Advantages of using the opportunity cost of capital as a discount rate are: a. it is easily understood by most investors. b. it permits direct comparison between projects of the same general risk category. c. it permits risk analysis to be incorporated into policy guidelines. d all of the above.

Answers

Answer 1

Answer:

Answer:

The correct option is D (all of the above)

Explanation:

Opportunity cost is the rate of return which can be earned from the next best alternative investment opportunity with similar risk profile. Also the meaning of opportunity cost doesnt change only the factors do.

This concept is not as simple as it may first appear. The person making the decision must estimate the variability of returns on the alternative investments through the period during which the cash is expected to be used.

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What is the purpose of the New Window command?It opens a new blank worksheet.
It opens one of the current worksheets into a new window.
It opens a blank workbook.
It opens a new side-by-side window of an existing workbook.

Answers

Answer:

It opens one of the current worksheets into a new window.

Answer:

It opens one of the current worksheets into a new window.

Explanation:

edge 2020 lesson-managing workbook properties

An investment project has annual cash inflows of $3,900, $4,800, $6,000, and $5,200, for the next four years, respectively. The discount rate is 15 percent. a. What is the discounted payback period for these cash flows if the initial cost is $6,600

Answers

Answer:

1.88 years

Explanation:

Payback period is the time in which a project returns back the initial investment. Initial Investment is recovered within the first two annual Cash inflows.

Payback Period = 1+0.88 = 1.88 years

All the working are made in the MS Excel File attached with this answer, pleas find it.

Answer:

The discounted payback period is 1.88 years

Explanation:

The discounted pay back period is the number of years it takes for the investment to break even by this it means how many years it takes discounted cash flows to pay the initial investment.

Initial Investment $6,600

W e then discount the cash inflows to find the time it takes to pay off initial investment

Year 1 = 3900/ (1.15) =$3,391.30

Remainder of initial investment = -6600+3391.30= -3,208.7

Year two = 4800/ 1.15^2 = $3,629.49

Remainder of initial investment = -3208.7-3629.49 = 420.79

This yield positive results therefore the discounted payback period is sometime between year 1 and year 2.

To get the exact period we take what reamined over what paid

3208.7/3629.49 = 0.88

So it 1 year + 0.88 =1.88 years

Muddy Meadows Earthmoving can purchase a bulldozer for $147,000. After 7 years of use, the bulldozer should have a salvage value of $50,000. What depreciation is allowed for this asset in Year 4 for.(a) Straight-line depreciation?(b) 150% declining balance depreciation?(c) 40% bonus depreciation with the balance using 5-year MACRS?PLEASE DO NOT USE EXCEL AND SHOW CALCULATIONS1.) a) $13,857; b) $15,676; c) $10,1612.) $13,857; b) $15,676; c) $44663.) $21,000; b) $15,676; c) $10,1614.) $13,857; b) $12,437; c) $10,161

Answers

Answer:

1) a. $13,857 : b. $15,676 : c. $10,161

Explanation:

(a) Straight-line depreciation:

depreciation expense per year = ($147,000 - $50,000) / 7 = $13,857 per year

(b) 150% declining balance depreciation:

150% depreciation = 1/7 x 1.5 = 21.42%

depreciation expense year 1 = $147,000 x 1/7 x 1.5 = $31,500

depreciation expense year 2 = $115,500 x 1/7 x 1.5 = $24,750

depreciation expense year 3 = $90,750 x 1/7 x 1.5 = $19,446

depreciation expense year 4 = $71,304 x 1/7 x 1.5 = $15,279 (this number is similar to $15,676, so I will choose that number. Depreciation % may vary a little due to rounding)

depreciation expense year 1 = $147,000 x 40% = $58,800

depreciation expense year 2 = $88,200 x 32% = $28,224

depreciation expense year 3 = $88,200 x 19.20% = $16,934

depreciation expense year 4 = $88,200 x 11.52% = $10,161

10. The act of assigning formal authority and responsibility for a completion of specifi activities to a subordinate. A/ Allocation B/ Delegation C/ Subordinate D/ All

Answers

The answer is B/ Delegation.

If the percentage change in the quantity demanded of a good is greater than the percentage change in the price of the good, then how is the demand for the good characterized?

Answers

Answer:

Price Elastic

Explanation:

We know that

The formula to compute the price elasticity of demand is shown below:

= (Percentage change in quantity demanded) ÷ (percentage change in price)

The classification as follows

1. Perfectly inelastic = If zero

2. Inelastic = When elasticity is below than one

3. Unitary elastic = When elasticity is equal to one

4. Elastic = When elasticity is exceeded than one

5. Perfectly elastic = When elasticity is in infinity

Since the percentage change in the quantity demanded of a good is greater than the percentage change in the price of the good which reflects that the elasticity is more than one

Answer:

The demand is price elastic in nature because it is greater than 1.

Explanation:

Price Elasticity of demand refers to the response of quantity demanded of a good to the change in price. Of course, when the price decreases, quantity demanded of a good increases and vice-versa but to how much degree is determined by the Price Elasticity of demand.

Mathematically, Price Elasticity of Demand is the ratio of % change in quantity demanded of a good and % change in the price of a good i.e.

Price Elasticity of Demand = % change in quantity demanded of a good / % change in the price of a good

In the problem, since the percentage change in the quantity demanded of a good is greater than the percentage change in the price of the good, the above ratio will be greater than 1. Hence, the demand of the good is price elastic.

When the Fed carries out contractionary monetary policy through selling bonds __________. Select the correct answer below: it reduces the supply of loanable funds which raises the interest rate it reduces the supply of loanable funds which lowers the interest rate it increases the supply of loanable funds which lowers the interest rate it increases the supply of loanable funds which increases the interest rate

Answers

Answer: it reduces the supply of loanable funds which raises the interest rate

Explanation: Contractionary monetary policy is a monetary policy that reduces the supply of money and increases interest rates and is carried out by the Fed through selling of bonds. This reduces the supply of loanable funds and increases the interest rate. It is driven by increases in the various base interest rates with a goal to reduce inflation by limiting the amount of active money in circulation.

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