Exercise 10-10A (Algo) Using the internal rate of return to compare investment opportunities LO 10-3 Velma and Keota (V&K) is a partnership that owns a small company. It is considering two alternative investment opportunities. The first Investment opportunity will have a three-year useful life will cost $6,328.24, and will generate expected cash inflows of $2,500 per year. The second investment is expected to have a useful life of four years, will cost $11,072.11, and will generate expected cash inflows of $3,800 per year Assume that V&K has the funds available to accept only one of the opportunities. (PV of $1 and PVA of S1) (Use appropriate factor(s) from the tables provided.) Required a. Calculate the internal rate of return of each investment opportunity. (Do not round intermediate calculations.) b. Based on the Internal rates of return, which opportunity should V&K select? a. First investment Second investment b. V&K should select the Internal Rate of Return % %

Answers

Answer 1

Based on the internal rates of return, V&K should select the first investment opportunity, which has a higher IRR of 14.18% compared to 13.23% for the second investment opportunity.

For the first investment opportunity:

Initial investment = $6,328.24

Cash inflows for each of the three years = $2,500

Using a financial calculator or spreadsheet, the internal rate of return (IRR) can be calculated as 14.18%.

The internal rate of return (IRR) is a financial metric used to evaluate the attractiveness of an investment opportunity or a project. It is the rate at which the present value of cash inflows from the investment equals the present value of cash outflows (initial investment). In other words, it is the discount rate that makes the net present value (NPV) of an investment equal to zero.

For the second investment opportunity:

Initial investment = $11,072.11

Cash inflows for each of the four years = $3,800

Using a financial calculator or spreadsheet, the internal rate of return (IRR) can be calculated as 13.23%.

Based on the internal rates of return, V&K should select the first investment opportunity, which has a higher IRR of 14.18% compared to 13.23% for the second investment opportunity.

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Related Questions

You invest $500 in a fund that has shown to have a mean annual increase of $120 per year. If you leave your initial
investment in the account, and invest no additional funds, how much will your account be worth at the end of 25 years?

a) $1,200
b) $2,500
c) $3,500
d) $3,800

Answers

It is letter C because 120x25=3000+500=3,500

The investment of $500 in a fund, the account at the end of 25 years would be $3,500. The appropriate response is option C.

What is investment?

A purchase made with the intention of creating income or capital growth is known as an investment. An asset's value increasing over time is referred to as appreciation. When a person makes an investment, they do not intend to utilize the product immediately; instead, they intend to use it to build wealth in the future.

Stocks, bonds, and cash equivalents are the three main categories into which investments are often divided. Within each category, there are several distinct kinds of investments.

The investment of $500 in a fund, the account at the end of 25 years-

120x25=3000+500=3,500

Hence, option C is an appropriate response.

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What is the answer?? I need help

Answers

Economic classes

Explanation:

they are all fit within the category about what the main question is

Which of the following combinations is assured to decrease the interest rate sensitivity of a bond?
A. A decrease in the time to maturity and an increase in the face value
B. Increase in both the time to maturity and the coupon rate
C. Increase in the time to maturity and a decrease in the coupon rate
D. Decrease in both the time to maturity and the coupon rate
E. Decrease in the time to maturity and an increase in the coupon rate

Answers

The combination that is assured to decrease the interest rate sensitivity of a bond is **A. A decrease in the time to maturity and an increase in the face value.**

The interest rate sensitivity of a bond is largely determined by two factors: the time to maturity and the coupon rate. Bonds with longer maturities and lower coupon rates are generally more sensitive to changes in interest rates, as they are exposed to interest rate risk for a longer period of time. Conversely, bonds with shorter maturities and higher coupon rates are less sensitive to changes in interest rates, as they are exposed to interest rate risk for a shorter period of time. Option A suggests decreasing the time to maturity and increasing the face value of a bond. Both of these changes would decrease the bond's interest rate sensitivity. A decrease in the time to maturity would mean that the bond is exposed to interest rate risk for a shorter period of time, while an increase in the face value would mean that the bond's coupon payments are spread out over a larger principal amount, resulting in a lower coupon rate. Options B and C both involve increasing either the time to maturity or the coupon rate, which would increase the bond's interest rate sensitivity. Option D suggests decreasing both the time to maturity and the coupon rate, which could result in a decrease in interest rate sensitivity, but it is not assured. Option E suggests decreasing the time to maturity and increasing the coupon rate, which would have a mixed effect on interest rate sensitivity and is not assured to decrease it.

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How does an improvement in productivity affect a business's profit margin?
A. It increases the profit margin by lowering costs.
B. It decreases the profit margin by lowering costs.
C. It decreases the profit margin by raising costs.
D. It increases the profit margin by raising costs.

Answers

Answer:

it increases the profit margin by lowering costs

Explanation:

An improvement in productivity affects a business's profit margin as it increases the profit margin by lowering costs. Thus, option A is correct.

What is the profit margin?

Profitability is gauged by profit margin. Estimating the profit as a proportion of revenue is used to calculate it. Gross profit margin, operating profit margin, and net profit margin are the three different forms of profit margins. Gross profit is multiplied by net sales to determine the gross profit margin.

A company may produce more goods without increasing expenses by boosting productivity. Producing more opens up the possibility of increasing sales, which in turn might boost earnings. In addition to improving overall earnings, higher productivity can raise a company's profit margin.

The profit margin of a company is impacted by an increase in productivity since it lowers expenses and raises the profit margin. Therefore, choice A is correct.

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1.
In 2016, a market had sales of £350.000. In 2017, the market grew by 5%.
Calculate the new market size in sales value.

Answers

Answer:

The new market size in sales value is 367,500

Explanation:

Answer:

£367,500

Explanation:

the market was £350,000 in 2016.

in 2017, the market grew by 5%.

the new market size will 5% more than 2016.

if 2016 was 100%, 2017 will be 105%

2017 = 105% x £350,000

=105/100 x £350,000

=1.05 x £350,000

=£367,500

What do you mean by a facilitator? What are the major jobs of a facilitator of non formal educational programme

Answers

Explanation:

It is important to note that much of the intermittent formal learning throughout people's....Part of being an effective facilitator of informal learning ( and non-formal education) involves.

Answer:

The definition of facilitate is "to make easy" or "ease a process." What a facilitator does is plan, guide and manage a group event to ensure that the group's objectives are met effectively, with clear thinking, good participation and full buy-in from everyone who is involved.

For each of the following situations specify the state transition for a process in a process life cycle and the event that causes transition: 1. Time quantum of a process is up while executing in a round Robin scheduling system 2. Process encounters a scanf() 3. Program a.out is launched on the terminal

Answers

The following are the state transitions for each of the given situations in the process life cycle, and the events that cause them:

1. Time quantum of a process is up while executing in a round Robin scheduling system: The state transition that occurs when the time quantum of a process is up is from the Running state to the Ready state. This happens because the process no longer has the CPU and is now waiting in the ready queue for its next turn to execute. This is caused by the scheduler interrupting the process after its time quantum has expired.

2. Process encounters a scanf(): The state transition that occurs when a process encounters a scanf() is from the Running state to the Blocked state. This happens because the process is waiting for user input and cannot proceed until it is received. This is caused by the system waiting for user input from the terminal or console.

3. Program a out is launched on the terminal: The state transition that occurs when a program a.out is launched on the terminal is from the New state to the Ready state. This happens because the process has been loaded into memory and is now ready to be executed. This is caused by the user issuing a command to run the program from the command line or shell.

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Use the drop-down menus and your knowledge of prefixes to choose the correct word for each sentence.

I love being outdoors, so a day at the movies is
for me.

Plants that
desirable traits tend to live longer than those that do not.

The situation was unpleasant, and I did not know how to
myself from it.

Answers

The correct prefixes are:

AtypicalExhibitExtricate

What is a Prefix?

This refers to the addition of a word at the beginning in order to change the meaning from the root word.

Hence, we can see that based on the complete question, there is the use of words like "typical", etc and to use the correct prefixes, one would have to change them to the above to make sense.

Answers

The first step should making sure such child receives proper medical attention. When he is well, we can have a conversation with the neighbor to prevent it from happening again..

What should be done in the event?

It is very important to prioritize the child's health in this situation and once the medical attention has been sought, we can have a calm and respectful conversation with the child's parent to discuss the incident for future interactions.

One can also review any legal liabilities or insurance policies that could be involved. So, by taking proactive steps to prevent similar incidents in the future can help maintain positive relationships with neighbors while ensuring everyone's safety.

Answers

I’m pretty sure it’s C

What is one benefit of purchasing saving bonds saving bonds are purchased from the government and guaranteed to increase in value?

Answers

you can postpone paying federal taxes on the interest until you redeem the bond or it matures. savings bonds are utilized for qualified educational expenses, tax benefits are accessible to eligible taxpayers.

The amount of interest that is due each period and is expressed as a percentage of the amount lent, deposited, or borrowed is known as the interest rate. The total amount of interest charged on a sum lent or borrowed depends on the principal amount, interest rate, frequency of compounding, and length of the loan, deposit, or borrowing. The interest rate that is determined over a year is the annual interest rate. According to one definition, the interest rate "measures the preference for a dollar of present income over a dollar of future revenue." The loan recipient is ready to repay the debt.

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Please help in this question asap

Answers

Answer:

All of these

Explanation:

do I need to explain lol?? :]

The correct answer is D, all of these.

What happens to the equilibrium price and quantity when demand decreases and at the same time supply increases, but the demand shift is relatively larger than the supply shift? a.Both the equilibrium price and the equilibrium quantity will rise. b.The equilibrium price falls, and the equilibrium quantity rises. c.The equilibrium price rises, and the equilibrium quantity falls. d.Both the equilibrium price and quantity will fall.
Previous question
Nex

Answers

Less demand will result in a drop in the equilibrium price and a reduction in supply. With everything else remaining constant, an increase in supply will result in a decrease in the equilibrium price and an increase in the amount required.

A company produces 1,000 spinners and sells them for $10. However, no one wants to buy them at that price. To increase sales, the retailer lowers the price to $8. 250 customers are willing to pay this price. Equilibrium refers to a standard state. Obviously, both buyers and sellers are in a position where the equilibrium price does not change. Theoretically, the equilibrium price obtained when the quantity demanded by consumers and the quantity supplied by producers is the same is the only price at which the plans of the consumer and the producer coincide. This common quantity is called the equilibrium quantity.

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What+is+the+value+of+a+perpetual+bond+with+a+par+value+of+$1,000+and+a+coupon+rate+of+9%+(semiannual+coupon)?+the+bond+has+a+yield+to+maturity+of+6.40%.+group+of+answer+choices

Answers

The value of a perpetual bond with a par value of $1,000 and a semiannual coupon rate of 9% at a yield to maturity of 6.40% is approximately $1,116.67.

To calculate the value of a perpetual bond, we need to use the formula for the present value of a perpetuity. The present value of a perpetuity is equal to the annual coupon payment divided by the yield to maturity. In this case, the annual coupon payment is $1,000 * 9% = $90. Since the coupon is paid semiannually, the semiannual coupon payment is $90 / 2 = $45. The yield to maturity is 6.40%, which can be converted to a semiannual yield of 6.40% / 2 = 3.20%. Therefore, the value of the perpetual bond can be calculated as $45 / 3.20% = $1,406.25. However, since the bond has a par value of $1,000, we need to discount the value by the perpetuity factor of $1,000 / $1,406.25 = 0.7107. Therefore, the value of the perpetual bond is approximately $1,406.25 * 0.7107 = $1,116.67.

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the current gdp for country a is $685. if the annual growth rate is 2%, what will the gdp be in 10 years? round your answer to the nearest whole number.

Answers

The GDP of Country A in 10 years will be approximately $812.

To calculate the GDP after 10 years if the current GDP for Country A is $685 and the annual growth rate is 2%, we can use the formula below:

GDP after 10 years = Current GDP x $(1 + growth rate)^n$

where n is the number of years

To find the GDP after 10 years, we substitute the given values into the formula:

GDP after 10 years = $685 x $(1 + 0.02)^{10}$

Using a calculator,

we get:

$685 x $(1.02)^{10}$ = $812.14 (rounded to the nearest whole number)

Therefore, the GDP of Country A in 10 years will be approximately $812.

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HURRYY
Borrowing money to pursue an advanced degree makes sense if
a. You can earn a scholarship to pay for your educational costs
b. Your future earnings potential outweighs the debt you may accrue
C. You already have the financing to pay out of pocket
d. Your employer is willing to pay for your tuition

Answers

Answer:

b. Your future earnings potential outweighs the debt you may accrue

Explanation:

Consider taking the loan to finance the advanced degree as an investment project. The project can is beneficial to the owner if the projected future income outweighs the cost of investments. A project makes sense if it generates profits.

Borrowing money to pay for the advanced degree will make sense if potential future earnings exceed the debts incurred.

Answer:

Explanation:

Presence of the contamination Fusarium results in what unpleasant consequence?

Answers

The presence of the contamination Fusarium in food can result in several unpleasant consequences, depending on the type of food and the strain of the fungus.

Fusarium is a type of mold that can produce mycotoxins, which are toxic compounds that can cause health problems if ingested in large amounts. Some strains of Fusarium can produce mycotoxins that are harmful to humans and animals, including fumonisins, trichothecenes, and zearalenone.

Fumonisins, for example, can cause cancer and other health problems in humans and animals, while trichothecenes can cause vomiting, diarrhea, and other digestive problems. Zearalenone can cause reproductive problems in animals and has estrogenic effects, which can lead to infertility, miscarriage, and other health problems.

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Cindy has been working for 8 years, and she’s built up a huge emergency fund -- $45,000, which would be 6 months of her salary. She’s hoping to earn a bit more interest than she currently is with that $45,000 just sitting in her traditional bank’s savings account. Which account would you recommend? Why?

