recommendation on the purchase based on (1) a given rate of return of 15% (Task 4) and (2) the firm’s cost of capital (Task 5). Task 4. Capital Budgeting for a New Machine A few months have now passed and AirJet Best Parts‚ Inc. is considering the purchase on a new machine that will increase the production of a special component significantly. The anticipated cash flows for the project are as follows: Year 1 $1‚100‚000 Year 2 $1‚450‚000 Year 3 $1‚300‚000 Year 4 $950‚000 You have now been tasked
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Chapter 5 Notes Three general reasons for holding onto cash: 1. managing transaction needs 2. preparing for cash emergencies 3. making a temporary investment -very conservative advice suggest you should have enough liquid assets to cover 5 to 8 months of regular expenses -others suggest 2 months is more than enough Four rules to help better cash management outcomes: 1. keep track of your cash by balancing your checkbook every month 2. develop a system to ensure that
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Modern Project Management. 1. Project: A project is an effort or endeavor undertaken for a period of time in the purpose to build‚ create or achieve a unique product‚ services or result. The Characteristics are: * It has an established objective. * It has a defined life span i.e. (Beginning and end) * It involves the input of several departments and professionals. * It’s Unique‚ because it is what has never been done before. * It makes vital use of specific time‚ cost and
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Chapter 2 Global E-Business: How Businesses Use Information Systems Lecturer: Richard Boateng‚ PhD. • • Lecturer in Information Systems‚ University of Ghana Business School Executive Director‚ PearlRichards Foundation‚ Ghana Email: richard@pearlrichards.org 2.1 © 2010 by Prentice Hall Management Information Systems Chapter 2 Global E-Business: How Businesses Use Information Systems LEARNING OBJECTIVES • Define and describe business processes and their relationship to information
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Chapter 1 The Problem and Its Background Introduction Everyone is aware that Information Technology (IT) has played a very significant role in taking bussinesses and educational institutions to new heights. Before the advent of computers and relevant technology‚ business and information management were totally done using manual resources. As a result‚ the time taken to complete a task was more‚ quality of work was not up to the mark‚ and the procedures also tended to be more complicated (Rampur
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Managerial accounting chapter 13 garison Question 13-11 Project A Initial Cost = $15‚000 Life of the project = 10 years Annual net cash inflow = $4‚000 Salvage Value = $0 Required rate of return = 16% Item Years Amount of cash flow 16% factor Present Value of Cash flow Annual net cash flow 1 to 10 $4‚000 4.833 $19‚332 Intial Investment Now $15‚000 1 $15‚000 Net Present Value (a-b) $4‚332 Project B Initial
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2 Multiple Choice Questions for Sustainable Tourism: Theory and Practice (Author: David Weaver) CHAPTER TWO 11. The comprehensive model of sustainable tourism a) places tourism in the context of other sectors. b) advocates financial sustainability. c) supports only the strong approach toward sustainability. d) adheres to all of the above. e) adheres to (a) and (b) only. 12. The Bellagio Principles are a) guidelines that help destinations to implement sustainable
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Chapter 2: Diversity in Organizations Diversity: Describe the two major forms of workforce diversity. Managers need to recognize and capitalize on individual differences to get the most from their employees. Effective diversity management increases an organization’s access to the widest possible pool of skills‚ abilities‚ and ideas. Managers also need to recognize that differences among people can lead to miscommunication‚ misunderstanding‚ and conflict. Demographic Shifts: 1. Changing
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CHAPTER 8 STOCKS AND THEIR VALUATION (Difficulty: E = Easy‚ M = Medium‚ and T = Tough) Multiple Choice: Conceptual Easy: Required return Answer: e Diff: E [i]. An increase in a firm’s expected growth rate would normally cause the firm’s required rate of return to a. Increase. b. Decrease. c. Fluctuate. d. Remain constant. e. Possibly increase‚ possibly decrease‚ or possibly remain unchanged. Required return Answer: d Diff: E [ii]
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CHAPTER 2 How to Calculate Present Values Answers to Problem Sets 1. If the discount factor is .507‚ then .507*1.126 = $1 2. 125/139 = .899 3. PV = 374/(1.09)9 = 172.20 4. PV = 432/1.15 + 137/(1.152) + 797/(1.153) = 376 + 104 + 524 = $1‚003 5. FV = 100*1.158 = $305.90 6. NPV = -1‚548 + 138/.09 = -14.67 (cost today plus the present value of the perpetuity) 7. PV = 4/(.14-.04) = $40 8. a. PV = 1/.10 = $10 b. Since the perpetuity
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