. What is the npv of pigpen’s project?.
The income from the project more than compensates for the loss of rental income whose present value is only $698,888.27.
To ascertain the NPV we have to calculate the net cashflows generated by the project till year 8 and then discount it to the current period. Based on the data given in the problem, the details will be as follows:
Initial investment = $1,350,000
Depreciation per year = 1,350,000/10 = $375,000
Depreciation per year is to be calculated on a straight-line basis based on 10-year life though the project is closed in year 8
To arrive at the yearly cash flows, the working capital added during the year is deducted from the cash from operations. The point to be noticed here is that it is mentioned that working capital is 10% of the sales of the year. $375,000 has already been infused initially. Hence only the additional amount over and above the previous year(s) has to be considered for deduction to arrive at the yearly cashflows.
NPV = $2,435,614.89 - $1,350,000
= $1,085,614.89
Profit on sale of equipment = sale value - Book value ie., cost of the machine less depreciation till year 8
= 450,000 - (1,350,000 - (135000 * 8))
=$270,000
It can be observed that the income from the project more than compensates for the loss of rental income whose present value is only $698,888.27
To learn more about the project please click on the given link: https://brainly.com/question/28476409
#SPJ4
The federal housing administration is a new deal agency that continues to assist many americans primarily by.
The federal housing administration is a new deal agency that continues to help many Americans, primarily by assisting them in obtaining bank mortgage loans.
What is federal housing administration (FHA) ?The Federal Housing Administration (FHA) is a United States government agency that provides mortgage insurance to FHA-approved lenders. The Federal Housing Administration (FHA) was established by the United States government in 1934 and became a part of the United States Department of Housing and Urban Development (HUD) in 1965.The FHA's operations are supported by income generated by mortgage insurance premiums (MIPs). FHA loans have lower down payment requirements and credit requirements than traditional lenders. This allows thousands of Americans who would otherwise be unable to obtain a mortgage to become homeowners. Mortgage insurance protects lenders from losses due to mortgage defaults, so if a borrower defaults, the FHA pays the lender.
To learn more about FHA refer :
https://brainly.com/question/14365664
#SPJ4
