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11 months ago

Two methods of capital investment analysis that incorporate the time value of money are:______.

1 answer:

5 0

Two methods of capital investment analysis that incorporate the time value of money are -Net Present Value and Discounted Cash Flow

1- Net Present Value

Net Present Value reduces the expected future cash flows by a specific rate to arrive at their value in today's terms. After subtracting the initial investment cost from the present value of the expected cash flows, it can be determined whether the project is worth pursuing. If the NPV is a positive number, it means it's worth pursuing while a negative NPV means the future cash flows aren't generating enough return to be worth it and cover the initial investment.

2- Discounted Cash Flow

With DCF analysis, the discount rate is typically the rate of return that's considered risk-free and represents the alternative investment of the project. The present value is the value of the expected cash flows in today's dollars by discounting or subtracting the discount rate. If the result or present value of the cash flows is greater than the rate of return from the discount rate, the investment is worth pursuing.

To learn more about Net Present Value and Discounted Cash Flow here

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Based on the constant demand assumption in the economic order quantity (EOQ) model, the average cycle inventory is: Question 20

irina [24]

Answer:

c. half of the order quantity

Explanation:

Based on the constant demand assumption in the economic order quantity (EOQ) model, the average cycle inventory is half of the order quantity

Economic order quantity is a quantity which minimizes the ordering cost and holding cost

Q = EOQ = $\sqrt{2*D*S/ H}$ where D = Demand unit, S = Order cost and H = Holding cost

- Ordering cost and the Holding at EOQ will be same

- Average inventory = Q/2

- Average inventory is the half of the order quantity.

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2 years ago

Suppose for a given consumer the marginal utility (MU) of a pizza is 100 utils and the MU of a hamburger is 80 utils, and that t

NemiM [27]

Answer:

is not , consume more of hamburgers

Explanation:

A consumer is said to have achieved equilibrium when within his budget constraint, he purchases that combination of two goods which yield maximum satisfaction to him.

The equation for consumer equilibrium for two products is given by

$\frac{MU_{x} }{P_{x} } = \frac{MU_{y} }{P_{y} }$

In the given case, $\frac{MU_{x} }{P_{x} }$ = $\frac{100}{15}$ = $\frac{20}{3}$ = 6.666

$\frac{MU_{y} }{P_{y} }$ = $\frac{80}{10}$ = 8

wherein, x= pizza

y= hamburger

As is evident, the marginal utility per dollar spent is greater in case of a hamburger, the consumer is not in a state of equilibrium.

Thus, he should consume more units of Hamburgers in order to maximize his utility.

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2 years ago

Sales tax is calculated A. based on the number of items purchased. B. using a percentage of the price of an item. C. before a sa

Lelechka [254]

Answer:

B. using a percentage of the price of an item

Explanation:

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2 years ago

The chance of receiving an actual return that differs from the one that is expected is called _____.

Juliette [100K]

The answer in the space provided is risk. The risk that is received is considered by variability that may vary from a negative outcome or positive outcome in which are being assessed and are being evaluated in order to know them.

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2 years ago

A textbook publisher produces a textbook for $25 per book and sells a lot of 160 to the Campus Bookstore for $50 per unit. The b

Dmitry_Shevchenko [17]

Answer:

$4,000

Explanation:

The net profit of the publisher over the useful life of the 160-unit lot of textbooks is the difference between his selling price to the bookstore and the cost incurred multiplied by the number of unit.

Hence the net profit of the publisher

= 160( $50 - $25)

= 160 * $25

= $4,000

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2 years ago