An investment project that costs $12,350 provides cash flows of $12,300 in year 1; $19,560 in year 2; -$8,820 in year 3; -$5,380 in year 4, and $8,230 in year 5 . What is the NPV of the project if the cost of capital is 8.4%? (Hint: note that negative sign in the cash flows for year 3 4, means they are cash 'outflow'.

Answers

Answer 1

The NPV of the project, given a cost of capital of 8.4%, is approximately -$345.98.

To calculate the NPV, we discount each cash flow back to its present value using the cost of capital (8.4%) and then sum them up. The formula for NPV is:

NPV = CF1 / (1+r)¹ + CF2 / (1+r)² + CF3 / (1+r)³ + CF4 / (1+r)⁴ + CF5 / (1+r)⁵

Where CF1 to CF5 represent the cash flows in each year and r is the cost of capital.

Using the given cash flows, we have:

NPV = 12,300 / (1+0.084)¹ + 19,560 / (1+0.084)² + (-8,820) / (1+0.084)³ + (-5,380) / (1+0.084)⁴ + 8,230 / (1+0.084)⁵

Simplifying the equation, we find:

NPV = 12,300 / 1.084 + 19,560 / (1.084)² + (-8,820) / (1.084)³ + (-5,380) / (1.084)⁴ + 8,230 / (1.084)⁵

Calculating each term and summing them up gives us an NPV of approximately -$345.98. The negative NPV indicates that the project is not expected to generate enough returns to cover the cost of capital, making it potentially unfavorable.

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Related Questions

at what level are material requirements planning (mrp) and work scheduling data defined?

Answers

Material Requirements Planning (MRP) and work scheduling data are defined at the individual item level within a manufacturing or production operation.

Material Requirements Planning (MRP) is a computer-based inventory management system that uses data from production planning, inventory control, and purchasing to calculate the materials needed for production. It is used to plan and schedule the production of finished goods based on demand forecasts and other factors such as lead times, order quantities, and inventory levels.

Work scheduling data, on the other hand, refers to the specific details of the manufacturing process, such as the time and duration of each operation, the equipment and resources required, and the sequence of operations. This data is used to develop the production schedule, which determines when each operation will take place and how long it will take to complete.

Both MRP and work scheduling data are defined at the individual item level within the manufacturing or production operation. This allows for precise control and optimization of the production process, ensuring that materials and resources are used efficiently and that production schedules are met on time and on budget.

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Use the following information to answer questions 10 and 11 below. Market for flat-screen TVs: Demand: Qd= 2,600 – 5P Supply: Qs= –1,000 + 10P 10. If a price ceiling is set at $200, this will create a a. shortage of 600 b. shortage of 1,400 c. surplus of 800 d. surplus of 1,600 11. What would be the quantity traded if a price floor is set at $100? a. 240 b. 1,400 c. 2,100 d. 700

Answers

If a price ceiling is set at $200, this will create a shortage of 600 flat-screen T.Vs. Thus, option A is the correct option.

We must make a supply and demand equation in order to determine the equilibrium price and quantity:

2,600 – 5P = –1,000 + 10P

3,600 = 15P P = $240

Therefore, $240 is the equilibrium price. We can re-insert this price into the supply or demand equation to determine the equilibrium quantity:

Qd = 2,600 – 5($240) = 1,000 Qs = –1,000 + 10($240) = 1,000

1,000 flat-screen TVs are the equilibrium number.

If the price cap is $200, it is less than the equilibrium price. While consumers will want to purchase more flat-screen TVs than the suppliers are prepared to offer, suppliers won't be able to or won't want to make as many of them at this reduced price. Flat-screen TVs are in short supply as a result.

We may deduct the quantity sought at the price ceiling ($200) from the quantity provided at that price to get the size of the shortage:

Qs = –1,000 + 10($200) = $1,000

Qd = 2,600 – 5($200) = $1,600

Shortage = Qd – Qs = $1,600 – $1,000 = $600

So the shortage is 600 flat-screen TVs.

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Define a Small Scale Enterprise as per ‘MSMED Act, 2006’.

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Explanation:

the Government of India has in acted, small and medium enterprises development (MSMED) Act, 2006 in terms of which the definition of micro, small and medium enterprises is an enterprise where the investment in plant and machinery is more than rate 25 lakh but does not exceed rate.

