A business project with an 5 year life span and an initial cost of £56,000 generates revenues of £-6,000 in year 1, £9,000 in year 2, £18,000 in years 3 and 4, and £21,000 in year 5

[20 marks]

(i) Briefly explain the Net Present Value (NPV) method of investment appraisal and the assumptions that are made when employing this technique.

(ii) What is the Net Present Value of the project if the discount rate is: 1%, 2%, 3% and 4% (explain your calculations)

(iii) Graph the Net Present Value of the project obtained for each interest rate in part ii).

(iv) Approximate the Internal Rate of Return for this project and explain this construct.

Answers

Answer 1

The Net Present Value (NPV) method is a technique used for investment appraisal. It calculates the present value of future cash flows generated by a project and compares it to the initial cost of the investment.

(i) The Net Present Value (NPV) method evaluates the profitability of an investment by discounting future cash flows to their present value using a chosen discount rate. The NPV is calculated by subtracting the initial cost of the investment from the sum of the present values of the expected cash flows.

This method assumes that cash flows occur at the end of each period, the discount rate remains constant throughout the project's life, and cash flows can be reinvested at the discount rate.

(ii) To calculate the NPV for different discount rates, we need to discount each cash flow using the respective discount rate and then sum them up. Let's calculate the NPV for the given project using discount rates of 1%, 2%, 3%, and 4%.

Discount Rate: 1%

NPV = -£56,000 + (£-6,000 / (1+0.01)^1) + (£9,000 / (1+0.01)^2) + (£18,000 / (1+0.01)^3) + (£18,000 / (1+0.01)^4) + (£21,000 / (1+0.01)^5)

Discount Rate: 2%

NPV = -£56,000 + (£-6,000 / (1+0.02)^1) + (£9,000 / (1+0.02)^2) + (£18,000 / (1+0.02)^3) + (£18,000 / (1+0.02)^4) + (£21,000 / (1+0.02)^5)

Discount Rate: 3%

NPV = -£56,000 + (£-6,000 / (1+0.03)^1) + (£9,000 / (1+0.03)^2) + (£18,000 / (1+0.03)^3) + (£18,000 / (1+0.03)^4) + (£21,000 / (1+0.03)^5)

Discount Rate: 4%

NPV = -£56,000 + (£-6,000 / (1+0.04)^1) + (£9,000 / (1+0.04)^2) + (£18,000 / (1+0.04)^3) + (£18,000 / (1+0.04)^4) + (£21,000 / (1+0.04)^5)

(iii) To graph the NPV for each interest rate, you would plot the discount rate on the x-axis and the corresponding NPV on the y-axis. Each discount rate would have a corresponding NPV value calculated using the formulas mentioned in part (ii).

(iv) To approximate the Internal Rate of Return (IRR) for the project, you would find the discount rate that makes the NPV equal to zero. In other words, you would calculate the discount rate at which the present value of the project's cash inflows equals the present value of its cash outflows.

The IRR is the rate at which the project breaks even. In this case, you can approximate the IRR by trial and error or by using software or financial calculators that can calculate the IRR directly based on the cash flow values provided.

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Related Questions

Need help
what did police find in Bidens home?

Answers

Answer:

Explanation:

The FBI spent more than 12 hours searching President Biden's Wilmington, Del., residence Friday, and found more classified documents.

Some of the items date back to Biden's time as a a senator, while others were from his time as vice president, said Biden's personal attorney, Bob Bauer, announced the extraordinary development in a Saturday night statement. The Justice Department also took some handwritten notes for further review, he said.

A spokesman for the U.S. attorney in Chicago, who is overseeing the investigation of the documents until special counsel Robert Hur is in place, confirmed the search, saying that the FBI had "executed a planned, consensual search" of Biden's home.

It's the latest in a series of disclosures that has raised questions about Biden's handling of classified material, and comes after the White House had said that searches of Biden's residence had been complete.

Biden says he has 'no regrets' on how he's handled classified documents discovery

POLITICS

Biden says he has 'no regrets' on how he's handled classified documents discovery

Biden has been defiant about the issue, telling reporters on Thursday that he has "no regrets" about how he and his team have handled the discovery and disclosure of the documents.

Answer: he fbi found classified documents

Explanation:

Firms with a limited advertising budget would leastlikely use ________ advertising.

Answers

The least probable users of Television advertising are businesses with limited advertising budgets.

A communication method for delivering moving pictures and sound is television, sometimes referred to as TV. The phrase can be used to describe a television set or the method of transmitting television. For entertainment, news, sports, and advertising, television is a popular medium.

