Suppose that GDP is $50 million in 2015 but falls to $48 million in 2016, and that no changes in personal consumption expenditures, gross private domestic investment, and government spending are recorded. What must have happened to net exports to cause this change

Answer:

The correct option is D. $8,311

Explanation:

The steps to reach the deposit ammount of $8,311 are the following:

1) Calculate Future Value of cash flow= 250,000×(1+0.08)∧25=1,712,118.80

2) Calculate the total ammunt to be accumulated by the end of year 45

=1,712,118.80+1,500,000=3,212,118,80

3) Finally you have to calculate the annual deposit to achieve the 3,212,118,80 in 45 years

FV= 3,212,118,80

r=8%

n=45

3,212,118.80= P(  (1+0.08)∧45-1 )                                                                                                                                                                      

                                  0.08

= 8,311. Annual end of the year deposit

Answer:

Andrews ending balance in Retained Earnings next year will be $128,861

Explanation:

Retained Earnings is a Reserve formed from the Company`s Profits retained back in the business and forms part of Shareholders Equity

Calculation of Ending Retained Earnings is: Opening Retained Earnings Balance + Net Profit for the Year - Dividends Declared during the year.

Andrews Company Ending  Retained Earnings for Next Year will be:

Opening Retained Earnings Balance     $98,561

Add Net Profit for the Year                     $46,300

Less Dividends                                        ($16,000)

Ending  Retained Earnings                      $128,861

Answer:

Conversion price of the stock = 40

so correct option is (d) 40

Explanation:

given data

convertible ratio = 25:1

convertible debentures = 8%

stock is trading = 38

debenture trading = 110

solution

we get here Conversion price of the stock  that is express as

Conversion price of the stock = Par value of the bond ÷ Conversion ratio  ............1

Conversion price is price paid per equity share to acquire it through conversion

and Conversion ratio is 25 shares per bond if converted

put here value and we get

Conversion price of the stock = [tex]\frac{1000}{25}[/tex]

Conversion price of the stock = 40

so correct option is (d) 40

Answer:

100

Explanation:

The CPI full form is the consumer price index which shows the changes in the prices of the various goods and the other items. It reflects the variations in the prices whether it can be increment or decrements

Since the question has already said using 2010 as the base year so the consumer price index for the year 2010 is equal to the value of the base year i.e 100

Final answer:

The Consumer Price Index (CPI) for 2010 is 100, as 2010 is the base year and the CPI of the base year is always set to 100. This serves as a reference point for comparing with other years' CPI.

Explanation:

To calculate the Consumer Price Index (CPI) for 2010, we must first determine the total spending on golf-related items in that year. This is done by multiplying the quantity of each item purchased by its price. The calculation for each item is as follows:

Golf balls: 2,000 balls × $3.00 per ball = $6,000

Golf clubs: 200 clubs × $80.00 per club = $16,000

Golf tees: 1,000 tees × $0.10 per tee = $100

Adding these amounts together, the total spending on golf items in Greenland in 2010 was:

$6,000 + $16,000 + $100 = $22,100

Since 2010 is the base year, the CPI for 2010 is defined as 100. Base years always have a CPI of 100 because it serves as a reference point to compare against other years.

Answer: b) Ability

Explanation: Ability is the possession of skill to do a task. It involves being able to complete a given task.

Dave's new hires are motivated and ready to do the job, however they are not sure what tasks are included in their job. In this instance, organising a training that targets 'ability' will solve a part of the problem.

However, Dave needs to do more to target the actual problems which are the job description and role play. Teaching the staff how to do a job without given them job schedules may not be so effective in the long run.

Dave is targeting the attribute of role-perception with the training program, but it may not directly solve all the problems. Option C is correct

Dave is targeting the attribute of (C) role-perception with the training program. Role-perception refers to an individual's understanding of their job tasks and responsibilities. By training his employees on how to operate the machines used for work, Dave is providing them with clarity on what tasks are included in their job.

