BUSINESS HIGH SCHOOL

You are evaluating a project that will cost $500,000, but is expected to produce cash flows of $125,000 per year for 10 years, with the first cash flow in one year. Your cost of capital is 11% and your company’s preferred payback period is three years or less. 1. What is the payback period of this project?
2. Should you take the project if you want to increase the value of the company?

Answers

Answer 1
Answer:

Answer:

1. 4 years

2. No

Explanation:

Payback period calculates the amount of time to recoup the total investment made on a project. It calculates how long the cash flows generated from a project would cover the cost of the project.

The cost of the project is $500,000

Cash flows are $125,000 per year for 10 years.

In the first year, the cost of the project is reduced by $125,000 and becomes $375,000.

In the second year, the cost of the project is reduced by $125,000 and becomes $250,000.

In the third year, the cost of the project is reduced by $125,000 and becomes $125,000.

In the fourth year, the cost of the project is reduced by $125,000 and becomes $0.

The cost of the project is totally recouped in the 4th year. therefore, the payback period is 4 years.

But the company has a preferred payback period of 3 years ,therefore , the firm won't undertake the project because the payback period is more than 3 years.

Related Questions

Among the advantages of cycle counting is that it: allows more rapid identification of errors and consequent remedial action than is possible with annual physical inventory. makes the annual physical inventory more acceptable to management. does not need to be performed for less expensive items. does not require the detailed records necessary when annual physical inventory is used. does not require highly trained people.
Paloma Company establishes a $200 petty cash fund on Jan 1. On January 8, the fund shows $107 in cash along with receipts for the following expenditures: postage, $39; transportation-in, $12; delivery expenses, $14; and miscellaneous expenses, $28. Palmona uses the perpetual system in accounting for merchandise inventory.Prepare journal entries to (1) establish the fund on January 1, (2) reimburse it on January 8, and (3) both reimburse the fund and increase it to $350 on January 8, assuming no entry in part 2. Hint: Make two separate entries for part 3.
When Beck joined his uncle's oil exploration company in east Texas, he was given several hundred shares of stock in the firm, and was officially made a partner. The firm's accountant explained that the company paid taxes the same way as regular partnerships, by passing the profits through to each partner. Beck could purchase more shares of the company on a public stock exchange, as long as someone was willing to sell his/her shares. This firm was likely a special form of ownership called a:
Give examples of three different economic freedoms in a free enterprise system.
A family's ability to bounce back from a crisis like homelessness home and this is an example of parental resilience reduced child abuse and neglect determination or none above

Leo is starting a company that leases shared workspaces, and he has approached SCORE, an SBA organization that assists small-business owners in setting up their companies. The SCORE counselors would probably advise Leo, as a new business owner, toMultiple Choice1. learn from experience, the best teacher, rather than a mentor.2. avoid developing a business plan the first year of business.3. get a new perspective by asking people who have failed.4. try new things regardless of the risk.Write a business plan.

Answers

Answer:

5) Write a business plan.

Explanation:

A business plan usually includes:

  • a short description of the nature of your business (either existing or proposed),
  • projected revenues and total sales in units,
  • basic marketing strategy,
  • estimated costs (both production, and sales and administrative),
  • financial background of the existing company or the financial background of the entrepreneur,
  • short term and long term business goals.

Suppose that a company issues a zero-coupon bond (bond with no coupons, doesn't pay interest to the bondholders, but is negotiated at a discount). Those securities have face value of GBP 10,000, and maturity in exactly 16 years. The market rate is 8% and the interest is compounded semiannually.

Answers

Answer:

the price of the zero-coupon bond is approximately GBP 4,524.21. This means that an investor would need to pay GBP 4,524.21 upfront to purchase the bond and would receive GBP 10,000 at maturity in 16 years.

Explanation:

A zero-coupon bond is a type of bond that does not pay any interest to the bondholders. Instead, it is issued at a discount from its face value and matures at a future date when the bondholder receives the full face value of the bond.

In this case, the company has issued a zero-coupon bond with a face value of GBP 10,000 and a maturity period of 16 years. The market rate for such bonds is 8%, compounded semiannually.

To calculate the price of the bond, we need to discount the future cash flow of GBP 10,000 back to the present value using the market rate of 8%. Since the interest is compounded semiannually, we need to adjust the interest rate accordingly.

The formula to calculate the present value of a future cash flow is:

PV = FV / (1 + r/n)^(n*t)

Where:

PV = Present Value

FV = Future Value

r = Interest Rate

n = Number of compounding periods per year

t = Number of years

In this case, FV is GBP 10,000, r is 8% (0.08), n is 2 (semiannual compounding), and t is 16 years.

