As CFO of a small manufacturing firm, you have been asked to determine the best financing for the purchase of a new piece of equipment. The vendor is offering repayment options of $10,000 at the end of each year for five years, or no payment for two years followed by one payment of $42,000 at the end of two years. The current market rate of interest is 8%. Calculate present value of both options. (For calculation purposes, use 5 decimal places as displayed in the factor table provided. Round final answers to 2 decimal places, e.g. 5,275.25.) Click here to view the factor table PRESENT VALUE OF 1. Click here to view the factor table PRESENT VALUE OF AN ANNUITY OF 1. Present Value Option 1 $ Option 2 $ Which option would you recommend?
Answers
Option 1 is the best financing choice for a new piece of equipment because it has a lower present value of $8,235.05 compared to option 2, which has a higher present value of $34,381.88.
As CFO of a small manufacturing firm, you are asked to determine the best financing for the purchase of a new piece of equipment. The vendor is offering repayment options of $10,000 at the end of each year for five years, or no payment for two years followed by one payment of $42,000 at the end of two years. The current market rate of interest is 8%.
Present Value Option 1 $8,235.05Present Value Option 2 $34,381.88Option 1 is the best financing choice for a new piece of equipment. Present Value of an Ordinary Annuity of $1 n=5, i=8% is 3.99271 and the Present Value of a Lump Sum of $1, n=5, i=8% is 0.68058.For option 1, calculate the present value of an ordinary annuity with five periods, an interest rate of 8%, and a payment of $10,000 at the end of each period: Present Value of Ordinary Annuity (Option 1) = PMT × Present Value Factor Present Value Factor = Present Value of an Ordinary Annuity of $1 for 5 years at 8% .
Present Value Factor = 3.99271 PV Option 1 = $10,000 × 3.99271PV Option 1 = $39,927.10Calculate the present value of option 2 using the present value formula: PV Option 2 = Payment ÷ (1 + i)ⁿ + Payment ÷ (1 + i)ⁿ⁺¹ + Payment ÷ (1 + i)ⁿ⁺² + Payment ÷ (1 + i)ⁿ⁺³ + Payment ÷ (1 + i)ⁿ⁺⁴PV
Option 2 = $42,000 ÷ (1 + 0.08)² + $0 ÷ (1 + 0.08)³ + $0 ÷ (1 + 0.08)⁴ + $0 ÷ (1 + 0.08)⁵ + $0 ÷ (1 + 0.08)⁶PV Option 2 = $34,381.88 Option 1 is the best financing choice for a new piece of equipment because it has a lower present value of $8,235.05 compared to option 2, which has a higher present value of $34,381.88.
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Related Questions
The fact that there are now more single people going on vacation is a behavioral trend observed in the hospitality and tourism industry.
true or false
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Answer:
true
Explanation:
when looking at the contributions of people over 55, it is equivalent to how many full-time workers?
Answers
Under the Investment Advisers Act of 1940, cash payment to a broker-dealer from an investment adviser in return for client referrals is A) not permitted under any circumstances B) permitted with no restrictions C) permitted if the investment adviser makes certain disclosures to the clients and meets other requirements D) permitted if the investment adviser and broker-dealer are affiliated
Answers
Answer:
It's A.
Explanation:
Question 45
_______ are especially useful for relationship marketing.
o Apps
o Podcasts
o Social networking sites
o Media networks
o Wikis
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Answer:social networking sites
Explanation:
theg3eu3guyrgufgrgifrggiygiyrgirgigv
Answers
Answer:
I xixed3odn3dno3xnomxend4ond4imx74d diendeinxe said einxiw dueoxni3d 3id 2did 2iz
why are hedge funds considered a high risk of investment
Answers
Answer: the huge potential for money loss.
Explanation: hedge funds are considered to be high-risk investments because of the huge potential for money loss. Again, these funds are primarily controlled by hedge funds managers, and with pools of money going into investments, there is likely going to be some loss.
Explain the tradeoffs involved in setting an ideal level of inventory for a
particular product. What are the costs if too much is maintained? What are
the costs if too little is maintained?
Answers
The more inventory a company holds, the more space is needed, and space costs money
Too little? Less money and less product being sold.
The ex-dividend date is defined as __day(s) before the date of record.
Select one:
a. three business
b. three
c. two business
d. two
e. one
Answers
The ex-dividend date is defined as two day(s) before the date of record.