This training program can help improve the situation by increasing the employees' understanding of their role and reducing the likelihood of confusion or uncertainty. However, it may not directly address other issues such as crewmembers coming late or not showing up without communication, as these may be influenced by other factors such as motivation or situational factors.

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Answer:

A. presumes only that the consumer can say one combination of two goods yields more or less utility than some other combination

Explanation:

Answer:

Letter C is correct. Social Justice Theory.

Explanation:

The most suitable alternative for this issue is letter c, Theory of Social Justice.

This theory refers to an ethical and political philosophy that states that there is justice beyond those recognized by the economic law of supply and demand, civil and criminal law, and the social and moral rules and structures of society. According to this theory, social justice refers to relationships that must be fair to all groups in society, that is, all people must have equal access to health, well-being, justice, opportunities, etc., regardless of their conditions. political, economic or other.

Social justice theory can punish or favor individuals regardless of their characteristics, choices or actions.

In the above question, we can say that social justice is adequate, because in economic terms, it is able to grant opportunities, redistribution of wealth and income to groups considered oppressed by certain oppressors.

Final answer:

Anthony's vote aligns with Social Justice Theory, which seeks a fair allocation of resources in society and particularly relates to Rawls's theory involving the veil of ignorance.

Explanation:

Anthony's vote aligns with the philosophy of Social Justice Theory, which focuses on the equitable distribution of opportunities, resources, and rights within a community. This theory is concerned with creating a society where there is a fair allocation of community assets, making sure that individuals in higher income brackets do not reduce the availability of subsidized housing meant for those in greater need.

The concept of social justice invokes the “veil of ignorance” in Rawls's theory. It is a method of designing a just society by making decisions without knowledge of one's position within the society, ensuring fair and unbiased policies. Lastly, while utilitarian principles, such as those discussed in the theory of Utilitarianism, are important in many aspects of social policy and ethics, the specifics of the housing bill discussed do not directly pertain to this philosophy which aims to maximize the overall happiness or welfare of the society.

Answer:

The correct option is D,taxpayers should accelerate income

Explanation:

Assuming current tax rate is 20% and believed to increase to 28% next year,the tax planning strategy available at anyone's disposal is to ensure he takes advantage of the current 20% which is lower compared to future 28% by accelerating income,hence the 20% tax is then charged on the accelerated income

The reverse would have been the case if the tax rates are decreasing,so future tax rate is envisaged to be lower compared to status quo.In this case,deferring income would  be the best strategy that saves the day

Answer: The market for homes will be higher when there is increase in the amount of homes being built. In addition, the location of a house determines the cost of the house. For instance, a house located in an urban environment will cost more than the one located in a rural area. Irrespective of having the same components or features, the price will always vary.

Explanation:

Fort Myers is a commercial centre of Lee County, Florida. It is a major tourist destination in Florida. It is a metro city with job markets and a nice quality of live. Between 1994 and 2006, the prices of Fort Myers homes increased more than the rate of inflation. This is due to the quality of life and location of Fort Myers. An increase in the number of houses built increaseD the market for homes. This raised the price of houses higher than the inflation rate.

Final answer:

The rise in Fort Myers home prices between 1994 and 2006 was due to the housing bubble, characterized by speculation, rising homeownership rates, and unsustainable mortgage practices.

Explanation:

Between 1994 and 2006, Fort Myers home prices increased faster than inflation due to several factors. During the early 2000s, there was widespread enthusiasm and speculation in the housing market, which led to what is known as the "housing bubble." At that time, home ownership rates were rising, and housing was considered a safe financial investment, which helped to drive up the market. Furthermore, mortgage values tripled, making housing more accessible even though this accessibility was often driven by unsustainable mortgage practices.

This period saw a significant change in home values with the average U.S. home price rising over 10% per year. No serious analyst believed this rate of growth was sustainable. The homeownership rate also increased, reaching a high of over 69% between 2004 and 2005. This rise in home values ultimately led to a market correction, which, when housing prices fell in 2007 and 2008, contributed to a severe recession.

