Suppose that your car should be sold now for $5000. Is this a sunk cost? Give the explanation.
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A: Please find the answer to the above question below:
Suppose that your car should be sold now for $5000. Is this a sunk cost?
Give the explanation.
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- Based on Poleskis current situation, will it earn its target net income? If not, how many units need to be sold to achieve the target? Explain.You have calculated the value of an investment to be $100. If it costs $105, you should buy it. Select one: True Falseb. What is the minimum price per unit that would be financially acceptable to Talladega? Round your answer to two decimal places.$fill in the blank
- Suppose that we can describe the world using two states and that two assets are available, asset K an asset L. We assume the asset’s future prices have the following distribution State Future Price Asset K Future Price Asset L 1 $55 $60 2 $45 $30 The current price of asset K is $50, and the current price of asset L is $50. You plan to buy a home for $100,000 in the future. You want to guarantee that you will have the money. What would you buy/sell today to accomplish this, and what would it cost today?Required information [The following information applies to the questions displayed below.] Kate's Candy Corporation makes chewy chocolate candies at a plant in Winston-Salem, North Carolina. Steve Bishop, the production manager at this facility, installed a packaging machine last year at a cost of $600,000. This machine is expected to last for 10 more years with no residual value. Operating costs for the projected levels of production, before depreciation, are $120,000 annually. Steve has just learned of a new packaging machine that would work much more efficiently in the production line. This machine would cost $696,000 installed, but the annual operating costs would be only $48,000 before depreciation. This machine would be depreciated over 10 years with no residual value. He could sell the current packaging machine this year for $300,000. Steve has worked for Kate's Candy for 7 years. He plans to remain with the firm for about 2 more years, when he expects to become a vice president…Suppose that we can describe the world using two states and that two assets are available, asset K an asset L. We assume the asset’s future prices have the following distribution State Future Price Asset K Future Price Asset L 1 $55 $60 2 $45 $30 The current price of asset K is $50, and the current price of asset L is $50. 5. You plan to buy a home for $100,000 in the future. You want to guarantee that you will have the money.What would you buy/sell today to accomplish this, and what would it cost today?
- If you were analyzing a replacement project and you suddenly learned that the oldequipment could be sold for $1,000 rather than $100, would this new informationmake the replacement look better or worse?Q.The Kuhl Brothers ask you whether they should buy the new machine. To help in your analysis, calculate the following: 1. Difference in after-tax cash flow from terminal disposal of new machine and old machineYou are opening up a brand new retail strip mall. You presently have more potential retail outlets wanting to locate in your mall than you have space available. What is the most appropriate tool to use if you are trying to determine the optimal allocation of your retail space? A. payback period B. profitability index C. internal rate of return (IRR) D. discounted payback period O E. net present value (NPV)
- g. Living Expenses: Assume reasonable values for your living expenses. (You may adjust these numbers to fit your estimated costs, but a good starting point for monthly costs are Utilities: $150, TV: $40, Internet: $30, Cell Phone: $40, Phone: $40) You should also include estimates for food, gas, entertainment, and any other expense you can think of. What is your monthly payment for all of your living expenses?Q.The Kuhl Brothers ask you whether they should buy the new machine. To help in your analysis, calculate the following: 1. Annual recurring after-tax cash operating savings from using the new machine (variable and fixed)You are developing a new product and you use a 12% discount rate to compute its NPV. Your banker, from whom you hope to obtain a loan, expresses concern that your discount rate is too low. How do you respond?