Television became accessible in rough experimental forms in the late 1920s, but it wasn't until several years later that the new technology was introduced to customers. Following WWII, enhanced black-and-white television broadcasts became popular in the United Kingdom and the United States, and television sets were prevalent in households, companies, and organizations. In the 1950s it became a primary source of influencing public opinion.

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what are the sources of income of the government? where do these taxes go?

Answers

Answer:

The taxes go in the national income of country

wer saved ked out of lag stion Audit is often related to principal-agent relationship concept. Which of the following best describes the concept? Select one: a. The manager who owns the company needs the auditor to provide them with capital b.. The auditor gathers evidence to evaluate the fairness of managers financial report, where the manager is the agents to the shareholder of the company c. The auditor acts as the stakeholder and the manager is the owner of business O d. The principal in a company is the auditor and the manager is the stakeholders Clear my choice

Answers

The best option that describes the concept related to the principal-agent relationship in the audit is "The auditor gathers evidence to evaluate the fairness of managers' financial report, where the manager is the agents to the shareholder of the company." (option b).

In the world of finance, the principal-agent relationship is a recurring occurrence. The relationship between the principal and the agent is referred to as the principal-agent relationship. The agent is entrusted with making decisions on the principal's behalf. The principal-agent relationship, therefore, involves a degree of risk because the principal may be unable to ensure that the agent is acting in their best interests.In the context of the audit, the audit process includes examining the company's financial statements and issuing a report on their accuracy and fairness.

It is a common practice for a company's management to engage an independent auditor to review the financial statements to ensure that they are accurate and complete. In this case, the auditor is the principal, and the company's management is the agent. As a result, the auditor's role is to collect evidence to assess the accuracy of the management's financial statement. Hence, the best option that describes the concept related to the principal-agent relationship in the audit is "The auditor gathers evidence to evaluate the fairness of managers' financial report, where the manager is the agents to the shareholder of the company." The correct option is b.

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bueno is a company in mexico that produces t-shirts for domestic and international customers. bueno wants to use the well-known design of a popular disney character, mickey mouse, on its products. what advice would you give bueno?

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Mickey Mouse is a well-known Disney figure, and Bueno wants to incorporate his iconic design on its products. Obtaining a license agreement from Disney Inc. is the advice we would recommend to Bueno.

What is the vehicle that a license agreement serves?

A license arrangement can be a lucrative option for entrepreneurs who operate independently, are innovators, and many other types of business owners. Licensing is essentially a contract between you, the licensor, and a third party, the licensee, that grants them the right to market your product. A one-time payment or royalties for each item sold are given to you as remuneration.

A license agreement is a pact that a company enters into with the software's copyright holders to allow the latter to use the computer program for typical commercial operations.

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which trend has the following potential business impact? demand for personnel in distant countries will increase the need for foreign language training, employee incentives suited to other cultures, and many other aspects of performing business globally.

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The Correct answer is D. The time to get products and services to market is being shortened by technology. The global economy is becoming more integrated.

The worldwide economy can be defined as the sum of activities that take place both inside a rustic and between one-of-a-kind international locations. each u. s. a . is a separate unit, with its own industrial manufacturing, hard work marketplace, financial market, sources, and surroundings. Economists generally agree that monetary development and increase are stimulated through four factors: human resources, bodily capital, natural sources, and generation. fantastically advanced nations have governments that concentrate on these regions.

Ability blessings of globalization for the financial system include multiplied choice, higher pleasant products, expanded opposition, economies of scale, improved capital flows, multiplied labor mobility, and improved international relations. The global economy affects anyone in the international. It creates jobs and provides human beings with all of the assets they want.

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Complete Question:

Which trend has the following potential business impact? Demand for personnel in distant countries will increase the need for foreign language training, employee incentives suited to other cultures and many other aspects of performing business globally.

A) The growth in information industries is creating a knowledge-dependent global society

B) Pace of technological innovation is increasing

C) The economy and society are dominated by technology

D) The global economy is becoming more integrated

If a stock has a beta of 4, what can one infer about the expectations of that stock relative to the market?.

Answers

What happens if the beta of a stock is 1?

If a stock has a beta of 1, it will move in the same direction as the index, by about the same amount. An index fund that mirrors the S&P 500 will have a beta close to 1.

Which one is the best choice. Please explain why. I’ll give extra points.

Which one is the best choice. Please explain why. Ill give extra points.