Design Corporation has 400,000 shares of $10 par-value common stock issued and outstanding when the market price per share is $25 per share. By what amount will total equity increase when the company declares a 2:1 stock split

Answers

The declaration of a 2:1 stock split does not affect the total equity and so it will remain at $4,000,000 (800,000 x $5).

What is a 2:1 stock split?

A 2:1 stock split increases the number of shares outstanding by 2 times while the par value reduces by 2 times.

The net effect of a stock split is that the number of shares outstanding increases just as the par value and market value of the shares decrease.

Data and Calculations:

Common stock issued and outstanding = 400,000 shares

Par value of shares = $10 per share

Total equity = $4,000,000 (400,000 x $10)

A declaration of a 2:1 stock split increases the number of common stock outstanding from 400,000 shares to 800,000 shares (400,00 x 2).

The market price will reduce to $12.50 ($25/2) and the par value will reduce to $5 ($10/2).

Thus, the declaration of a 2:1 stock split does not affect the total equity and so it will remain at $4,000,000 (800,000 x $5).

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a monopoly that can perfectly price discriminate has a marginal revenue curve that is _____ the demand curve for the good that the monopoly produces. if a monopoly can perfectly price discriminate, it produces _____ deadweight loss.

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The marginal revenue curve of a monopoly with perfect price discrimination is steeper than the demand curve. A monopoly doesn't cause any deadweight loss if it can properly price discriminate.

What impact does perfect pricing discrimination have on revenue?

The monopolist will continue to produce until marginal cost matches the price of the good because under perfect price discrimination, the marginal revenue curve corresponds with the market demand curve.

What happens when pricing discrimination is perfect?

The effects of perfect price discrimination: more will be produced than a single-price monopolist (Qp=MC), certain consumers will pay higher prices than they would have otherwise (Pm), while other consumers will pay lower prices.

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In a given town, demand for fish is given by P = 4726 - 13 * Q, where P and Q are fish price and fish quantity (in tons) demanded. What is Consumer Surplus if the one tone of fish price is $1232?

Answers

The Consumer Surplus when the price of one ton of fish is $1232 is $469,197.

In the given town, the demand for fish is given by P = 4726 - 13 * Q. To find the Consumer Surplus when the price of one ton of fish is $1232, follow these steps:
1. Find the quantity demanded at the given price: 1232 = 4726 - 13 * Q
2. Rearrange the equation to solve for Q: Q = (4726 - 1232) / 13
3. Calculate the quantity: Q = 3494 / 13 = 269 tons


4. Calculate the area of the triangle representing Consumer Surplus, which is (1/2) * base * height. The base is the quantity demanded (269 tons) and the height is the difference between the maximum price consumers are willing to pay (4726) and the actual price (1232).
5. Calculate Consumer Surplus: (1/2) * 269 * (4726 - 1232) = 469197

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your company needs to run several monthly workloads that will each take several hours to complete. although critical, these workloads can be stopped and restarted without adversely affecting the outcome of the job. which pricing model would you use to deliver the most economical solution?

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C. Spot instances pricing model would you use to deliver the most economical solution.

An economic system is a machine of inter-associated manufacturing and consumption sports that ultimately decide the allocation of resources within a hard and fast. The manufacturing and consumption of goods and offerings as a whole satisfy the desires of those residing and working inside it.

A prominent instance of an financial system is the conventional financial system that encompasses the customs and statistics of a country to guide production and distribution of products. conventional economies are particularly primarily based on agriculture, fishing, and searching. Economics play a position in all the following fundamental lifestyles reviews: How the government plans regulations. The country of the housing marketplace and actual property funding opportunities. The capability to make smart economic decisions.

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Disclaimer: The question is incomplete. Please read below to find the missing content.

Your company needs to run several monthly workloads that will each take several hours to complete. Although critical, these workloads can be stopped and restarted without adversely affecting the outcome of the job. Which pricing model would you use to deliver the most economical solution?

A. On-demand instances

B. Reserved instances

C. Spot instances

D. Free-tier instances

In the context of inventory costs, _____ costs can reflect backorders or service interruptions for external customers.

Answers

In the context of inventory costs, Stockout costs can reflect backorders or service interruptions for external customers.