Analysts attribute the steep rise in home prices to a combination of low-interest rates, lax lending standards, and a belief that housing prices would continue to rise indefinitely. The increase in housing prices during the bubble period was clearly out of step with historical trends and was also much faster than the rate of inflation.

Answer:

Varga should recognize $4,000 as revenue in 2016.

Explanation:

As the cash received in advance is recorded as unearned revenue which is a liability for the Varga Tech Services because they did not provide the services yet. On  December 31,  Eight months have passed and services for these month has been provided. So the revenue of 8 month months of 2016 will be recognized and recorded at year end.

Serive Contract = $6,000 for 12 months

Revenue Recognized in 2016 = $6,000 x 8/12 = $4,000

Answer:

The value of the CD would probably be $3183.62 in three years as shown below.

Explanation:

The formula applicable here is future value ,which means the value of the investment in 3 years at 2% compound interest rate.

The formula is given as:

FV=PV*(1+r)^n

FV is the unknown here

PV is the present value of the amount to be invested which is $3000

r is the rate of return on investment at 2%

n is the time horizon of the investment which is 3 years

FV=$3000*(1+0.02)^3

FV=$3183.62

In other words, by investing in the certificate of deposit, the investor would likely have $3183.62 in three years' time.

The rate on certificate of deposit is usually low because it is one the safest investment vehicle ,hence offers a lower rate of return,that shows clearly the positive relationship between risk and return on investment

Final answer:

Investing $3,000 in a 3-year CD with a 2% annual compound interest rate will result in a total of $3,183.60 when the CD matures.

Explanation:

If you invest $3,000 in a 3-year certificate of deposit (CD) that pays 2% interest compounded annually, you can calculate the final amount using the formula for compound interest: A = P(1 + r/n)^(nt). In this formula, A is the amount of money accumulated after n years, including interest. P is the principal amount (the initial amount of money), r is the annual interest rate (in decimal), n is the number of times that interest is compounded per year, and t is the time the money is invested for in years.

In your case, P = $3,000, r = 0.02 (2% expressed as a decimal), n = 1 (since the interest is compounded annually), and t = 3 years. So, your calculation would be A = $3,000(1 + 0.02/1)^(1×3).

Let's do the math: A = $3,000(1 + 0.02)^3 = $3,000(1.02)^3 = $3,000 × 1.0612. When you calculate this, you get A = $3,183.60.

Therefore, when the CD matures after 3 years, you will have $3,183.60.

Answer:

The correct answer is letter "E": drive.

Explanation:

Following the ideas of Sigmund Freud (1856-1939), the father of Psychoanalysis, a drive is a motivation caused by the pressure of satisfying an urgent need. Some use the term "need" to describe the situation above but there is a differentiation made with "drive" describing the latter as the psychological manifestation and the first as the state of not having something vital.

Answer:

The correct answer is letter "E": every aspect of consumers' purchase decisions.

Explanation:

Consumers' culture is a major component that influences their buying patterns. It determines what, how, when, and where consumers will purchase. Companies must pay special attention to those factors so they can match their efforts to what consumers are likely to demand to satisfy their needs.  

The more a product is linked to consumers' behavior, the more likely a product and its company will succeed.

Answer and Explanation:

Economic Growth can be defined as an increment in production capacity of an economy using all its available resources. The PPF illustrates the largest possible quantity of goods and services a nation can produce base on its available resources. An outward shift in the economy’s production possibility frontier (PPF) depicts  a raise in productive capacity of an economy.  An outward shift implies that an economy has capacity to  increase its production outputs. This can be as a result of   the economy employing new technology, allowing specialization, increasing its labour force, using new production approaches etc. Likewise, an inward shifting PPF implies an economy has witness a loss or exhaustion of some of its scarce resources and it will culminate into reduction in an economy’s productive potential.

Effects of saving and investment upon national GDP

level of savings direct related to the level of investment, investment feeds on available finance from saving. If more people save, the banks will be able  to lend more to firms to support their investments.

low savings and investment implies a PPF inward shift. low savings  in economy implies that the economy is opting for short-term consumption over long-term investment, and this will lead to future undue pressure on available infrastructures ad resources.

spending  on consumer goods vs capital goods effect on the economy

In the short run, the economy must prefer using available resources to produce capital rather than consumer goods. Standards of living will be affected, as private consumption will have access to fewer resources. However, in the longer run, the raised production of capital goods will boost  the production of more consumer goods ad therefore standards of living will experience more increase than they would have witness if the economy had spent most of its income on consumer goods.

Answer:

he said he had been talking with a group that I was in a small town in a relationship between us in the middle and we end the conversation in a small business class that he 6th 66th grade and we end the day in a small town and he is a good thing about being in a small business 666th class that he has a great way of driving

Answer:

c. x1 + 3x2 = 6

Explanation:

Budget Line is the combination of goods that consumer can buy with given prices & Income (spending all).

Equation: p1.x1 + p2.x2 = m  

where p1 & p2 are respective prices ; q1 & q2 are respective quantities ; m is the money income.

Putting p1 = 3 , p2 = 9 as given :

3x1 + 9x2 = 18

Dividing the equation by common factor = 3, we get :

x1 + 3x2 = 6

Answer:

Check the explanation

Explanation:

Going by the question that the proportion of milk and strawberry for milk shake is 1:5.

If amount of milk is to be X1 that means the quantity of strawberry (X2) will be 5×X1, i.e., X2=5X1... Equation 1

And in addition, the milk and strawberry are complementary consumables as strawberry is of no use without milk and vice versa.

Budget equation will be as follows:

P1×X1+P2×5X1=M.... Equation 2

Given M=200, P1=15 & P2=1

Putting values in Equation 2

15×X1+1×5X1=200

X1=10 & X2=50(from equation 1)

Answer a)

With change in P1 from 15 to 5

Again putting values in Equation 2

5×X1+1×5X1=200

X1=20 & X2=100.

The total change in the demand of milk will increase from 10 units to 20 units.

Answer b)

Strawberry and milk are complementary goods here for that reason there would be no effect on substitution.

Answer c)

Since there will be no effect on substitution, total effect will be equal to income effect.

The total change in demand for milk is 26.67 units. The substitution effect indicates increased demand for milk due to a lower price while holding buying power constant. Income effect considers the impact of enhanced buying power due to a lower price.

The total change in demand for milk (x1) is calculated by finding the difference in demand before and after the price change. Before the price drop, Trevor could only afford 200/15 = 13.33 units of milk as one unit costs 15. After the price drop to 5, he can now afford 200/5 = 40 units of milk. Thus, the total change in demand for milk is 40 - 13.33 = 26.67 units.

The substitution effect is consumers substituting towards consuming more milk now that it's cheaper. If we observe the change in demand for milk while keeping his real income (buying power) constant, we see the substitution effect. His real income can be kept constant by offering him a hypothetical situation where the price of milk decreases to 5, but we take away enough income to keep him on his original indifference curve. Little hard to measure without additional data about his utility or indifference curves, but it's a shift towards more milk in his milkshake assuming milk and strawberries are normal goods.

The income effect is how this price decrease affects Trevor's effective buying power. As the price of milk decreases, Trevor's buying power increases - he can now afford to buy more units of milk and strawberries than before. As such, part of the total increase in his demand for milk (26.67 units) will be due to this increased buying power. Again, challenging to measure the specific quantity without more data, but it's the part of the demand change due to his increased buying power.

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Answer:

D. build up the amount of their reserves.

Explanation:

With the changes in the weather patterns increasing the administrative costs of insurance companies and the added costs often exceeding the amount of premium coming in and claims the payment going out, Insurance companies have developed typically, a way of building up the amount of their reserves as a way of addressing this problem.