Answers

Answer:

10

Explanation:

Surplus for Donovan: 10 - 4.50 = 5.50

Surplus for Rudy: 8 - 4.50 = 3.50

Surplus for Mike: 6 - 4.50 = 1.50

Surplus for Royce: 4 - 4.50 = -0.50

Sum of all surpluses: 5.50+3.50+1.50-0.50=10

Which of the following is not a business-to-business (B2B) market.

A. Raw Materials
B. Process materials
C. Major equipment
D. Shopping Goods

Answers

Answer:

I don't know the exact answer but I guess it will be option (B) process materials

The total length of your apartment is 30 feet and the total width is 20 feet. What is the total area of the apartment?

Answers

Answer:

The answer should be 600

Explanation:

30x20=600

A broker followed the instructions in an escrow disbursement order. However, one of the parties to the contract sued the broker and a judgment was filed against the broker that resulted in $8,000 in money damages plus $3,500 in court costs. The broker incurred $4,500 in attorney's fees associated with his defense. The FREC is authorized to disburse what amount associated with this case

Answers

The amount that should be associated with the given case is $16,000.

The computation is as follows:

= Money damages + cost of the court + attorney fees associated

= $8,000 + $3,500 + $,4500

= $16,000

In order to determine the value i.e. associated we add the above 3 items.

Therefore we can conclude that The amount that should be associated with the given case is $16,000.

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Accounts receivable arising from sales to customers amounted to $120,000 and $105,000 at the beginning and end of the year, respectively. Net income reported on the income statement for the year was $457,000. Exclusive of the effect of other adjustments, the cash flows from operating activities to be reported on the statement of cash flows is

Answers

Answer:

Cash flow from operating activities $472,000

Explanation:

The computation of the cash flows from operating activities to be reported on the statement of cash flows is given below:

Beginning account receivable $120,000

Add: net income $457,000

less: ending account receivable -$105,000

Cash flow from operating activities $472,000

Who seeks out information about products a seller has to offer

Answers

Answer:

the owner of the product or the boss

ACTIVITY 2.
Identify and explain briefly the question below
1 What are the 4P's in marketing plan?Explain each
А__________
B__________
С__________
D__________​

Answers

Answer:

A. Product

B. Price.

C. Place.

D. Promotion.

Explanation:

Marketing plan can be defined as the choices about product attributes, pricing, distribution, and communication strategy that a company blends and offer its targeted markets (customers) so as to build and maintain a desired response.

Generally, a marketing plan is made up of the four (4) Ps and these includes;

1. Products: this is typically the goods and services that gives satisfaction to the customer's needs and wants. They are either tangible or intangible items.

2. Price: this represents the amount of money a customer buying goods and services are willing to pay for it.

3. Place: this represents the areas of distribution of these goods and services for easier access by the potential customers.

4. Promotions: for a good sales record or in order to increase the number of people buying a product and taking services, it is very important to have a good marketing communication such as advertising, sales promotion, direct marketing etc.

True or false: Corporate Social Responsibility (CSR) and corporate profits can at times go hand in hand.
True false question.
True
False

Answers

Answer:

TRUE

Explanation:

I think that answer

Distinguish between Private and Public Company???​

Answers

Answer:

A Public Company is owned and traded publicly on the stock exchange. A Private Company is owned and traded privately. Limited can use after the public company name (Example- ABC Limited). Private Limited can be used after the private company name.

Distinguish between Private and Public Company???

Answer:

A public company is a company that is listed in the well-known stock exchange and can be traded freely. Where a private limited company is not listed on a stock exchange and it is held privately by the member of the company

Kavya unnie it's me Lilli please mark me as brainliest please

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which term refers to benefits that can be accepted or declined by the employee?

Answers

The term that refers to benefits that can be accepted or declined by the employee is known as "optional benefits" or "voluntary benefits."

Optional benefits are designed to provide employees with additional perks and flexibility tailored to their individual needs. Examples of optional benefits include supplemental health insurance, dental and vision coverage, life insurance, disability insurance, wellness programs, flexible spending accounts, and employee assistance programs. Employees have the freedom to decide whether they want to enroll in these programs or decline them based on their personal circumstances and preferences.

Overall, optional benefits offer employees the opportunity to customize their benefits package to better align with their unique needs and priorities. By providing a range of voluntary benefits, employers aim to enhance employee satisfaction and engagement while promoting a sense of empowerment and choice in the workplace.

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What is the difference between a multinational corporation (MNC) and an international business? A. The international business has been in existence longer than the multi-national firm B. There is no difference C. The international business has sites in a larger number of countries. D. For the multinational firm, the business done outside the country is especially significant

Answers

As a result, D is the best option. The key contrast between an MNC and an international organization is that an MNC conducts a significant portion of its operations outside of its home country.