What are Stockout costs?The capital lost from inventory that is no longer available for customers to purchase is known as stockout costs. The company loses money when a customer cannot purchase an item because it is out of stock.Stockout costs might represent backorders or interruptions in service for customers outside the supply chain in the context of inventory expenses.The three basic types of inventory-related expenses are ordering, holding, and shortage costs.Managers struggle to predict customer demand, especially when there is a significant departure from historical sales, which makes it challenging to calculate stock-out costs.

Therefore, n the context of inventory costs, Stockout costs can reflect backorders or service interruptions for external customers.

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Prof Denzil Carew is hired by Stanvard University to teach business law for the full 3-semester academic year from 1 Jan 2021 at a salary of $10,000 per month. After school has been in session for two months, the Business Administration Building is destroyed by fire. The University refuses to pay him any further salary, claiming they are discharged from their obligation of performance. Is the University discharged from its obligation of performance

Answers

The University's decision to refuse to pay Prof Denzil Carew any further salary after the Business Administration Building was destroyed by fire may be a breach of their obligation of performance.

When Prof Denzil Carew accepted the job offer from Stanford University to teach business law for the full 3-semester academic year from 1 Jan 2021 at a salary of $10,000 per month, he entered into a contract with the University. The contract likely included terms and conditions that outlined the University's obligations to Prof Carew, as well as Prof Carew's obligations to the University.

One of the University's obligations was to pay Prof Carew his salary in accordance with the terms of the contract. The fact that the Business Administration Building was destroyed by fire does not excuse the University from fulfilling its obligation to pay Prof Carew. The University's decision to refuse to pay Prof Carew any further salary after the building was destroyed may be a breach of their obligation of performance.

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why is cost price important in price determination?​

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Answer:

The cost price is the price you buy a product for. You need to compare the cost price to the selling price to know whether you got a profit or loss (did you make money or did you not).

If you don't know the cost price, you don't know whether you have a profit or loss. Of course everyone wants a profit (make money) so to determine a selling price the cost price is important.

answer

The most important factor affecting the price of a product is its cost. ADVERTISEMENTS: Product cost refers to the total of fixed costs, variable costs and semi variable costs incurred during the production, distribution and selling of the product. ... The price for a commodity is determined on the basis of the total cost.

Expanding Access to Capital for Rural Job Creators Act.

Answers

The Expanding Access to Capital for Rural Job Creators Act would require the Securities and Exchange Commission to submit an annual file on the capital challenges rural small groups face and enable Congress to decide if legislative action is needed.

Expanding Access to Capital for Rural Job Creators Act.

U.S. Congressman Henry Cuellar’s (D-TX-28) bipartisan Expanding Access to Capital for Rural Job Creators Act handed in the House of Representatives. Congressman Alex X. Mooney (R-WV-2), Congressman Chris Pappas (D-NH-1), and Congresswoman Teresa Leger Fernandez (D-NM-3) co-sponsored the Act to survey the issues small groups in rural areas face when attempting to get right of entry to capital.

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Jason needs to fill the position of cost evaluator at his company but realizes there isn't anyone in the organization qualified to take this job. jason would be advised to use _____ in this situation.

Answers

Recruitment methods such as job postings, advertising, and hiring agencies.

Jason's best option is recruitment services. Recruitment services help fill job openings with competent people. They examine résumé databases, interview people, and do background checks to find candidates. These services can also evaluate candidates and propose them to businesses. Recruitment firms can provide advise on how to attract top job prospects.

Recruitment services can benefit Jason's company in various ways. By promptly finding the best individuals, recruitment services save time and money. They can also offer insight into the employment market and what candidates want in terms of compensation, benefits, and job duties. They can also help make a job description more appealing and competitive.

Jason's best option for hiring a cost evaluator is recruitment services. They can swiftly find the top candidates and advise on how to make the position more appealing. This will assist the organization choose the best applicant and save time and money.

