Carter and the other shareholders will lose their investment and shares if Extreme Trax goes bankrupt.
Clarification:
In the event of a company's bankruptcy, creditors are paid first. Stockholders possess shares in the company, thus they assume the highest risk. If there's no remaining funds after creditor payments, stockholders will forfeit their investments.
Response:
The correct selections are options A and B
Clarification:
The CRM system refers to a system designed to collect and manage customer account data within a unified database and provide access through various networks such as intranet and internet. Thus, the involved components include data warehouses and databases, and it functions as a sophisticated analytical tool.
Answer:
2 Days
Explanation:
To clarify, we need to restate the utility function for clarity
U=V^{1/2}
1. Probability of an illness occurring in the family is 20%
2. If an illness occurs, the total number of days impacted is calculated as:
Total vacation days = 10 days x Probability of illness = 20%
= 10 x 0.2 = 2 days
This indicates that should an illness occur based on this probability, 2 out of the 10 vacation days will be affected
3. The number of remaining vacation days to enjoy would thus be 10-2 = 8 days
This indicates that even after accounting for 2 days of potential illness, the family can still enjoy their vacation period.
V= 2 days
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%).
Engenuity stated:
1. Option A is unsuitable since the monthly installments are too steep.
2. Option B is unfavorable because it demands a large initial payment and has mileage limits that could pose issues.
3. Option C fits my budget best and offers full car ownership once the loan is fully paid off.