In general, international business involves both domestic and foreign countries.

A. This is an incorrect statement because there is no guarantee that either type of firm will continue to exist. Option A is the incorrect choice due to this erroneous difference.

B. This statement is incorrect since multinational corporations and global enterprises are not the same things. There are various distinctions between them. As a result, option B is inappropriate.

C. Option C is false because both types of organizations have a global reach and locations in multiple countries. This option is erroneous because it represents an invalid difference.

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What is the biggest financial worry of most individuals and what can they do about it

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Biggest financial worry would differ from person to person, from time to time, and from age to age. A 13 year old might be more worried about where to spend his money while a 31 year old would be more worried about how much he can save.

General financial worries include: how to pay off debt, how to save money for college and school, how to invest money and where.

The solution would be to save money instead of having to take a loan from the bank, which will increase your debt. With proper planning one can avoid debt, if they plan for the future. Investment is something that should be studied and people would need to educate themselves about the market and investing. To save money for college and school, again proper financial planning is required and timely planning as well. One should plan years and months ahead of time when it comes to finance so that they don’t have to suffer from issues like debt and school or college fees.

Users of managerial accounting information include ______. (select all that apply) multiple select question. department managers potential investors internal revenue service the chief financial officer

Answers

The user of managerial accounting information includes:

department managersthe chief financial officer

What is managerial accounting information?

Managerial accounting information can be defined as the gathered information which managers use during decision making process.

The users of this information are department manager and the chief financial officer.

Therefore the correct option is A, D.

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outline 2 advantages to H&H of using secondary market research​

Answers

Answer:

Explanation:
It provides quick information and factual background perspectives
It is less expensive and affordable

A dividend yield of 10% says that, for each dollar we invest, we get _____cents in dividends.

Answers

A dividend yield of 10% says that, for each dollar we invest, we get  $100 cents in dividends.

When investing in stocks, one of the ways to earn a return on your investment is through dividends. A dividend is a portion of a company's profits that is paid out to its shareholders. The dividend yield is a measure of how much a company pays out in dividends relative to its stock price. In this response, we will explain how to calculate the amount of dividends you can expect to receive based on a given dividend yield.

Detailed explanation:

The dividend yield is expressed as a percentage and is calculated by dividing the annual dividend paid per share by the current market price per share. For example, if a company pays an annual dividend of $1 per share and its current stock price is $10 per share, the dividend yield would be 10% ($1 ÷ $10).

To calculate the amount of dividends you can expect to receive based on a given dividend yield, you need to know how much money you are planning to invest. Let's say you plan to invest $1,000 in a company with a dividend yield of 10%. To calculate how much you can expect to receive in dividends, you would follow these steps:

Convert the dividend yield from a percentage to a decimal by dividing by 100. In this case, the dividend yield is 10%, so the decimal equivalent is 0.10.

Multiply the amount you plan to invest by the decimal equivalent of the dividend yield. In this case, $1,000 x 0.10 = $100.

Therefore, if you invest $1,000 in a company with a dividend yield of 10%, you can expect to receive $100 in dividends.

It's important to note that dividend yields can change over time based on a variety of factors, including changes in a company's profits and changes in its stock price. Additionally, not all companies pay dividends, and some may pay a lower or higher dividend yield than others. When making investment decisions, it's important to consider all of these factors and to do thorough research before investing in any company.

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All of the following are true for those who are not responsible with credit EXCEPT which one?

A: They have a higher balance that is carried over month to month
B: They charge fewer items or make the full payment each month
C: They charge more items, even if they cant pay the entire amount
D: They end up paying more in interest fees

Answers

All of the following are true for those who are not responsible with credit EXCEPT  They charge fewer items or make the full payment each month.

What is meant by credit?

This is the term that is used to refer to the fact that a person is able to get a way of paying for the goods and services that they make use of through the use of credit card that is issued to them by a credit facility.

The issue here is that the people that have a bad credit would have to be paying more in fees at the end of the day because it would keep piling. They would also have greater credit balance that they are to pay as well.

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When using the PACED decision making model you should choose the alternative with the highest .........

Answers

Answer:

net value

Explanation:

When using the PACED decision making model you should choose the alternative with the highest net value.

What is PACED?

PACED decision making model can be defined as the model that is use during decision making process and it help to resolve issues or Problem.

PACED stands for the following:

P=Problem

A=Alternatives

C=Criteria

E=Evaluate

D=Decide

Therefore when using the PACED decision making model you should choose the alternative with the highest net value.

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In the cpi, goods and services are weighted according to.

Answers

Answer:

A consumer price index (CPI) is usually calculated as a weighted average of the price change of the goods and services covered by the index.

Explanation:

The weights are meant to reflect the relative importance of the goods and services measured by their shares in total consumption of household.

According to the eTextbook, which of the following abbreviations is NOT paired with the correct term? Group of answer choices 3PL - Third party logistics firm TEU - twenty-foot equivalent unit OWMM - one worker multiple machines DC - distribution center FTZ - free trade zone TL - truck load CL - container load LTL - large truck load TOFC - trailer on a flatcar GT Cell - group technology cell

Answers

The abbreviation NOT paired with the correct term is OWMM. According to the eTextbook, the abbreviation NOT paired with the correct term is OWMM.

The abbreviation "OWMM" stands for One Worker Multiple Machines, and it refers to a system in which one operator operates and supervises more than one machine at the same time.

Therefore, it is incorrect to associate the abbreviation "OWMM" with the supply chain management.

Instead, it is primarily used in the context of manufacturing, where it refers to the organization of work on the shop floor.

The other abbreviations are correctly paired with their respective terms:

3PL - Third party logistics firmTEU - twenty-foot equivalent unitDC - Distribution centerFTZ - Free trade zoneTL - Truck loadCL - Container loadLTL - Less than truckloadTOFC - Trailer on a flatcarGT Cell - Group technology cell.

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In order to reduce the possibility that a technological paradigm shift will render your skills obsolete, you should
a. Encourage others to keep their skill sets current
b. Try to keep your company from adopting new technology
C. Keep tabs on the newest technical advances
d. Adopt a technology proof career, like carpentry

Answers

Answer:

a. Encourage others to keep their skill sets current

b. Try to keep your company from adopting new technology

Explanation:

Continuous updating and upgrading one's skills is a sure way of remaining relevant in a rapidly changing work environment. Many organizations are always seeking ways of modernizing their work processes. As companies adopt technology to enjoy increased efficiency, workers without matching skills are declared redundant.

Continuous training and learning are necessary to reduce the possibility of one's skill being declared obsolete. To survive in the new technology era, a worker and his colleagues can embrace and learn to work with new technology or work hard to prevent their company from acquiring it.

Answer:

c.

Keep tabs on the newest technical advances

Explanation: CORRECT ON EDGE 2021

Question 1 of 10
What is one strategy that can help a borrower reduce the cost of an auto
loan?
A. The borrower can make only the minimum payment each month.
B. The borrower can lengthen the term of the loan.
C. The borrower can increase the amount of the principal.
D. The borrower can make a higher down payment.
SUBMIT

Answers

The correct answer is D. The borrower can make a higher down payment.

What takes place while you make a higher down fee?

A bigger down charge will come up with a lower mortgage-to-fee ratio, or LTV. This key measure makes you much less unstable to creditors, may additionally qualify you for decreased interest rates, and can assist you avoid costs, including private loan coverage.

How might a larger down price be beneficial to debtors?

A larger down payment facilitates you to minimize borrowing. The more you pay upfront, the smaller your mortgage. meaning you pay less in overall interest expenses over the existence of the loan, and you additionally benefit from decreased month-to-month payments.

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what is the difference between product value and unique selling proposition?​

Answers

Answer:

USPs and value propositions often get confused

there under two different umbrella .

Keep in mind that your USP doesn’t have to revolve around a product detail (such as quality, features, or price). It can also call attention to a unique aspect of your business more broadly speaking (service, selection, speed, convenience, dependability, guarantees, customization, philanthropy, and so on).

Value propositions are longer statements than USPs because they express the tangible results or concrete outcomes (“benefits”) a customer experiences from using a company’s products or services. They serve to convince your target market they’ll get “value for their money” by describing exactly what that value is. 

Martha recently booked a trip with Wanderlust Tours and was impressed by the seamless research and booking process. In order to create this seamless experience, Wanderlust Tours invested in which key areas of effective omnichannel retailing

Answers

To create the perfect experience, Wanderlust Tours invested in the key omni-channel retail areas of infrastructure, process, and people, which aided in Martha's positive experience booking a trip with the company.

Adequate infrastructure is essential for organizational processes to be carried out effectively, with greater agility, reducing failures and optimizing time.

The organized and structured process will also help to provide a quality service, dynamic and with reduced bureaucracy.

The last key area of ​​ominichannel retailing that also contributes to the quality and efficiency of the service are the people, who must be trained and qualified to provide a cordial and available service that solves doubts and meets the customer's needs.

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