Insurance companies are required to have a reserve funds to pay out customers claims, and often insurance companies lists the details about their reserves in order to impress customers and give them a feeling of being more secure than than rivals. It is this reserve that insurance companies develops a way of building the amount inside so as to combat the problem of often changes in weather policies that increase their administrative costs to exceed the premium amount that comes in and claims the payment going out.

Answer: The correct answer is D). build up the amount of their reserves.

Explanation: An insurance is a protection from financial loss. It is a hedge against eventualities.

Changes in weather pattern can occur and cost incurred. Having an increased investment income may not necessarily tackle it.

The best way is to build up the amount of RESERVES which is also called retained earnings or ploughed back profit. It forms part of shareholder's equity and can be used in case of eventualities such as changes in weather pattern.

Answer:

The answer is:

Net purchases = $336,100

Cost of goods purchased = $352,900

Explanation:

Net purchases equals purchases minus purchase returns and allowances minus purchase discount.

Purchases = $355,300

Purchase returns = $10,200

Purchase discount = $9,000

Therefore, net purchase is:

$355,300 - $10,200 - $9,000

= $336,100

Cost of goods purchased equals net purchase plus freight in.

Freight in = $16,800

So cost of goods purchased is:

$336,100 + $16,800

=$352,900

The net purchases for Oriole Company are calculated by subtracting purchase returns, allowances, and discounts from total purchases, and then adding freight-in, resulting in a total of $333,900. The cost of goods purchased is equal to the net purchases, which is also $333,900.

To calculate the net purchases for Oriole Company, we start with the total purchases and subtract both the purchase returns and allowances and the purchase discounts. Then, we add the freight-in costs to find the net purchases. After that, the cost of goods purchased (COGP) is simply the net purchases, as there is no mention of beginning inventory or ending inventory in the question to take into account.

Net Purchases = Purchases - Purchase Returns and Allowances - Purchase Discounts + Freight-in

Net Purchases = $355,300 - $10,200 - $9,000 + $16,800

Net Purchases = $353,100 - $19,200

Net Purchases = $333,900

The Cost of Goods Purchased is equal to the net purchases:

Cost of Goods Purchased = Net Purchases

Cost of Goods Purchased = $333,900

Solution:

Weighted-Average Method:  

1. Equivalent units of production  

                                                                  Materials          Conversion

Transferred to next department'               353,000              353,000

Equivalent units in ending work in process

Materials: 27,000 units x 100% complete     27,000

Conversion: 27,000 units x 90% complete                             4,300

Equivalent units of production                      380,000          357,300  

*Units transferred to the next department = Units in beginning work in process + Units started into production - Units in ending work in process = 67,000 + 320,000 - 34,000 = 353,000

2. Cost per equivalent unit  

                                                                Materials          Conversion

Cost of beginning work in process       $ 98, 800           $ 44,000

Cost added during the period               513, 830               242, 130

Total cost (a)                                          $612,630            $ 286,130

Equivalent units of production (b)          380,000            357,300

Cost per equivalent unit (a) ÷ (b)               $1.61                 $ 0.80

3. and 4.

Cost of ending work in process inventory and units transferred out  

                                                        Materials       Conversion     Total

Ending work in process inventory:

Equivalent units                                 27,000             4,300

Cost per equivalent unit                     $ 1.61              $ 0.80

Cost of ending

work in process inventory             $ 43,470          $ 3,440     $ 45,910

Units completed and transferred out:

Units transferred to the                    353,000       353,000

next department  

Cost per equivalent unit                      $ 1.61            $ 0.80

Cost of units completed and

transferred out                                $ 568,330    $ 282,400     $850,730  

5. Cost Reconciliation:  

Cost of beginning work in process inventory ($ 98, 800+ $44,000 ) = $142,800

Costs added to production during the period ($ 513, 830+ $242, 130 ) = $755,960

Answer: 4,500

Explanation:

Answer:

buy/1883

Explanation:

Answer:

True

Explanation:

Cost structure involves all the expenses that a company will incur while operating business model, which it is typically composed of fixed and variable costs. Fixed costs are static with increases or decreases in units of production capacity, while variable costs are dependent. Cost structure is the relative proportion of fixed and variable costs within a company.