What is the ex-dividend date?Which stockholders are entitled to receive declared dividends is determined by a financial phrase known as the ex-dividend date. The board of directors establishes a record date before a corporation declares a dividend.
The dividends are only payable to stockholders listed on the company's books as of that date. The ex-dividend date is established according to the regulations of a stock exchange and is often chosen one or two days prior to the record date.
Therefore, option D is correct.
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Based on the discounted payback rule, an investment is acceptable if its discounted payback is less than some prespecified number of years.
a. True
b. False
Answers
(a) true
Based on the discounted payback rule, an investment is acceptable if its discounted payback is less than some prespecified number of years.
Payback period rule: Based on the rule of payback investment is having a period of less than specified number of years. Time value of money is ignored and risk differences are been considered.
Payback period is always lower than discount period. It takes longer before the original investment recovers. Shorter payback gets attractive investments while longer paybacks are less desirable. Done with the investment by the annual cash flow to go through any investment.
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for human services pleaseeeeeeeeeeee help <3
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Answer:
gghddhshdjshsjgsgsgshsnssmada pharmaceutical company is using sales call reports from previous years in order to develop personal selling ideas for its current team. the company is using
Answers
The type of data used by the pharmaceutical company to develop new personal selling ideas is called internal secondary data.
The information compiled or gathered which is used in other generate new pattern or insight aimed at solving a problem is called data. Since, these data was obtained form within the firms database, then it is called an internal data. Since the data was gathered from previous year's data, then it is called internal secondary data.Therefore, since the data was not just generated within the firm but from previously used internal data, the it is called internal secondary data.
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Suppose that any number of identical boats can fish along the North Carolina coast. The value of fishing (V) per boat as a function of the number of boats (N) is defined as V = 10 - 2N. The marginal value (MV) to the fishery of an additional boat is defined as MV = 10 - 4N. For each boat, the costs of fishing (C) are $2. What is the socially efficient number of boats in the fishery?
Answers
The socially efficient number of boats in the fishery can be determined by equating the marginal value (MV) to the costs of fishing (C).
MV = C
10 - 4N = 2
Simplifying the equation, we have:
4N = 8
N = 2
Therefore, the socially efficient number of boats in the fishery is 2. This means that to achieve social efficiency, there should be two boats fishing along the North Carolina coast. At this number of boats, the marginal value to the fishery (MV) is equal to the costs of fishing (C), ensuring that the benefits derived from fishing are maximized and costs are minimized for society as a whole.
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What is an origination fee on a loan?
Answers
Answer & Explanation: An origination fee is a payment associated with the establishment of an account with a bank, broker or other company providing services handling the processing associated with taking out a loan.
what are the three most common ways to categorize or classify magazines?
Answers
Magazines can be categorized or classified in various ways depending on the criteria used. However, three common ways to classify magazines are:
Subject or Topic: Magazines can be categorized based on the subject matter they cover. This classification can include broad categories such as fashion, sports, lifestyle, business, health, entertainment, technology, travel, and many others. It helps readers find magazines that align with their specific interests.
Target Audience: Magazines can also be classified based on their target audience or demographic. This classification considers factors such as age, gender, occupation, hobbies, and interests. Examples include magazines for women, men, teenagers, parents, professionals, hobbyists, and specific demographic groups.
Frequency of Publication: Magazines can be classified based on how frequently they are published. This classification typically includes categories such as monthly, bi-monthly, quarterly, or weekly publications. It helps readers know the regularity with which they can expect new content from a particular magazine.
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What is the best way to respond to a customer complaint? A. Listen to the customer, B. Overcompensate C. Ignore the customer. D. Respond aggressively.
Answers
Answer:
a
Explanation:
u should never let the customer know that they are wrong
The best way to respond to a customer complaint is listen to the customer. It comes under the consumer protection management. The correct option is (A).
What do you mean by Customer Complain?Customer complaints relate to when a firm does not deliver on its commitment and does not satisfy customer expectations in terms of the product or services. Every business's customers are its most important component.
Customer complaints provide your team the chance to engage in open dialogue with your clients.
These exchanges might make your clients feel like they are essential to your success.
Customer complaints give you important information about how well-trained your front-line staff is and how to make improvements.
Therefore, the best way to respond to a customer complaint is listen to the customer. It comes under the consumer protection management.
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A simple machine has efficiency 90%.What does it mean?No machine has 100%efficiency,Why?