Using the formula, we can calculate the present value as follows:

PV = 10,000 / (1 + 0.08/2)^(2*16)

PV = 10,000 / (1.04)^(32)

PV = 10,000 / 2.208

PV ≈ GBP 4,524.21

Which action will be least helpful if you've been the victim of identity theft

Answers

The action that will be the least helpful if you've been the victim of identity theft is : Withdraw your money from all account.

You should report it to the law enforcement instead. Withdrawing all of your money from all account which make it even harder to catch the thief since you got no bait left

The action that appeared to be the least helpful if you’ve been the victim of identity theft is ordering your latest credit report.

If you’ve been a victim of identity theft, then it is incumbent on you to report or contact one of the credit reporting companies and officially place a fraud alert on your credit report.

Further Explanation

Identity theft is when an individual deliberately steals your information and make use of such information without your consent or permission. Identity theft has become a big business for fraudsters in the United States.  

In 2016, 15.4 million Americans were a victim of theft. Also one of the tops complains of consumers to the Federal trade commission is Identity theft.  

Identity theft can happen to an anyone regardless of how careful you are. However, there are major steps you can take if you are a victim of identity theft.

Some of the ways you can assist to stop an identity thief to further commit fraud using your details include

  • Contact the credit report company and place a fraud alert
  • Place a security block on your credit report
  • Contact the banks and companies where the fraud was committed.
  • Contact the IRS in case of Tax-related ID theft
  • Clean up all your account
  • Report any case regarding identity theft to the Federal trade commission (FTC)

LEARN MORE:

KEYWORDS:

  • victim
  • identity theft
  • fraud
  • companies
  • account
  • irs

The ____ section of the project scope document is where the contractor or project team can state and clarify exactly what is included in the work scope and provide an opportunity to reconsider items that are not stated but that the customer may have forgotten to include in her requirements or RFP.

Answers

The statement of work section of the project scope document is where the contractor or project team can state and clarify exactly what is included in the work scope and provide an opportunity to reconsider items that are not stated but that the customer may have forgotten to include in her requirements or RFP.

I hope this helps :)

Holton is the manager at a small restaurant. What can he do to ensure the workplace offers a safe environment for employees?

Answers

Answer and explanation:

When managing a restaurant it is important to keep certain safety guidelines to ensure the employees' well-being. Installing smoke detectors, making sure the cooking area is clean and out of plagues, giving employees special uniforms to ensure hygiene and prevent burns, and keeping a first-aid kit in front of mild emergencies are some practices managers should promote.

Boris cannot afford his current car insurance payments. How can he most easily lower them? A. By decreasing his deductible
B. By driving with fewer passengers
C. By buying a cheaper car
D. By increasing the length of his policy

Answers

C. buy a cheaper car
C. Buying a cheaper car because with a cheaper car the insurance payment will be less because the "insurance" in the ar will be lower lol
Other Questions
Danika, a board member for a medium-sized corporation, faces an ethical dilemma. She is unsure whether the board should fire senior employees who have violated rules or merely discipline those employees but keep them on staff to avoid potentially harmful publicity. Danika asks herself, "Would my family members and friends approve of this decision, and am I willing to see the decision communicated to all people and groups affected?" Asking this question is part of the ________ rule. Multiple Choice justice moral rights utilitarian practical
visit any successful local business and interview the owner on the initiatives taken by his or her business in poverty, HIV and AIDS, Unemployment, Crime, and Inclusivity
What OSHA Act requires employers to "furnish to each of his/her employees employment and a place of employment which are free from recognized hazards that are causing or are likely to cause death or serious physical harm to his/her employees"?
Powder Room Mess. For $300,000, Willis agrees to build a new home for Robert, who is very picky. Willis builds the home to Robert's specifications with one exception. The faucets and linoleum flooring in an upstairs powder room are not exactly what Robert specified. That was a mistake on Willis's part, but he had not intentionally failed to follow specifications. When Robert sees the powder room, he goes ballistic and tells Willis that he will not pay Willis anything for the house. It will take $300 to put in correct faucets and linoleum. Willis says that he is willing to pay $300 to put Robert in the position he would have been in had the correct faucets and linoleum been used, but that is all he is willing to pay. Which of the following is true regarding whether Willis breached the contract?1) Willis did not breach the contract.2) Willis materially breached the contract.3) Willis substantially breached the contract.4) Willis breached the contract, but the breach was not material.5) Willis committed an anticipatory breach of the contract.