A project’s average net income divided by its average book value is referred to as the project’s average: A. net present value. B. internal rate of return. C. accounting return. D. profitability index. E. payback period. The internal rate of return is defined as the: A. maximum rate of return a firm expects to earn on a project. B. rate of return a project will generate if the project in financed solely with internal funds. C. discount rate that equates the net cash inflows of a project
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Assignment “Net Promoter Score: a strong indicator of loyalty and growth?” 2 Table of Content Page Introduction…………………………………………………………………………3 1 Main advantages of the NPS……………………………………………...4 1.1 1.2 1.3 2 Simple and understandable – the calculation of the NPS……...4 Simple categorization of the customer groups - …………………. application of the NPS……………………………………………...5 Motivating Change - customer-focused management by NPS...6 Main disadvantages of the NPS ................................
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limited liability‚ ease of transferability‚ ability to raise capital‚ and unlimited life. 2. Evaluate the following statement: Managers should not focus on the current stock value because doing so will lead to an overemphasis on short-term profits at the expense of long- term profits. Presumably‚ the current stock value reflects the risk‚ timing‚ and magnitude of all future cash flows‚ both short-term and long-term. If this is correct‚ then the statement is false. 3. Could a company’s cash
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want a 40 percent rate of return on their investment‚ calculate the venture’s present value. B. Now assume that the Year 6 cash flows are forecasted to be $900‚000 in the stepping stone year and are expected to grow at an 8 percent compound annual rate thereafter. Assuming that the investors still want a 40 percent rate of return on their investment‚ calculate the venture’s present value. C. Now extend Part B one step further. Assume that the required rate of return on the investment
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Although the new business owner has jobs lined up or contracts in place that will create returns to make the payments‚ that new business owner gets denied financing. This predicament is not automatically restricted to the start-up business owner either. Established construction businesses are realizing that their bank or finance company is decreasing to make that all essential loan. It is because the current effect of the residential sub-prime loan disorder has wandered to the business community
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Define and differniate between vertical integration and horizontal integration? Vertical Integration :- It describes a style of management control. Vertically integrated companies in a supply chain are united through a common owner. Usually each member of the supply chain produces a different product or (market-specific) service‚ and the products combine to satisfy a common need. It is contrasted with horizontal integration.Vertical integration is one method of avoiding the hold-up problem. A
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Principles (GAAP). By using these concepts as the foundation‚ readers of financial statements and other accounting information do not need to make assumptions about what the numbers mean. For instance‚ the difference between reading that a truck has a value of $9000 on the balance sheet and understanding what that $9000 represents is huge. Can you turn around and sell the truck for $9000? If you had to buy the truck today‚ would you pay $9000? Or‚ perhaps the original purchase price of the truck was
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1. How much will $1000 deposit in savings account earning a compound annual interest rate of 6% be worth at the end of the following number years? a) 3 years $1‚191 b) 5 years $1‚338 c) 10 years $1‚791 2. If you require a 9% return on your investment which would you prefer? a) $5‚000 today PV = $5‚000 b) $15‚000 five years from today PV = $9‚748.50 c) $1‚000 per year for 15 years PV = $8061 Select option b
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Net Present Value/Present Value Index The management team at Savage Corporation is evaluating two alternative capital investment opportunities. The first alternative‚ modernizing the company’s current machinery‚ costs $45‚000. Management estimates the modernization project will reduce annual net cash outflows by $12‚500 per year for the next five years. The second alternative‚ purchasing a new machine‚ costs $56‚500. The new machine is expected to have a five-year useful life and a $4‚000
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give you $500‚000 on your 35th birthday. Assuming you are age 21 (thus 14 years from receiving this)‚ what is the present value of this gift if the appropriate discount rate is 8.0%? (Ch5) a. $170‚231 b. $282‚449 c. $442‚619 d. $191‚206 e. $734‚664 2. You need $10‚900 for the down payment on a new car. You presently have $5‚000 in savings for which you expect to earn 6% (annual rate‚ compounded monthly). If you deposit a further $500 each month to this account‚ how long‚ approximately‚ before you
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