They successfully gathered $83,550; here's how I arrived at that amount. Since $15,000 represents 100% of the goal and they amassed 557%, I calculated $15,000 multiplied by 5, which equals $75,000, plus 57% of $15,000 which amounts to $8,550. Therefore, adding $75,000 and $8,550 gives a total of $83,550.
Yes, since Boat Builders, LLC did not maintain an adequate standard of care on their property.
Answer:
IRR = 14.96%
The project should be rejected, because the calculated internal rate of return falls short of the required return (14.96% < 16%).
Explanation:
The internal rate of return (IRR) is an essential calculation in capital budgeting for assessing potential investment profitability. The IRR rule guides whether to pursue a project or investment, stipulating that if the IRR exceeds the minimum required return, the project should be accepted. Conversely, if it’s lower than the cost of capital or the requisite return, the project should be turned down.
The formula used is as follows:
$0 = (initial investment x -1) + CF1 / (1 + IRR) ^ 1 + CF2 / (1 + IRR) ^ 2 +... + CFX / (1 + IRR) ^ X
Initial Investment = Total initial investment costs year x-1
CFx = Cash Flow during period X
IRR = Internal rate of return
Due to the nature of the IRR formula, it cannot be computed analytically; it must be derived through trial and error or via specialized software for IRR calculation.
In this instance:
IRR = -27200 + 11200 / (1 + IRR) ^ 1 + 14200 / (1 + IRR) ^ 2 + 10200 / (1 + IRR) ^ 3
IRR = 14.96%
The company should not proceed with the investment, as the calculated IRR is less than what is required (14.96% < 16%).
Answer:C) All of these statements are valid.
Explanation:
Sensitivity analysis examines how the optimal decision and EMV fluctuate when one or more inputs change.
Sensitivity analysis evaluates how various values of an independent variable influence a specific dependent variable under certain assumptions.
It is applied within particular constraints that rely on one or more input variables.
A contingency plan constitutes a strategy within a multistage decision scenario that designates which decision to implement for every potential outcome.
A contingency plan is a category of action tailored to assist governance in effectively responding to significant future events or situations that may or may not arise.
A multistage decision problem refers to a situation where decisions and observations of uncertain outcomes interchange.