SAVINGS ACCOUNT, CD, MONEY MARKET ACCOUNT

Answers

I will recommend she invest the $45,000 in Certificate of deposit or Money market account.

It is widely known that a traditional bank’s savings account does not provides significant interest rate for deposit unlike other account which are meant from pure investment at long term.

A certificate of deposit are issued by bank to customer promising them a certain interest rate on their deposit with them.

A money market is also an method of investing in short term market and guarantees high interest rate on deposit.

Therefore, I will recommend she invest the $45,000 in Certificate of deposit or Money market account.

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I don't have moey. What is the best job to get when you're in middle school?

Answers

Answer:

You can work at publix as a cashier. They acept 14 year olds. And ur in 8th grade as 14 which is in middle school.

Explanation:

This is the best job u can get as a kid

also brainlist me pls

You can make a lot of money by selling this in your house on Craigslist or eBay. Also if you know a lot of people you can sell snacks at school that’s what I did in 6th grade and I make like $50 a day

Describe an ethical dilemma related to employee relations.

Answers

An ethical dilemma or ethical paradox is a decision-making problem between two possible moral imperatives, neither of which is unambiguously acceptable or preferable. The complexity arises out of the situational conflict in which obeying would result in transgressing another.

How do you calculated ending equity value ("E")?

Answers

Ending equity value (E) is calculated by adding the value of the company's assets to the total amount of capital invested by shareholders.

The liabilities of the corporation, which consist of all existing loans and other obligations, are then calculated by deducting this value.

The final equity value of the corporation is the outcome of this calculation. The closing equity value, which reflects the capital that the shareholders have contributed to the business, is a crucial indicator of the company's financial health.

As the beginning point for gauging the company's performance over time, it also serves as a baseline for upcoming investments.

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A municipality has a tax rate of 12 mills. a piece of real property in the municipality is assessed at $225,000 and has a fair market value of $250,000. the annual tax liability on the property is?

Answers

A municipality charges 12 mills in taxes. The assessed valuation of a piece of real estate in the municipality is $225,000, but its fair market value is $250,000. The property has an annual tax obligation of $2700.

What is meant by tax liability?

The sum of money owed to the Internal Revenue Service (IRS) at the conclusion of each tax year is referred to as "tax liability." By pursuing deductions and adjusting their filing approach, many Americans set the objective of lowering their tax obligation.

Tax liability is the total amount of tax that people and companies owe to the federal, state, and local governments in a specific time frame. Tax liabilities are short-term obligations for firms that are listed on a balance sheet and paid off within a year.

One mill = 0.001

12 mills = 0.012

Taxes are based on assessed valuation, not fair market value.

0.012 $*$ $225,000 = $2,700.

Another way to think about it is that 1 mill = $1 of tax for each $1,000 of assessed value.

The complete question is:

A municipality has a tax rate of 12 mills. A piece of real property in the municipality is assessed at $225,000 and has a fair market value of $250,000. The annual tax liability on the property is:

A. $120

B. $300

C. $2,700

D. $3,000

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Activity rates and product costs using activity-based costing
Lonsdale Inc. manufactures entry and dining room lighting fixtures. Five activities are used in manufacturing the fixtures. These activities and their associated budgeted activity costs and activity bases are as follows:
Activity Budgeted
Activity Cost
Activity Base
Casting $475,000 Machine hours
Assembly 128,000 Direct labor hours
Inspecting 33,250 Number of inspections
Setup 43,650 Number of setups
Materials handling 22,950 Number of loads
Corporate records were obtained to estimate the amount of activity to be used by the two products. The estimated activity-base usage quantities and units produced follow:
Activity Base Entry Dining Total
Machine hours 6,000 13,000 19,000
Direct labor hours 4,800 3,200 8,000
Number of inspections 200 750 950
Number of setups 270 180 450
Number of loads 640 210 850
Units produced 2,200 3,800 6,000
This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the questions below.
Open spreadsheet
Determine the activity rate for each activity. If required, round the rate to the nearest dollar.
Activity Activity Rate
Casting $ per machine hour
Assembly $ per direct labor hour
Inspecting $ per inspection
Setup $ per setup
Materials handling $ per load
Use the activity rates in (a) to determine the total and per-unit activity costs associated with each product. Round the per unit rates to the nearest cent.
Product Total Activity Cost Activity Cost Per Unit
Entry Lighting Fixtures $ $
Dining Room Lighting Fixtures $ $

Answers

The Activity rate for each activity are: Casting $25 per machine hour, Assembly $16 per direct labor hours, Inspecting $35 per inspection, Setup $97 per setup, Materials Handling $27 per load.

Activity rate for each activity

a. Activity rate for each activity

Casting: