Option (B) is the right choice. Explanation: Calculating the depreciable basis involves subtracting residual value from cost, which here results in $190,000 - $10,000, giving us $180,000. The usage is identified as 75,000 bolts. The first-year figures indicate the book value starts at $190,000, while 15,000 bolts were created, translating the depreciation expense into 15,000 multiplied by $2.40, equal to $36,000. Subsequently, the ending book value becomes $190,000 minus $36,000, resulting in $154,000. For Year 2, using 19,000 units leads to a depreciation expense of $45,600. The concluding book value for Year 2 becomes $108,400, while accumulated depreciation for both years culminates at $81,600.
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:
This indicates a narrower competitive focus.
Explanation:
In a narrow competitive focus, a company might adopt a strategy centered around either cost leadership or differentiation. By employing a focus strategy, the business opts to produce goods or offer services aimed specifically at a particular customer segment. In a cost leadership approach, the firm could engage in activities that highlight its ability to provide the lowest price for its targeted audience. Conversely, in a differentiation approach, the firm finds its competitive edge in providing a broad array of products.
When both cohesiveness and performance norms are elevated, productivity also tends to be high. Explanation: This statement holds true regarding the relation between group cohesiveness and the standards of performance on productivity. Cohesiveness is a defining aspect that influences group dynamics and is significant from a behavioral standpoint. It refers to the extent of attraction and commitment of group members to one another and their desire to remain part of the group. Cohesiveness illustrates how closely members feel connected to the group, based on the level of camaraderie among them. The greater the cohesiveness, the more members influence one another to conform to group standards, ultimately reflecting how individuals identify with the group.
