Daniel is interested in entering the orange farming business. He estimates if he enters this business, his fixed costs would be P50,000 per year and his variable costs would equal 40 percent of sales. If each orange sells for P2, how many oranges would Daniel need to sell to generate a profit that is equal to 10 percent of sales? *
Q: The nihilist Nikita is setting up a recording studio which will have an annual revenue of $80,000…
A:
Q: Elon works for a consultancy and currently has a wage of 500,000 kronor per year. He considers two…
A: Opportunity cost is the cost of next best alternative sacrificed for obtaining current alternative.
Q: You are preparing to produce some goods for sale. You will sell them in one year and you will incur…
A: Net present value is difference between cash flow and initial cost.
Q: You own a 10-acre vineyard and earn income by selling your grapes to wineries. Your vineyard is…
A: Calculate the incremental cash flows as follows: Formulas:
Q: monthly nominal rate of return must his investment earn for him to achieve his goal? 2. If the…
A: Present value refers to the value present today of the future stream of payments based on the…
Q: The nihilist Jokubas is setting up a recording studio which will have an annual revenue of $80,000…
A: The NPV is the present value of benefits less the initial costs.
Q: Phil has two periods of work remaining prior to retirement. He is currently employed in a firm that…
A: In this question, Phil considers variety of options, to make the problem solving simple, first we…
Q: If Edward wants to earn 215,000 within the next 20 years and the salaries grow at 4.15% per year,…
A: I/Y = rate = 4.15% NPER = Number of periods = 20 FV = Future value = $215,000 PV = Present value = ?
Q: KNS estimates that if he purchases the new equipment and lowers his price to P44.55 per item, his…
A: The capital budgeting decisions refer to the making investment in the capital projects such as…
Q: Jamie is considering leaving her current job, which pays $75,000 per year, to start a new company…
A: Opportunity cost is known as that cost which a person or a company has forgone by choosing another…
Q: Farmer Jayne decides to hedge 10,000 bushels of corn by purchasing put options with a strike price…
A: Put options are type of option contract where buyer of put option has the right to sell an…
Q: how many oranges would Daniel need to sell to generate a profit that is equal to 10 percent of…
A: Let us assume that sales = 'x'. Then profit = 0.1x (x*10%) Variable cost = 0.4x (x*40%) Profit =…
Q: An Automobile owner is concerned about the increasing cost of gasoline. He feels that the cost of…
A: Statement for Computation of Present Worth for next $ Year Rate per liter (cents) Consumption (In…
Q: Some studies have shown that taller men tend to earn higher salaries than equally qualified men of…
A: Formula for calculating the future worth is: F=A1+in-1iwhere, A=annual paymentn=no. of…
Q: Ronda wants to buy a new house. She makes S200,000 per year at her job and can put S70.000 a year…
A: Return on investment or ROI is referred as the performance measurement, which helps in evaluating…
Q: Seiko's current salary is $98,500. Her marginal tax rate is 32% and she fancies European sports…
A: After tax cost to company is calculated by applying the corporate tax rate on the salaries expense…
Q: what is the minimum dollar amount you need to sell the goods for in order for this to be a…
A: Net Present Value: It is calculated by reducing the initial cost from the total present value of…
Q: Jose is thinking about purchasing a soft drink machine and placing it in a business office. He knows…
A: Calculate the profit per year as follows: Profit per year = Number of working days in a…
Q: At the current selling price, what is his percent margin?
A: Given that: Xavi is a painter of landscapes and seashore portraits. He works outside and has no…
Q: Alex has been offered an engineering job with a large company that has offices in Makati and Laguna.…
A: Future worth refers to the value of a current asset at some future date based on the interest…
Q: Taylor and Charlie currently live in New Orleans. Taylor is currently making $60,000 per year, and…
A: Hi There, thanks for posting the question. But as per Q&A guidelines, we must answer the first…
Q: Liam dreams of starting her own business to import consumer electronics products to the country. she…
A: Starting a business requires many assets, and the most important asset is the investment…
Q: Taylor and Charlie currently live in New Orleans. Taylor is currently making $60,000 per year, and…
A: Taylor Charlie Currently making $ 60,000.00 $…
Q: John sells a product for $65 and it cost $30 to produce (UVC) and has fixed cost (FC) of $175,000…
A: Break-Even Point of Sales is that point on which company will recover all cost ( Variable Cost +…
Q: .Link wants to make $100,000 after tax on his new venture into selling pizza-on-a-stick, using a…
A: ANSWER 1. Point of indifference is the level of volume at which total costs of two…
Q: A farmer sows a certain crop. It costs $240,000 to buy the seed, prepare the ground, and sow the…
A: In this question , there is a farmer sow certain crops and we calculate net present value (NPA) in…
Q: Jamie is considering leaving her current job, which pays $75,000 per year, to start a new company…
A: Accounting Cost=Explicit Cost Economic cost=Implicit Cost Opportunity Cost = Explicit Cost +…
Q: A young mechanical engineer is considering establishing his own small company. An investment of…
A: The rate of return is that rate which is the cost of borrowing amount or cost of capital.