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What will happen to the market for video games if consumer income drops?
A. Graph 1
B. Graph 2
C. Graph 3
D. Graph 4

What will happen to the market for video games if consumer income drops?A. Graph 1B. Graph 2C. Graph

Answers

Answer:

a

Explanation:

what are factors affect demand for labour​

Answers

The factors that effect demand for labour are:

The quantity of a produt that labor produces

A change in the production process that uses more or less labor

A change in goverment policy that effects the quantity of labor

The Heating Division of Monty International produces a heating element that it sells to its customers for $39 per unit. Its unit variable cost is $22, and its unit fixed cost is $11. Top management of Monty International would like the Heating Division to transfer 15,200 heating units to another division within the company at a price of $29. Assume that the Heating Division has sufficient excess capacity to provide the 15,200 heating units to the other division. What is the minimum transfer price that the Heating Division should accept?

Answers

The Heating Division of Monty International, which produces heating elements, is asked to transfer 15,200 units to another division within the company at a minimum acceptable price.

In this scenario, the Heating Division of Monty International is requested by top management to transfer 15,200 heating units to another division within the company. The division has excess capacity to provide the required units. However, the minimum transfer price that the Heating Division should accept needs to be determined.

The unit variable cost for the heating element is $22, which includes direct materials, direct labor, and variable overhead. The unit fixed cost, which covers indirect costs and fixed overhead, is $11. The division currently sells the heating element to customers for $39 per unit.

To determine the minimum transfer price, the Heating Division needs to consider its unit variable and fixed costs. Selling the units to the other division at $29 per unit would result in a loss of $3 per unit (($22 + $11) - $29). Therefore, the minimum transfer price that the Heating Division should accept is $32 per unit (($22 + $11) + $3). This price ensures that the division covers both its variable and fixed costs, resulting in no loss from the transfer.

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In a free market economy, the market, not the
determines prices. The interactions of
and
determine the price in the market?

Answers

In a free market economy, the market, not the government, determines prices. The interaction of producers and consumers determine the price in the market.

Answer: 1. government , 2. consumers , 3. producers

Explanation: edmentum / plato

What is it called when businesses are doing poorly and stock prices drop?

Answers

Answer:

When a stock price falls, that means the company must sell additional shares of stock to raise the same amount of proceeds

Explanation:

Risk management refers to the practice of identifying potential risks in advance, analyzing them and taking precautionary steps to reduce or curb the risk.

Answers

Answer:

True

Explanation:

Risk management is the practice of identification of number of risks that the organization faces and then assessing each of them. After assessment of the risks, the organization try to find ways to eliminate or reduce each single risk so that the business operations do not get affected. The precautionary measures can be simply avoid the risk, face the risk, share the risk (Insurance) and reduce the risk to acceptable level.

Definition: The annual interest rate paid by a bond. It does not reflect the interest rate paid over the life
of the bond

Answers

Answer:

the answer is: Current yield

______ Is a market in which a large number of suppliers compete with each other to satisfy the needs and wants of a large numbers of consumers at a competitive price.???

Answers

Answer : Monopolistic competition

Answer:

Monopolistic Competition

Explanation:

In a monopolistic competitive market, there are large numbers of sellers who do not sell identical products instead they sell differential products. They compete with each other at a competitive price. The products could be differentiated in many ways including quality, style, location and even brand name. Since they compete at a competitive price, if there is a substantial rise in the price of any of the products, the buyers could quickly shift from one product to another. The most crucial factor behind product differentiation is because of geographical factors. Under a monopolistic competitive market, the sellers do not have any influence over customer loyalty and limited control over the price.

You are the manager of a project that has an operating leverage rating of 2.8 and a required return of 14 percent. Due to the current state of the economy, he expects sales to decrease by 7 percent next year. What change should you expect in operating cash flows next year given your sales forecast?

Answers

Answer:

The change should you expect in operating cash flows next year would be 19.60%

Explanation:

In order to calculate the change should you expect in operating cash flows next year given your sales forecast we would have to make the following calculation:

change should you expect in operating cash flows=operating leverage rating*percentage of decrease sales next year

change should you expect in operating cash flows=2.8*0.07

change should you expect in operating cash flows=19.60%

The change should you expect in operating cash flows next year would be 19.60%

when CEO robert nardell took over home depot in 2000, there was central control. store managers acted independently and costs were higher than competitors like lowes. nardell changed the culture to focus on central control and cutting costs. to control costs, store managers were not allowed to choose products for local customers. employees os their customer-focused attitudes, and customer service suffered. to repair this , the next CEO, frank blake , sought to restore the "orange apron" culture. what does this example best illustrate?

