The following show four mutually exclusive investments. Which one is the best investment?
A) Initial investment: $1.1 million; Cash flow in year 1: $160,000; Annual Growth Rate: 2%; Cost of Capital: 9.1%
B) Initial investment: $1.2 million; Cash flow in year 1: $150,000; Annual Growth Rate: 2%; Cost of Capital: 7.2%
C) Initial investment: $1.3 million; Cash flow in year 1: $160,000; Annual Growth Rate: 1%; Cost of Capital: 5.6%
D) Initial investment: $1.4 million; Cash flow in year 1: $150,000; Annual Growth Rate: 2%; Cost of Capital: 8.4%
Answer: C
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On January 1, 20x5, Dove Valley Corporation had 100,000 shares of $10 par value common stock issued and outstanding. All 100,000 shares had been issued in a prior period at $30 per share. On February 1, 20x5, Dove Valley purchased 4,000 shares of treasury stock for $36 per share and later sold the treasury shares for $40 per share on March 2, 20x5. The entry to record the purchase of the treasury
shares on February 1, 20x5, is: A) Cash 144,000 Treasury Stock-Common 144,000 B) Cash 144,000 Treasury Stock-Common 128,000Gain on Treasury Stock-Common 16,000 C) Treasury Stock, Common 40,000 Loss on Treasury Stock-Common 104,000Cash 144,000 D) Treasury Stock, Common 144,000 Cash 144,000
Current assets divided by current liabilities is known as the
A) profit margin. B) current ratio. C) working capital. D) capital structure.
Dual sourcing refers to contracting with multiple supply sources ______.
a. as a hedge against price decreases by a supplier b. as a buffer against disruptions in the supply chain c. as a way to quickly expand production capacity d. as a way to give an equal opportunity to different suppliers
To achieve large inventory savings, you need ______.
A. an annual replenishment system B. large shipments of purchased materials and components C. frequent shipments of purchased materials and components D. a smaller number of units to be produced and sold