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 3. The
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Direct and Indirect Cash Flows XACC/291 Shontell Chrisman October 30‚ 2013 Direct and Indirect Cash Flows The direct and indirect presentations of cash flows both reach the same conclusions‚ however‚ the way that the conclusions are reached are different. The direct method reports everything that involves cash‚ and the indirect method reports for items that do not affect cash. A direct statement of cash flow reports a company ’s sources and use of cash. The statement has three
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to the nature of a project. Capital inv appraisal of new technologies: Problems‚ misconceptions and research directions * Specifically‚ it has been alleged that the traditional appraisal methods of payback‚ discounted net present value (NPV) and internal rate of return (IRR) undervalues the long-term benefits; that traditional financial appraisals assume a far too static view of future industrial activity‚ under-rating the effects and pace of technological change; that there are many benefits
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5 Free Cash Flows of the Packaging Machine Investment 7 Appendices 7 i. Objectives This report seeks to answer the following five questions about Star River Electronics Ltd.: 1. Assess the current financial health and recent financial performance of the company. What strengths and/or weaknesses would you highlight to Adeline Koh? 2. Forecast the firm’s financial statements for 2002 and 2003. What will be the external financing requirements of the firm in those years? Can the
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scarce. What this means is that everything has a price‚ and nothing is free in this economic. Economics depends upon the phenomenon of scarcity because if the world didn’t have to pay for the thing that we need then the world will be very different if there wasn’t prices for everything then we will always be low on supplies. That is way we have a price for everything so that the supplies will not be low and that is why the supplies price rises every so often. 2.) Define opportunity cost. What is the
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employees their wages and pays his other bills‚ the owner of Billy’s Café takes his profit. Factor market 2. List the opportunity costs of the following: a. going to college - the money you would have earned if you worked instead. b. missing a lecture – takes away from your knowledge of that lesson. c. withdrawing and spending $100 from your savings account‚ which earns 5 percent interest annually – you would lose $5 if you take out $100. d. going snowboarding on the weekend before final examinations
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Application of Opportunity Costs Donald G. Fox Sr. ECON220-1103A-24 Unit 1 IP AIU Online Michelle and James both‚ produce potatoes and chickens. Michelle can produce 200 potatoes and 50 chickens per year‚ and James can produce 80 potatoes and 40 chickens per year. What is Michelle ’s opportunity cost of producing potatoes? If opportunity costs‚ is opportunity lost‚ then Michelle devoting 100% of her time to produce 200 potatoes her cost would be 100% loss of 50 chickens. What is Michelle
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Calculating Returns Suppose a stock had an initial price of $92 per share‚ paid a dividend of $1.45 per share during the year‚ and had an ending share price of $104. Compute the percentage total return. The return of any asset is the increase in price‚ plus any dividends or cash flows‚ all divided by the initial price. The return of this stock is: R = [($104 – 92) + 1.45] / $92 R = 0.1462 or 14.62% Calculating Returns Rework the problem above‚ but this time assuming the ending
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the opportunity cost of each Plan. An opportunity cost is what must be given up in order to obtain some item (Mankiw 483). Specifically if you cannot accomplish both Plans‚ but have to choose one over the other‚ you would look at what you’re giving up from one in order to obtain the other. Opportunity costs are key when viewing economics‚ as we have to take things into consideration that may otherwise be ignored. For example when looking at the opportunity cost of a job‚ we must evaluate what job/salary
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ancestors that lived through the Great Depression. Regardless of the industry‚ currency is in short supply. Capital‚ worth‚ and the company’s value‚ is the challenge. Cash flow is extremely important for administrators at this perplexing time in history; alterations to this cash flow issue require a inflexible level of explanation‚ especially as the cash amount of the adaptation increases. This brutal state of mind is in conflict with the understanding that coincides with decisions made in the current
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