Answer:

The activity Debbie is engaged in is Environmental scanning.

Explanation:

The method of collecting data about the peripheral marketing environment to identify and understand marketing trends is known as environmental scanning. This process involves continuous monitoring of the organization to detect the occurrences of opportunities and threats caused by the internal and external environment.

Environmental scanning identifies and prevents the organization from threats so that her present and future plans doesn't get terminated.

Thus, the activity Debbie is engaged in is Environmental scanning.

Answer: Environmental scanning

Explanation: Debbie is engaged in environmental scanning which is defined as a process of collecting data and information about external and internal events that impacts organization's environments. These factors help determine the decisions a business makes; the future direction of the business and they include: competition, economics, technology, legal issues, and social/demographic factors, market research studies etc.

Answer:

April,

May,

And in June;

Explanation:

In April, the company purchased raw materials (Sugar and Peppermint) for $100,000. The entries posted are debit to Inventories and Credit to Cash account (both amounting to $100,000 each).

As such in April,

It produces its candy and sells it to distributors in May for $150,000, but it does not receive payment until June.

When the sale is made in May, the entries required is Debit accounts receivables $150,000 and Credit Sales revenue $150,000. Also, Debit cost of goods sold $100,000 and Credit Inventories $100,000.

Net income is the difference between sales and cost of sales.

As such in May,

For June,

Payment for goods sold in May were received, entries posted are debit to cash account and a credit to accounts receivables (both balance sheet accounts), hence;

Candy Canes Inc. incurred expenses in April with no sales, resulting in zero for all values. In May, they made sales but received no money, resulting in positive net income but negative cash flow. In June, they received the payment, resulting in positive cash flow but no change in net income.

In April, Candy Canes Inc.'s sales, net income, and net cash flow are all zero because no sales were made, though the company did spend $100,000 on sugar and peppermint.

In May, the firm's sales amounted to $150,000. The net income was $50,000 (which is $150,000 in sales subtracting the $100,000 in expenses). However, the net cash flow was -$100,000 because payment was not received in May, and the company spent $100,000 in April.

In June, there were no new sales or expenditure, but because Candy Canes Inc. received payment for the May sales, its net cash flow was $150,000, while the net income remained zero.

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Answer: debit cash $1000; credit accounts receivable $1000

Explanation:

Answer: Debit cash $980; debit sales discounts $20; and credit accounts receivable $1000

Explanation:

Answer:

A) In Best Case: revenues rise by 10% while costs decline by 10%. In the worst case, profits are declining by 10%, while costs are rising by 10%.

Scenario   Unit sales         Variable costs Fixed costs

  Base      360                   $16,300          $334,000

  Best        396                    $14,670           $300,600

  Worst      324                    $17,930           $367,400

b), c) Using the tax shield approach, the OCF and NPV for the base case estimate is:

OCF(base) = [($19,800 – 16,300)(360) – 334,000](0.60) + 0.40(1,006,000/4)

OCF(base)= $656,200

NPV(base) = –$1,006,000 + $656,200(PVIFA14%,4)

NPV(base) = $905,978.01

OCF(worst) = [($19,800 – 17,930)(324) – 367,400](0.60) + 0.40(1,006,000/4)

OCF(worst)= $243,688

NPV(worst) = –$1,006,000 + $243,688(PVIFA14%,4)

NPV(worst) = $ (295,963.28)

OCF(best) = [($19,800 – 14,670)(396) – 300,600](0.60) + 0.40(1,006,000/4)

OCF(best)= $1,139,128

NPV(best) = –$1,006,000 + $1,139,128(PVIFA14%,4)