Q: Your cousin makes $300 an hour as a lawyer (noló) and considering paying someone $800 to paint his…
A: The opportunity cost is equal to the benefit foregone when choosing one option over another.
Q: After graduation, Charmaine have been offered an engineering job with a large company that has…
A: Time value concept It tells that having money today is of more value than that of receiving the…
Q: Manny Kurr is considering the purchase of a beauty salon. The initial cost of this purchase is…
A: Since you have posted a question with multiple sub-parts, we will solve the first three sub-parts…
Q: Aji Fatou is thinking about opening a hardware store. She estimates that it would cost $525,000 per…
A: Total revenue minus explicit and implicit (opportunity) costs equals economic profit. Accounting…
Q: You own 120 acres of a forest that has timber on it. A paper manufacturing company has made you an…
A: to find which alternative we should elect we need to find the NPV of the idea where we will harvest…
Q: you estimate that you will need about $80,000 to send your child to college in eight years.Y ou have…
A: To Find: Rate of Interest
Q: What is the NPV on Charlie's investment ___? and should Charlie purchase the apartments___? yes or…
A: Given cash flows Intial = 1000000 Year 1 to 3 = 450000 Year 4 = 50000 Rate = 17%
Q: Gary kiraly wants to buy a new Italian sports car in three years. The vehicle is expected to cost…
A: using excel PV function
Q: A high school graduate has to decide between working and going to college. If he works, he will work…
A: Net Present Value is the difference between the present value of cash inflows and cash outflows.
Q: Victor hernandez Considers a Career Change Victor is somewhat satisfied with his sales career and…
A: Future value is value after compounded growth of income.
Q: Simon is considering purchasing an emu, which he can graze for free in his backyard. Once the emu…
A: Given, Initial price = $1500 Value of Payment after 3 years = $2000 Interest rate R = 8%
Q: Suppose that, at age 30, you might wish to leave your job and pursue a master’s degree. If you…
A:
Q: Manny Kurr is considering the purchase of a beauty salon. The initial costof this purchase is…
A: “Since you have posted a question with multiple sub-parts, we will solve the first three sub-parts…
Q: (b) Samuel Gumede earns £39,000 a year working for a building company as a project manager. He is…
A: A business is an organization entirely made for earning profits or for fulfilling social needs by…
Q: David is interested in a rental apartment that would supply him with $60,000 at the end of year 1,…
A: The amount that David should pay for this investment should be equal to the NPV of all cash flows.…
Q: Nabil is considering buying a house while he is at university. The house costs $200 000 today.…
A: Given Information: Initial cost of house is $200,000 Net rental income is $2000 per month MARR is 6%…
Q: John is a very cost-conscious investor. His rule of thumb is that it costs $250 per year, starting…
A: Present value refers to the time value of the money concept. It states that the money received today…
p11
Step by step
Solved in 2 steps
- Manny Kurr is considering the purchase of a beauty salon. The initial cost of this purchase is $16,000. The after-tax cash flows from this investment should be $4,000 per year for the next 5 years. His opportunity cost of capital is 10 percent. Calculate the following:a. Payback—Should Manny buy the beauty salon based on payback if hisrequired payback is less than 3 years?b. The present value of the benefits (PVB),c. The present value of the costs (PVC),d. The net present value (NPV )—Should Manny buy the beauty salon based on NPV rules?e. Profitability index (PI )—what does the profitability index mean in terms of buying the beauty salon?f. Internal rate of return (IRR), (Hint: Use interpolation)—should Manny buythe beauty salon based on IRR rules?g. Accounting rate of return (ARR)—Should Manny buy the beauty salon based on the ARR? (please answer e,f, & g)Paul just graduated from college and landed his first "real" job, which pays $43.200 a year. In 13 years, what will he need to earn to maintain the same purchasing power if inflation averages 2 percent? The future value, Fv, Paul will need to earn if inflation averages 2 percent is $______ (Round to the nearest cent.) Please answer fast i give you upvote.Jim Nance has been offered an investment that will pay him $860 three years from today. a. If his opportunity cost is 9% compounded annually, what value should he place on this opportunity today? b. What is the most he should pay to purchase this payment today? c. If Jim can purchase this investment for less than the amount calculated in part (a), what does that imply about the rate of return that he will earn on the investment?