Answers
Answer with explanation:
1) it means tht the machine can do it's work in a 90% in a good way
2) no machine is free from the effects of gravity, and even with wonderful lubrication the energy a machine produces is always less than the work put into it that's why 100% efficency isnt possible in machines.
Best of luck!!!
The Shirt Works sells a large variety of tee shirts and sweatshirts. Steve Hooper, the owner, is thinking of expanding his sales by hiring high school students, on a commission basis, to sell sweatshirts bearing the name and mascot of the local high school.
These sweatshirts would have to be ordered from the manufacturer six weeks in advance, and they could not be returned because of the unique printing required. The sweatshirts would cost Hooper $16.00 each with a minimum order of 203 sweatshirts. Any additional sweatshirts would have to be ordered in increments of 203.
Since Hooper’s plan would not require any additional facilities, the only costs associated with the project would be the costs of the sweatshirts and the costs of the sales commissions. The selling price of the sweatshirts would be $32.00 each. Hooper would pay the students a commission of $7.00 for each shirt sold.
Required:
1. What level of unit sales and dollar sales is needed to attain a target profit of $7,308?
2. Assume that Hooper places an initial order for 203 sweatshirts. What is his break-even point in unit sales and dollar sales? (Round your intermediate calculations, round "Break-even point in unit sales" up to the nearest whole unit and round "Break-even point in dollar sales" to the nearest whole dollar.)
3. How many sweatshirts would Hooper need to sell to earn a target profit of $8,222? (Round final answer up to the nearest whole unit.)
Answers
1. The unit and dollar sales levels needed to attain a target profit of $7,308 are 812 and $25,984.
2. The break-even point with 203 sweatshirts is $4,669.
3. The unit sales level needed to attain a target profit of $8,222 is 914.
What is the break-even point?The break-even point represents the required sales units for no profit or loss to be achieved.
At the break-even point, the total revenue equals the total costs (fixed and variable).
Data and Calculations:Selling price per sweatshirt = $32
Variable cost per unit = $23 ($7 + $16)
Contribution margin per unit = $9 ($32 - $23)
Contribution margin ratio = 0.28125 ($9/$32)
Fixed costs = $0
Target profit = $7,308
1. Sales level to attain a target profit of $7,308 = 812 units ($7,308/$9)
And $25,984 ($7,308/0.28125)
2. Break-even point with 203 sweatshirts = $4,669 ($23 x 203)
3. Target profit = $8,222
Sales level to attain a target profit of $8,222 = 914 units ($8,222/$9)
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farthington soccer supplies purchases merchandise from a supplier on credit, terms 2/10, n/30 for $15,300. assume the company uses a perpetual inventory system, and records purchases using the gross method. when recording the purchase transaction in its purchases journal, farthington would enter:
Answers
In the purchases journal, Farthington would enter the following information for the purchase transaction:
Date: [date of purchase], Account Credited: Inventory, Supplier's Name: [name of supplier], Invoice Number: [invoice number], Terms: 2/10, n/30, Amount: $15,300
Since Farthington uses the perpetual inventory system and records purchases using the gross method, the full amount of $15,300 would be recorded as the purchase price in the inventory account. However, if Farthington takes advantage of the 2% discount by paying within 10 days, a debit of $306 (2% of $15,300) would be recorded in the accounts payable account and a credit of $306 would be recorded in the inventory account to reflect the reduced cost of the merchandise.
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Driving forces analysis Multiple Choice involves identifying the driving forces, assessing whether their impact will make the industry more or less attractive, and determining what strategy changes a company may need to make to prepare for the impact of the driving forces. identifies which strategic group is the most powerful. helps managers identify which industry member is likely to become (or remain) the industry leader and why. helps managers identify which key success factors are most likely to help their company gain a competitive advantage. helps managers identify which of the five competitive forces will be the strongest driver of industry change.
Answers
Answer:
involves identifying the driving forces, assessing whether their impact will make the industry more or less attractive, and determining what strategy changes a company may need to make to prepare for the impact of the driving forces.
Explanation:
Business strategy sets the overall direction for the business because it focuses on defining how a business would achieve its goals, objectives, and mission; as well as the funds and material resources required to implement or execute the business plan.
Driving forces analysis involves identifying the driving forces, assessing whether their impact will make the industry more or less attractive, and determining what strategy changes a company may need to make to prepare for the impact of the driving forces. This driving forces determines the competitive and comparative advantage of a company.
Comparative advantage in economics is the ability of an individual or country to produce a specific good or service at a lower opportunity cost better than another individual or country.
The comparative advantage gives a country a stronger sales margin than their competitors as they are able to sell their specific products or render their peculiar services at a lower opportunity cost.
What is the homogeneous-good duopoly cournot equilibrium if the market demand function is qp, and each firm's marginal cost is $ per unit?
Answers
In conclusion, to find the homogeneous-good duopoly Cournot equilibrium with a market demand function of Qp and marginal cost of $C per unit, we need to determine the equilibrium quantity by equating the total quantity produced by the two firms to the market demand. Then, substitute the equilibrium quantity into the market demand function to find the equilibrium price. Finally, calculate the firms' profits using the equilibrium price, quantity produced, and total cost per firm.
The Cournot equilibrium in a homogeneous-good duopoly occurs when two firms compete in the market by simultaneously deciding how much quantity to produce. In this scenario, the market demand function is represented as Qp, where p represents price and Q represents quantity.
To determine the Cournot equilibrium, we need to consider each firm's marginal cost, which is the cost to produce one additional unit of output. Let's assume the marginal cost for each firm is $C per unit.
In the Cournot model, each firm assumes that its competitor's output will remain constant when deciding its own output. Firm 1 chooses a quantity q1 to maximize its profits, taking into account the market demand function and its marginal cost. Similarly, Firm 2 chooses a quantity q2.
To find the Cournot equilibrium, we need to equate the total quantity produced by the two firms (q1 + q2) to the market demand Qp. This will give us the equilibrium quantity.
To determine the equilibrium price, we substitute the equilibrium quantity into the market demand function Qp and solve for p.
Finally, we can calculate the firms' profits by multiplying the equilibrium price by the quantity each firm produces and subtracting the total cost (C * quantity) for each firm.
In conclusion, to find the homogeneous-good duopoly Cournot equilibrium with a market demand function of Qp and marginal cost of $C per unit, we need to determine the equilibrium quantity by equating the total quantity produced by the two firms to the market demand. Then, substitute the equilibrium quantity into the market demand function to find the equilibrium price. Finally, calculate the firms' profits using the equilibrium price, quantity produced, and total cost per firm.
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When an organization evaluates people based on the economic or productive potential of their knowledge, experience, and actions, the organization is viewing them as ______.
Answers
When an organization evaluates people based on the economic or productive potential of their knowledge, experience, and actions, the organization is viewing them as human capital.
What is human capital organization?Human capital is referred to as an intangible asset for any firm but is absent from the balance sheet of a corporation. Human capital, which includes an employee's education, health, intelligence, punctuality, values, ethics, corporate citizenship, and loyalty, is the economic value of their knowledge, abilities, and experience.
Thus, it is human capital.
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Zane works out in the ocean installing huge wind turbines to provide the coastal communities with clean energy. The Energy cluster pathway that Zane works in is _____.
Answers
Answer: energy and power technology.
Explanation: trust me i took the quiz
Zane works out in the ocean installing huge wind turbines to provide the coastal communities with clean energy. The Energy cluster pathway that Zane works in is energy and power technology.
What is energy?The phrase energy means the ability to accomplish work, which is the ability to apply a force that causes an item to move. Potential energy and kinetic energy are the two forms of energy. Each form can be converted or altered to another. Energy is what causes things to alter and move.
Zane is employed by the Energy cluster program, which trains students for employment in energy planning, generation, planning, maintenance, and distribution. Students are prepared for employment in the energy sector, especially those involving renewable energy sources like wind turbines, through the Energy Career Cluster.
As a result, the significance of the Energy cluster pathway that Zane works are the aforementioned.
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State any five occupation in public sector? Explain any one of them.
Answers
Explanation:
social worker
physiotherapist
welfare right officers
drug abuse worker
care worker
physiotherapist: It is a health related profession that deals with the treatment of the dysfunctional human organs through therapy. +2 level or certificate level in science with minimum 50% is required to do this particular job.
Laurel contributed equipment worth $200,000, purchased 10 months ago for $250,000 cash and used in her sole proprietorship, to Sand Creek LLC in exchange for a 15 percent profits and capital interest in the LLC. Laurel agreed to guarantee all $15,000 of Sand Creek’s accounts payable, but she did not guarantee any portion of the $100,000 nonrecourse mortgage securing Sand Creek’s office building. Other than the accounts payable and mortgage, Sand Creek does not owe any debts to other creditors.a. What is Laurel’s initial tax basis in her LLC interest?
b. Laurel’s holding period in the partnership interest begins the day the LLC interest is acquired. True or False?c. What is Sand Creek’s initial basis in the contributed property?
d. What is Sand Creek’s holding period in the contributed property?
