Cash flows should be discounted at high cost of capital

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Reference no: EM132054501

1. Haverty's Furniture owns a building with a replacement cost of $707,000 which is insured for $438,340 with an 80% coinsurance clause. The building has a fire loss of $23,100. How much will the insurance company pay?

$14,322

$17,903

$23,100

$21,483

2. Which 2 of the following pricing strategies are the best for highly competitive environment in a tourism and hospitality business to optimise revenue for the long term survival ? and highlight their strengths and weaknesses with real life experiences in any tourism and hospitality business eg. Flights, hotels or even F&B ( journals or articles )

Pricing at a premium

Pricing for market penetration

Economy pricing

Price skimming

Psycology pricing

Bundle Pricing

3. If a low-risk company invests in a high-risk project, those cash flows should be discounted at a high cost of capital.

true

false

4. If the lease contract includes an option for Warf to purchase the equipment at its fair market value upon the lease’s expiration, how will the option influence the value of the lease?

The option will increase the value of the lease.

The option will decrease the value of the lease.

The option will not change the value of the lease.

The option will either increase or decrease the value of the lease.

Reference no: EM132054501

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