Answers

Answer:

corporate culture is chosen by senior management in middle managers and employees have little control over it

Explanation:

I believe this is the answer because based off what it said the employees and managers were not allowed to choose products

Glen has taken his team through the marketing research process for their company and crunched the data to find the correlations of customer and product relationships. He is now ready to present his findings to management? After his analysis, what next step will the management team take?

Answers

After the analysis, the next step to be taken by Glen would be to work on  the discovered research and take actions for enhance growth.

A research wing in any organization plays a crucial role as it helps to rediscover new ideas and correlations and also the analysis of data on several fronts can help in engaging greater results as output. The data can be presented in the form of presentations with real time analysis. This quantitative research can help in identification of bigger roles which the marketing team can play in increasing their profits. Market research is a systematic process of collecting, analyzing and interpreting information on the real time scale.  

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Describe how energy from the sun is balanced with energy lost from the earth is this a net zero process?

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Energy from the sun is balanced with energy lost from the earth through the process of radiative equilibrium. Radiative equilibrium is a state of balance in which incoming energy from the sun is balanced with outgoing energy from the earth. This balance is maintained through various processes that occur in the atmosphere, such as absorption, reflection, and emission of radiation.In the process of radiative equilibrium, the amount of energy absorbed by the earth is equal to the amount of energy radiated back into space. This means that the energy balance is zero, and the process is referred to as a net zero process. This balance is critical for maintaining a stable climate on earth. If the balance were to be disrupted, the climate would change, and there would be significant consequences for life on earth.

Therefore, it is essential to understand how the energy from the sun is balanced with the energy lost from the earth and how this balance can be maintained over time.

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Explain the technique of making bamboo based handicrafts with an example.​

Answers

Answer:

Bamboo can be processed into thin strips or sheet materials for bamboo plaiting , commonly known as bamboo strips. The processing procedures of bamboo strips include selecting materials , sawing bamboo, pruning, scraping, dividing, splitting, setting the width, thinning and chamfering.

Explanation:

Example: •Bamboo furniture

•Bamboo toys

•Bamboo wind chimes

•Bamboo lamps and lanterns

•Bamboo placements and coasters

The technique bamboos are processed into thin strips or sheet materials for bamboo plaiting, known as bamboo strips and the processing procedures of bamboo strips include selecting materials, sawing bamboo, pruning, scraping, dividing, splitting, setting the width, thinning and chamfering. For example, bamboo furniture.

What is the process of making bamboo handicrafts?

The process of making bamboo handicrafts is given below. First, the bamboo is completely dried before use. The bamboo is segregated in the beginning according to the products that are going to be made. They are cut to the required sizes with the help of a bamboo sawing machine. The cut bamboo sticks are arranged for the products that have to be made.

The products are always made depending on the client’s orders. For example, to make a stool, bamboo is cut respectively into four sets to make the legs and eight sets of smaller lengths to connect the legs horizontally to get a firm hold of the four legs of the stool. A stool is something similar to that a chair but doesn’t hold a backrest.

A stool is a seat for a single person without any backrest.

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question content area deferred revenue is revenue that is a.earned and the cash has been received b.not earned and the cash has not been received c.not earned but the cash has been received d.earned but the cash has not been received

Answers

Option (c) is the best choice. Deferred revenue is money that has been received but is not yet earned.

Describe deferred revenue with several instances.

Unearned income, also referred to as deferred revenue, is the term used to describe advance payments a company receives for products or services that will be supplied or provided in the future. The prepayment recipient company reports the sum as a liability on its balance sheet known as deferred revenue. Money received in advance for goods or services that will be supplied later is referred to as deferred revenue. Rent payments made in advance or annual membership fees paid at the start of the year are common examples of deferred revenue.

Why are obligations for deferred revenue?

Deferred revenue is a short-term liability account because, unlike a debt, it relates to goods and services that you owe clients rather than money that you owe them. To accurately record income and expenses in the period they really occurred, accounting often employs deferrals like deferred revenue.

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Which completes the equation?
O + A + Consideration (+______) = K

Legal capability
Legal capacity
Legal corporations
Legal injunction

Answers

"Legal capacity" is the final term that completes the equation.

What is the full legal age?

