Canning Machine 2 Why would Jennifer say that? Jennifer would prefer to use the internal rate...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Canning Machine 2 Why would Jennifer say that? Jennifer would prefer to use the internal rate of return, which is more accurate. This fails to factor in the time value of money. She is concerned with calculating the payback period over a much longer time frame. This does not value current money more than future money. Monster Beverage is considering purchasing a new canning machine. This machine costs $3,500,000 up front. Required return = 11.0% $1,000,000 Year Cash Flow 0 $-3,500,000 1 2 $1,200,000 Correct! 3 $1,300,000 4 $900,000 What is the value of Year 3 cash flow discounted to the present? 5 $1,000,000 Canning Machine 2 Why would Jennifer say that? Jennifer would prefer to use the internal rate of return, which is more accurate. This fails to factor in the time value of money. She is concerned with calculating the payback period over a much longer time frame. This does not value current money more than future money. Monster Beverage is considering purchasing a new canning machine. This machine costs $3,500,000 up front. Required return = 11.0% $1,000,000 Year Cash Flow 0 $-3,500,000 1 2 $1,200,000 Correct! 3 $1,300,000 4 $900,000 What is the value of Year 3 cash flow discounted to the present? 5 $1,000,000
Expert Answer:
Posted Date:
Students also viewed these finance questions
-
Write a program that takes as command-line arguments the name of an image file and the pixel coordinates of a rectangle within the image; reads from standard input a list of Color values (represented...
-
(a) A 60-kg woman rides a 7-kg bicycle up a 3 percent slope at a constant speed of 2 m/s. How much power must be developed by the woman? (b) A 90-kg man on a 9-kg bicycle starts down the same slope...
-
An annular fin of thickness t is used as a radiator to dissipate heat for a space power system. The fin is insulated on the bottom and may be exposed to solar irradiation GS. The fin is coated with a...
-
When an industry is earning profits, will it encourage the entry of new firms?
-
On January 1, 2018, Marshall Company acquired 100 percent of the outstanding common stock of Tucker Company. To acquire these shares, Marshall issued $200,000 in long-term liabilities and 20,000...
-
Assume that we have two events, A and B , that are mutually exclusive. Assume further that we know P(A) = .30 and P(B) = .50. What is the probability that A occurs but B does not?
-
Calculate the average return of the following returns Date Return 11/01/2018 1.42% 11/14/2018 -1.08% 12/01/2018 2.35% 12/14/2018 7.11% NOTE: Enter the PERCENTAGE number rounding to two decimals. If...
-
The Financial Crisis of 20079 saw interest rates in the UK and Europe at historically low levels. Low interest rates appeared to have a limited stimulus effect on economies, and central banks looked...
-
Caregivers should consider themselves as patient advocates because of their position to help patients who are often helpless and unable to speak for themselves.
-
The Financial Crisis of 20079 hit Italy hard. It was one of the countries which faced problems with its deficit. By 2018, the situation had not improved a great deal. Elections in March 2018 failed...
-
Patient responsibilities include maximizing healthy habits, such as exercising, not smoking, and eating healthy; being involved in healthcare decisions; working collaboratively with healthcare...
-
Imagine a firm that employs two types of workers some with computer skills and some without. If technology advances so that computers become more useful to the firm, what happens to the marginal...
-
Do you know who are pre-internet immigrants? If so, ask them how they stayed in touch with their home and family?
-
Write the general quadratic equation y2 - 8y - 4x + 28 = 0 in standard form. Determine the vertex, focus, and directrix of the parabola defined by this equation. Sketch a graph.
-
An alternate computer processing site that contains the necessary wiring and computer equipment for operation, but not data files, is called a ( __________ ). (a) hot site (b) cold site (c)...
-
A dormant piece of code placed in a computer program for later activation by a specific event is a ( __________ ). (a) trapdoor (b) logic bomb (c) Trojan horse (d) worm
-
Marking and locking out a disk or DASD sector so that it will not be used again after it has been found to be unreliable is called ( __________ ). (a) hacking (b) flagging (c) disk shadowing (d) disk...
Study smarter with the SolutionInn App