Answers
Answer: See explanation
Explanation:
a. What is Laurel’s initial tax basis in her LLC interest?
This will be the addition of the $250,000 basis for the equipment, accounts payable of $15,000 and also the $15,000 (15% × $100,000). This will be:
= $250,000 + $15,000 + $15,000
= $280,000
b. True.
Laurel’s holding period in the partnership interest begins the day the LLC interest is acquired. This is due to the fact that the asset contributed isn't a section 1232 asset. The reason for this is due to the fact that the asset was used for a year or less.
c. Sand Creek’s initial basis in the contributed property is $250,000.
d. Ten months.
Sand Creek’s holding period in the contributed property will be 10 months.
The three elements of the marketing concept are __________.
a. Market share, customer needs, marketing mix
b. Customer needs, company goals, profits
c. Channel management, customer needs, profits
d. Planning, target market, social media marketing
Answers
Answer:
B. Customer needs, company goals, profits
Explanation:
Jamara has started a home party business that hosts parties and those attending paint signs. Jamara must pay $500 a year to be a representative for Paint A Sign. In addition, Jamara buys all the materials for the parties, including the metal base, the paints, brushes, stencils, and transfers. Currently, these items all add up to $10 on average. Jamara charges each participant $25 for each sign they make. For Jamara's Paint A Sign business, the $500 is a fixed cost per year. Which of the following is true?
Answers:
a. Jamara will pay the Paint A Sign company $500 regardless of the number of parties she hosts.
b. Jamara will lose money if she has less than 100 participants a year.
c. Jamara's annual fixed costs will be higher than her variable costs regardless of the number of participants.
d. Jamara will have to pay Paint A Sign $500 for every party she hosts.
Answers
Answer:
The correct answer is A. Jamara will pay the Paint A Sign company $500 regardless of the number of parties she hosts.
Explanation:
Since Jamara has started a home party business that hosts parties and those attending paint signs, and she must pay $ 500 a year to be a representative for Paint A Sign, and in addition, Jamara buys all the materials for the parties, including the metal base, the paints, brushes, stencils, and transfers, and currently, these items all add up to $ 10 on average, and Jamara charges each participant $ 25 for each sign they make, and for Jamara's Paint A Sign business, the $ 500 is a fixed cost per year, to determine which of the options is true, the following calculations must be performed:
500 = fixed costs
(100 x 25) - 10 x 100 - 500
2500 - 1000 - 500 = 1000
Therefore, since $ 500 is annual fixed costs regardless of the number of parties that are held, Option A is correct.
What are the additional costs you pay each year in order to borrow money in loans? This includes both interest and fees.
A: Annual Percentage rate (ARP)
B: Variable Interest
C: Origination Fees
d: Fixed interest
Answers
The annual percentage rate is the additional cost that you pay monthly in order to borrow money in loans.
What is the annual percentage rate?This rate is also expressed as the interest rate. It is the amount that one is charged for the money that they borrowed.
This amount is the actual cost of the loan that they got which is expressed in percentages.
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What is an example of form utility
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20. Analyzing market research is usually done by identifying________ making comparisons and developing________
Answers
Answer:
Define your research objective. The first step in the market research process
Explanation:
is to define your research objectives. ...
Develop your research questions. ...
Gather your research. ...
Interpret your findings. ...
Draw conclusions and make decisions.
Which of the following describes what is identified by a supply schedule?
a How much suppliers will profit at various prices
b How much consumers will save at various supply levels
c How much suppliers will raise prices as production varies
d How much of a product suppliers will produce at various prices
Answers
What is identified in a supply schedule is how much of a product suppliers will produce at various prices (option D).
What is a supply schedule?A supply schedule is a table that shows the price and quantity supplied of suppliers. It shows the total number of goods that would be supplied at various prices.
There is a positive relationship between price and the quantity supplied. This is because as price increases, there would be an increase in the quantity supplied. When price declines, there would be a decrease in the quantity supplied. This explains why the supply curve is positively sloped.
The supply schedule can be an individual schedule or a market schedule. When its an individual schedule, it contains information on only one supplier. If it is a market schedule, it aggregates the information of all the suppliers in the market.
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