What a person is legally capable of doing depends on the rules and regulations of the legal system. It is a fiction with no underlying reality that every legal system uses to establish a relationship with its constituents.

What does the legal competence to contract mean?

A party has the legal authority to enter into a contract if they have the capacity to do so. Capability also implies that a person must be legally competent. A person's ability is determined by two factors: whether they are of legal age to enter into contracts and if they are mentally able to do so.

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Disadvantages of choosing a job that is extremely popular or in demand

Answers

The disadvantage of choosing a job that is very popular or a job that is in high demand is that after a while such a job may become saturated or it would become monotonous.

What is a high demand job?

This is the term that is used to refer to a job that the people that wpould employ labor are constantly in need of. Such a job is one that would require the people that have the qualification to opt in and get the places and the roles that they are to fill.

The issues that may arise from such a job that is in high demand is that after a period, such a job may have a lot of persons that would want to fulfil the role.

The number of qualified persons may become more than the job that is available for the people to do in the long run.

Hence this is a disadvantage. Therefore I would conclude by saying that the disadvantage of choosing a highly popular job is that the number of persons that are willing to fulfil the role may exceed the job overtime.

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explain the process that economists use to conduct a Cost-Benefit Analysis (CBA) for a high-speed rail ​

Answers

Answer:

A cost-benefit analysis is a systematic process that businesses use to analyze which decisions to make and which to forgo. The cost-benefit analyst sums the potential rewards expected from a situation or action and then subtracts the total costs associated with taking that action. Some consultants or analysts also build models to assign a dollar value on intangible items, such as the benefits and costs associated with living in a certain town.

KEY TAKEAWAYS

A cost-benefit analysis (CBA) is the process used to measure the benefits of a decision or taking action minus the costs associated with taking that action.

A CBA involves measurable financial metrics such as revenue earned or costs saved as a result of the decision to pursue a project.

A CBA can also include intangible benefits and costs or effects from a decision such as employees morale and customer satisfaction.

Cost-Benefit Analysis (CBA)

Understanding Cost-Benefit Analysis (CBA)

Before building a new plant or taking on a new project, prudent managers conduct a cost-benefit analysis to evaluate all the potential costs and revenues that a company might generate from the project. The outcome of the analysis will determine whether the project is financially feasible or if the company should pursue another project.

In many models, a cost-benefit analysis will also factor the opportunity cost into the decision-making process. Opportunity costs are alternative benefits that could have been realized when choosing one alternative over another. In other words, the opportunity cost is the forgone or missed opportunity as a result of a choice or decision. Factoring in opportunity costs allows project managers to weigh the benefits from alternative courses of action and not merely the current path or choice being considered in the cost-benefit analysis.

By considering all options and the potential missed opportunities, the cost-benefit analysis is more thorough and allows for better decision-making.

The Cost-Benefit Analysis Process

A cost-benefit analysis should begin with compiling a comprehensive list of all the costs and benefits associated with the project or decision.

The costs involved in a CBA might include the following:

Direct costs would be direct labor involved in manufacturing, inventory, raw materials, manufacturing expenses.

Indirect costs might include electricity, overhead costs from management, rent, utilities.

Intangible costs of a decision, such as the impact on customers, employees, or delivery times.

Opportunity costs such as alternative investments, or buying a plant versus building one.

Cost of potential risks such as regulatory risks, competition, and environmental impacts.

Benefits might include the following:

Higher revenue and sales from increased production or new product.

Intangible benefits, such as improved employee safety and morale, as well as customer satisfaction due to enhanced product offerings or faster delivery.

Competitive advantage or market share gained as a result of the decision.

An analyst or project manager should apply a monetary measurement to all of the items on the cost-benefit list, taking special care not to underestimate costs or overestimate benefits. A conservative approach with a conscious effort to avoid any subjective tendencies when calculating estimates is best suited when assigning a value to both costs and benefits for a cost-benefit analysis.

Finally, the results of the aggregate costs and benefits should be compared quantitatively to determine if the benefits outweigh the costs. If so, then the rational decision is to go forward with the project. If not, the business should review the project to see if it can make adjustments to either increase benefits or decrease costs to make the project viable. Otherwise, the company should likely avoid the project.