NPV(best) = $2,313,091.27

d) OCF and NPV with Fixed Costs 344,000

OCF(base) = [($19,800 – 16,300)(360) – 344,000](0.60) + 0.40(1,006,000/4)

OCF(base)= $650,200

NPV(base) = –$1,006,000 + $650,200(PVIFA14%,4)

NPV(base) = $888,295.74

e) (Change in NPV in Case d wrt Case c)/Change in FC,

(888,295.74 - 905,978.01)/(10,000) = -1.75

Answer:

B. Corporations are allowed to deduct from a dividend received the product of the dividend and the percentage of the receiving corporation's ownership in the distributing corporation's stock.

Answer:

X = $6,300,000

Y = $7,000,000

Z = 10%

Explanation:

NB: Investment = Price * Number of shares

For Series A:

Number of shares = 1,000,000

Price = Number of shares/Initial Investment

Price = 1,000,000/100,000 = 10

Investment = 1,000,000 * 10 = $10,000,000

For Series B

Price = $0.75

Number of shares = 500,000

Investment = 500,000 * 0.75 = $375,000

For Series C

Price = $1.25

Number of shares = 300,000

Investment = 300,000 * 1.25 = $375,000

For Series D

Price = $3.50

Number of shares = 200, 000

Investment = 3.50 * 200,000 = $700,000

Total shares = 1,000,000 + 500,000 + 300,000 + 200,000 = 2,000,000

Y = Post-money valuation for the series D funding round

Y = Series D investment * (total post investment share)/(Shares issued for series D)

Y = 700,000 * (2,000,000)/(200,000) = $7,000,000

Y = $7,000,000

X = Pre-money valuation for the series D

X = Post-money valuation - New Investment (Series D)

X = $7,000,000 - $700,000

X = $6,300,000

Z = Percentage of the firm that Dan owns after the last funding round

Z = (Number of shares of series D/ Total number of shares)*100%

Z = (200,000/2,000,000)*100%

Z = 10%

Answer:

2 day freight

Explanation:

Given:

Number of units = 2,000

Primary holding cost = $10 per unit a year

Computation of Extra 3 days (five-day freight - two-day freight) holding cost:

Holding cost for 3 days = Number of units × Primary holding cost × (Number of days / 365)

= 2,000 × $10 × (3/365)  

= $20,000 × (3/365)

= $164.39

Holding cost for 3 day of extra freight is $164.39.

This cost is higher than saving cost so, 2 days freight will be chosen.

The alternative that would be recommended is the 2-days freight.

The first thing to do is to calculate the holding cost. This will be:

= 2000 × 10

= 20000

Then, the holding cost for three days extra freight will be:

= 20000 × (3/655)

= 164.38

Therefore, this is more than $135 and it's not advisable.

Therefore, it's advisable to go for 2-days freight.

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Answer:

$14,118

Explanation:

The computation of the present value is shown below:

Years           Annual cash flows  Discounting factor @5.6%     Present value

1                    $3,000.00               0.946969697                      $2,840.91

2                  $5,000.00               0.896751607                      $4,483.76

3                  $8,000.00                0.8491965975              $6,793.57

Total                                                                                             $14,118.24

The discount factor is computed below

= 1 ÷ (1 + rate)^years

like for year 1

= 1 ÷ (1 + 0.056)^1

The present value of the cash flows from the investment, given an opportunity cost of capital of 5.6%, is calculated for each year and summed to give a total of $14,201.07. Hence, the answer to the multiple-choice question is 'None of the Above'.

To compute the present value, we utilize the formula: PV = CF / (1 + r)^n, where PV is the present value, CF is the cash flow, r is the discount or interest rate, and n is the period. Therefore, we calculate the present value for each year and sum them:

Then the total present value is: $2,841.52 + $4,476.78 + $6,882.77 = $14,201.07. Therefore, the answer would be 'None of the Above'.

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