Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Please, I need help answering and solving questions 22-25 (showing the work). Thank you! 22. Consider a project that has an initial outlay of $1100.

Please, I need help answering and solving questions 22-25 (showing the work). Thank you!image text in transcribed

22. Consider a project that has an initial outlay of $1100. The firm's cost of capital is 9%. The expected cash flows are: Year 1-$550 Year 2-$610 Year 3-$470 What is the net present value and payback period for the project? A) $241.06; 2.16 years B) $180.00; 2.48 years C) $391.06; 1.60 Years $280.94: 1.90 years 7 23. The Dammon Corp. has the following investment opportunities: Machine B $22.500) Inflows Machine C $35.500) Inflows year 1 S-0- year 2 30,000 year 3 5,000 year 4 20,000 Machine A s10.000) Inflows year 1 $6,000 year 2 3,000 year 3 3,000 year 4 -0- year 1 $12,000 7,500 year 2 year 3 1,500 year 4 1,500 Under the payback method and assuming these machines are mutually exclusive, which machine(s) would Dammon Corp. choose? AMachine A B Machine B C) Machine C D) Machine A&B 24. Martin Corporation currently sells widgets at a price of $11.00 per unit. Its variable cost is $6.50 per unit while fixed costs are $400,000. At what quantity sold will the firm breakeven? A) 44,444 units B 55,555 units C88,888 units D) 99,999 units 400 000 Cn-6.50)0 25. Cash flows that could be realized from the best alternative use of an owned asset are called A) incremental costs B) lost resale opportunities Copportunity costs D) sunk costs

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Corporate Finance

Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe

6th International Edition

0071229035, 978-0071229036

More Books

Students also viewed these Finance questions

Question

d. In what sports does the person consult?

Answered: 1 week ago