With cost-benefit analysis, there are a number of forecasts built into the process, and if any of the forecasts are inaccurate, the results may be called into question.

Limitations of the Cost-Benefit Analysis

For projects that involve small- to mid-level capital expenditures and are short to intermediate in terms of time to completion, an in-depth cost-benefit analysis may be sufficient enough to make a well-informed, rational decision. For very large projects with a long-term time horizon, a cost-benefit analysis might fail to account for important financial concerns such as inflation, interest rates, varying cash flows, and the present value of money.

a new startup airline is offering free round-trip tickets to anywhere to the first 600 people who enter the office on the airline's first day of business. you arrive 24 hours before they are scheduled to open to be sure to get the free tickets, and you buy food from ve

Answers

A new startup airline is offering free round-trip tickets anywhere to the first 600 people who enter the office on the airline's first day of business. You arrive 24 hours before your scheduled opening to make sure you get a free ticket, and you buy food from vendors while waiting in line. The cost of the ticket to you is the cost of your food while you wait in line and the opportunity cost of your time.

Economics can be defined as the study of how individuals, businesses and governments make choices in allocating resources to meet their needs. These groups determine how resources are and how they are organized and coordinated to achieve maximum results. They are mostly concerned with the production, distribution and consumption of goods and services.

The economy is divided into two important parts, namely: Macroeconomics & Microeconomics

Microeconomics can be defined as the study of decisions made by people and businesses regarding the allocation of resources and the prices of goods and services.Macroeconomics can be defined as a branch of economics that describes a substantial picture

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prove that for any full rank transformation matrix t, the eigenvalues of ay and a from part (a) are the same. An investor has the following portfolio: Company Shares owned Beta Expected return 300 150 1.05 Price per share $52 $80 $42 $35 JNJ CAT GE IBM 1.1 7.20% 7.40% 5.96% 6.92% 320 0.74 400 0.98 What is the expected return of the portfolio? 6.9% 5.8% 8.3% 10.12% An investor has the following portfolio: Company Shares owned Beta Expected return 300 150 1.05 Price per share $52 $80 $42 $35 JNJ CAT GE IBM 1.1 7.20% 7.40% 5.96% 6.92% 320 0.74 400 0.98 What is the expected return of the portfolio? 6.9% 5.8% 8.3% 10.12% You have on a $200 - $180 bear spread constructed with puts. You turn bullish on direction and bearish on volatility. Describe your follow up trade with reference to the option Greeks before and after your new trade. Assume that the margin requirement on the S&P 500 futures contract is 10%, and the stock index future is settled in May 20, 2018 at 2,000. Each contract has a multiplier of $250. a) How much margin must be put up for holding each contract? (2 marks) b) Investor A shorted one contract in May 21 at 2,000. If the futures price settled at 2,020 in May 21, what will happen to the margin account of investor A at market close of May 21? (4 marks) c) What was the investor As percentage return based on the amount put up as margin in May 21 after market close? (4 marks) d) Investor B sent $200,000 to setup her margin account with her broker in May 19, and longed two S&P 500 index contracts in May 20 at 2000. In May 21, investor B closed one contract at 2,020. In May 22, investor B did nothing while the futures price settled at 1,960. What was the investor Bs percentage total investment return up to May 22 after market close? You have been just hired as CEO of Bitter Inc., a conglomerate that operates inthree businesses. The details of the businesses are provided below:EntertainmentMovie TheatersTravel ServicesCompanyRevenues$450$400$325$1,175Operating Income (next year)$200$85$95$380Effective tax rate36%20%36%32.42%After-tax Operating Income (next year)$128$68$61$257Invested Capital$525$375$125$1,025Expected Growth Rate3.50%3.50%3.50%3.50%Cost of capital11.00%9.25%8.00%10.25%a. What is the value of the consolidated company, using the combined companys cash flows and cost of capital?b. What is the value of Bitter as the sum of its parts, using the divisional cash flows and the industry average cost of capital for each division?c. If you are getting a different value for Bitter in part b, where is the difference coming from?A conglomerate discount is being applied by the market.The broken-up businesses will be run more efficiently as stand-alone units.The combined company has a less optimized capital structure than that the individual units could have.The broken-up businesses will pay less in taxes than the combined company.The broken-up businesses will have higher growth than the combined company.All of the above.