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IF B = 2 answer the following question
Consider the following situation:
A company promises its staff that if the company doubles its production rate in
December, every employee will get a bonus of 1.000 €.
Identify which principle of finance is shown in this example?
Step by step
Solved in 2 steps
- The manager of a small firm wants to know which among the three different projects should the company enter into. Details of the three projects are as follows: JOJO GINA MARIA LORINDA KANOR Initial investment P 120,000 P 125,000 P 180,000 P160,000 P35,000 Net present value 25,000 24,000 45,000 35,000 10,000 Internal rate of return 10% 15% 12% 8% 9% Profitability index 1.21 1.19 1.25 1.22 1.29 If the management has a budget of P500,000 only, which projects would be undertaken? a. Jojo, Gina, Lorinda, and Kanor b. Gina, Maria, Lorinda, and Kanor c. Jojo, Maria, Lorinda, and Kanor d. Jojo, Gina, Maria, and Kanor(gnore income taxes in this problem.) Your Company is considering an investment that has the following data: Year 2 5 Investment $20,000 Cash inflow $12,000 $12,000 $15,000 $4,000 $4,000 In what year does the payback period for this investment occur? Year 2. Year 3. Year 4. Year 5.suppose that you have started a manufacturing/Service Organization in Abu Dhabi UAE with a capital of $200,000-$800,000. You are free to assume/invest within the range of $200,000 - $800,000, depending on the size of the business. 1-you need to assume cash flows with assumed discounted rate for five years and calculate the NPV of the project. 2- Find out the BEP (Break Even Point) of your business and take necessary actions on the basis of your results.
- suppose that you have started a manufacturing/Service Organization in Abu Dhabi UAE with a capital of $250000 1-you need to assume cash flows with assumed discounted rate for five years and calculate the NPV of the project. 2- Find out the BEP (Break Even Point) of your business and take necessary actions on the basis of your results.1. If the Fur Zapper entrepreneurs want $600,000 at 15%, what is the total value of their business? 2. Explain what the "line of credit" is in Lori's offer. 近A firm is considering an investment that will earn a 6% rate of return. If it were to borrow the money, it would have to pay 8% interest on the loan, but it currently has the cash, so it will not need to borrow. Should the firm make the investment? Show your work.
- The Weiland Computer Corporation is trying to choose between the following mutually exclusive design projects, P1 and P2:Year 0123 Cash flows (P1) -$53,000 27,000 27,000 27,000 Cash flow (P2) -$16,000 9,100 9,100 9,100a. If the discount rate is 10 percent and the company applies the profitability index (PI) decision rule, which project should the firm accept?b. If the firm applies the Net Present Value (NPV) decision rule, which project should it take?c. Are your answers in (a) and (b) different? Explain why?The Weiland Computer Corporation is trying to choose between the following mutually exclusive design projects, P1 and P2: Year 0 1 2 3 Cash flows (P1) -$53,000 27,000 27,000 27,000 Cash flow (P2) -$16,000 9,100 9,100 9,100 If the discount rate is 10 percent and the company applies the profitability index (PI) decision rule, which project should the firm accept? If the firm applies the Net Present Value (NPV) decision rule, which project should it take? Are your answers in (a) and (b) different? Explain why?Use the present value and future value tables to answer the following questions. Time Value of Money - Principles of Accounting, Volume 2: Managerial Accounting | OpenStax A. If you would like to accumulate $2,400 over the next 5 years when the interest rate is 15%, how much do you need to deposit in the account? $_____ B. If you place $6,200 in a savings account, how much will you have at the end of 6 years with a 12% interest rate? $_____ C. You invest $7,000 per year for 11 years at 12% interest, how much will you have at the end of 11 years? $_____ D. You win the lottery and can either receive $760,000 as a lump sum or $60,000 per year for 19 years. Assuming you can earn 8% interest, which do you recommend and why? _____
- 3. An entrepreneur has two projects to choose between. Both require an investment of $1 which must be borrowed. The projects produce gross returns in one year as follows.: Project Risky Safe payoff if failure ($) payoff if success ($) 10 probability of success 2/10 6/10 Suppose there are 100 such entrepreneurs. A bank cannot observe the project choice of an entrepreneur. Call the gross repayment the loan requires when the project succeeds R: i What is the relationship between the R the bank charges and the project chosen by the entrepreneur? Explain in detail ii. Over what ranges of R will the safe and risky projects, respectively, be chosen? What is the maximum R banks can charge consistent with the entrepreneur choosing the safe project? Explain. ii. What R will banks charge and why?The Sandbox's Company has cash needs of P5 million per month. If Sandbox needs more cash, it can sell marketable securities, incurring a fee of P300 for each transaction. If Sandbox leaves its funds in marketable securities, it expects to earn approximately 0.50% per month on their investment. 1. Using the Baumol model, how much would be the Sandbox’s minimum total costs associated with cash infusion? 2. If Sandbox gets a cash infusion of P1 million each time it needs cash, what are the holding costs associated with its cash investment? 3. Using the Baumol model, what level of cash infusion minimizes Sandbox’s costs associated with cash?Jassim is a Credit Officer with Riffa Bank and is working on structuring a loan facility for his client. The Bank uses Return on Net Funds Employed to price its loan: Bank policy dictates that loans must generate an 10%6 Rate of Return. Additional loan expenses on this facility will be BHD5,000. How much will Riffa Bank earn from a BHD300,000 loan for 1 year. O a. BHD 30,000 O b. BHD35,000 O C. BHD 40,000 O d. BHD 50,000