Reference no: EM131063082
A project will have an initial cost of $1 million and an upgrade cost of $300,000 in year five. The annual operating costs are expected to be $100,000. The savings are valued at $200,000 in years one through four, and $50,000 each year thereafter through the 10 year life of the project. If the savings are considered to be a benefit to the people, the B/C ratio at an interest rate of 6% per year is closest to:
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Decided to sell new line of golf clubs
: McGilla Golf has decided to sell a new line of golf clubs. The clubs will sell for $700 per set and have a variable cost of $300 per set. The company has spent $140,000 for a marketing study that determined the company will sell 52,000 sets per year ..
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Sales method relies on the fact that capacity increases
: The percent of sales method relies on the fact that capacity increases are __________ ,even though in practice such increases are __________.
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When compounding occurs annually and the investment lasts
: When compounding occurs annually and the investment lasts longer than one year, compound interest:
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Analyze current financial ratios for a given business
: Your assignment this week is to analyze current financial ratios for a given business. Think of a specific business you find interesting, i.e. Apple, UTC, Southwest Airlines, etc. Search the web for that business’ “Financial Statement”. (You will fin..
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The savings are considered to be a benefit to the people
: A project will have an initial cost of $1 million and an upgrade cost of $300,000 in year five. The annual operating costs are expected to be $100,000. The savings are valued at $200,000 in years one through four, and $50,000 each year thereafter thr..
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Does the type of contract matter
: Bob is known throughout his neighborhood as being "crazy." None of his neighbors know him very well and he is only known by this reputation. If Bob enters into a contract, how do we know if it will be valid, voidable, or void? Does the type of contra..
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Calculate the operating leverage for each firm
: Following is financial information relative to two companies in the same industry. Alpha Omega Sales $10,000,000 $10,000,000 Variable Cost 5,000,000 2,000,000 Contribution Margin 5,000,000 8,000,000 Fixed Costs 3,000,000 6,000,000 Operating Income $2..
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What is the payback period for each project
: Global Toys, Inc., imposes a payback cutoff of three years for its international investment projects. Assume the company has the following two projects available. Year Cash Flow A Cash Flow B 0 –$ 51,000 –$ 96,000 1 20,000 22,000 2 26,600 27,000 3 22..
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What is the firms average accounts receivable balance
: Barans Company currently has an average collection period of 55 days and annual sales of $1 billion. Assume a 365-day year. What is the firm's average accounts receivable balance? if the variable cost of each product is 65% of sales, what is the aver..
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