- John is trying to decide if he should attend college or not. Part of his decision will be based on the return on investment of college. He estimates that the cost to attend Texas Tech, including room and board, is $24,044 per year. He also assumes costs will rise by 6% per year. How much is a 4-year degree going to cost, John? N 4 I/Y PV 0 PMT FVRoger has a levered cost of equity of 0.14. He is thinking of investing in a project with upfront costs of $7 million, which pays $2 million per year for the next 9 years. He is going to borrow $5 million to offset the startup costs at a rate of 0.08. His tax rate is 0.4. He will repay this loan at the end of the project. What is the NPV of this project, using the FTE method?Manny Kurr is considering the purchase of a beauty salon. The initial costof this purchase is $16,000. The after-tax cash flows from this investmentshould be $4,000 per year for the next 5 years. His opportunity cost of capitalis 10 percent. Calculate the following:a. Payback—Should Manny buy the beauty salon based on payback if hisrequired payback is less than 3 years?b. The present value of the benefits (PVB),c. The present value of the costs (PVC),d. The net present value (NPV )—Should Manny buy the beauty salon basedon NPV rules?e. Profitability index (PI )—what does the profitability index mean in terms ofbuying the beauty salon?f. Internal rate of return (IRR), (Hint: Use interpolation)—should Manny buythe beauty salon based on IRR rules?g. Accounting rate of return (ARR)—Should Manny buy the beauty salonbased on the ARR?
- An entrepreneur has $200,000 is available for investment and Minimum Acceptable Rate of Returm (MARR) - 17% per year. If the first alternative would earn him 25% per year on investmert of 590,000, and the second alternative would earn him 30 per year on investment of $85,000. Considering their weighted averages (Overall ROR), which investment is economically better for him if they are mutually exclusive alternatives? Second alternative First alternative All of the alternatives None of the alternativesPaolo is considering purchasing a Sunlife Capital investment. Paolo will receive P1,000 every three months for the next two years if he purchases the investment. He would make the first P1,000 payment as soon as he purchases the investment. How much should Paolo be willing to pay for this investment if his required rate of return is 16%? * P1,345.60 P10,764.80 P7,002.05 P1,368.57Sardor has been offered an investment that will pay him $500 three years from today. If his opportunity cost is 7% compounded annually, what value should he place on this opportunity today? 103. 102. A company has cost of debt of 6% and cost of equity of 15%. In this country, the cornorate income tax rate is 209 If the deht to og WAC CO
- (b) Samuel Gumede earns £39,000 a year working for a building company as a project manager. He is considering the possibility of leaving the company and starting his own business. To do this, he will have to use all his £60,000 savings that are currently invested at an interest rate of 2%. He estimates that the annual profit from his own business will be £50,000. Other relevant costs in starting his own business amount to £1,750. Required: Using the information above, calculate the net relevant benefit of Samuel starting his own business.Victor is somewhat satisfied with his sales career and has always wondered about a career as a teacher in a public school. He would have to take a year off work to go back to college to obtain his teaching certificate, and that would mean giving up his $52,000 salary for a year. Victor expects that he could earn about the same income as a teacher. Round your answers to the nearest dollar. What would his annual income be after 10 years as a teacher if he received an average 3 percent raise every year? Round Future Value of a Single Amount in intermediate calculations to four decimal places.Suppose schmidt owns some land and is trying to decide when to sell it for a shopping center development. Her goal is to maximize her net worth, the present value of her other income stream plus the value of the land or the value of investment made with the proceeds of selling the land. The interest rate is 5% on the financial investment. The land is now worth $100k if sold. Suppose that the value of the land is expeted to increase at a rate that will slowly decrease over time as she waits. A.) Suppose schmidt expects the land to be worth $104k next year. Should she sell it now? Why? B.) If she expects it to be worth $110k in a year, should she sell now, Why? C.) At what next year land value would Schmidt be indifferent between selling and holding a year?