What would you recommend

Assignment Help Microeconomics
Reference no: EM132173471

Question: The following two projects are recommended for investment:

a. Initial investment $800K, annual income $400K b. Initial investment $1,500K, annual income $700K The lives of both projects are five years. The projects are in a tax-free zone and the inflation is considered to be negligible. The investor has a MARR of 30%. He comes to you for advice and asks you to use the ROR method and make a recommendation. What would you recommend?

 

Reference no: EM132173471

Questions Cloud

Draw the cash flow diagram for the project : Equipment is bought for an initial cost of $20,000. Its operation will result in a net income of $6,000/ for the first year, increasing by $1,000 each year.
Should christians charge poor people interest on loans : Do you think the interest on payday loans is too high or just right? Should Christians charge poor people interest on loans?
Maintaining and implementing policies for users and data : Elizabeth Montgomery is in charge of the team dealing with designing, maintaining and implementing policies for users and data.
What is the meaning of economics of scope : What is the meaning of economics of scope? How do they differ from economics of scale?
What would you recommend : Initial investment $800K, annual income $400K b. Initial investment $1,500K, annual income $700K The lives of both projects are five years.
Distribution of income in capitalist economies : "Neoclassical theory explains the distribution of income in capitalist economies as a reflection of (i) what individuals desire, (ii) what they bring to product
Would you advise him to take the loan and invest : If he can only put down $33M but his bank will extend him a loan for the rest of the initial investment to be used on this project, at 15% in a way that he has.
The hhi for the industry is : Suppose an industry has 4 firms each with 20% of sales, and 4 firms each with 5% of sales. The HHI for the industry is?
The company can tolerate probability of stockout : If the company can tolerate a probability of stockout equal to 9%, what is the reorder point?

Reviews

Write a Review

Microeconomics Questions & Answers

  What is the opportunity cost of a milkshake

Economics 101- Draw Frodo's budget constraint. Note that pizzas are on the horizontal axis and milkshakes on the vertical axis. Label the points where the constraint touches the axes. What is the opportunity cost of a milkshake?

  Key economic adviser to president george w bush said

a key economic adviser to president george w. bush said yesterday he believed that national saving was too low in the

  Methods of internal rate of return

What is the machine's payback period? Compute net present value of machine if the cost of capital is 12%. Find out the expected internal rate of return for this machine?

  Role of our government play in price ceilings

What role should our government play in Price Ceilings?

  What profit is made when average cost equals average revenue

What is abnormal profit? Where is profit maximized? What profit is made when average cost equals average revenue?

  Is it statistically different from zero

If the past three months of pcip are zero and pcsp-1 =0, what is the predicted growth in industrial production for this month? Is it statistically different from zero?

  Which interval has which level

Three confidence intervals for the mean shear strength (in ksi) of anchor bolts of a certain type are com- puted, all from the same sample. The intervals are (4.01, 6.02), (4.20, 5.83), and (3.57, 6.46). The levels of the intervals are 90%, 95%, a..

  How has globalization impacted apples production of iphone

Using the article, discuss the factors that played a role in Apple's decision to locate to China and how has globalization impacted Apple's production of the iPhone? Make sure to use concepts discussed in class.

  What is the firms profit-maximizing price

If the software is not protected, so that piracy is an option for consumers, what is the firm's profit-maximizing price?

  Long-run aggregate supply curve

The long-run aggregate supply curve is vertical at economy's potential output level. Why is the long-run aggregate supply curve situated at his level of output rather than below or above the potential output level?

  Describe economic principle that company executives consider

Describe the economic principles that company executives should consider when developing a strategy or strategies that will maximize profits while minimizing incentives for competitors to develop competing products

  What impact will the policy in part a have on the market

What impact will the policy in part A have on the market? Illustrate this with a diagram. Use the market for skimmed milk as a guide. Assume the equilibrium price is €1,000 per ton.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd