Sam is planning to start a new business. If he invests all his personal savings in the business, the interest that he could have earned on those savings is considered a(n) Blank______. Multiple choice question. opportunity cost sunk cost financing cost irrelevant cost
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Sam is planning to start a new business. If he invests all his personal savings in the business, the interest that he could have earned on those savings is considered a(n) Blank______.
sunk cost
financing cost
irrelevant cost
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- An implication of the life cycle theory is that: Multiple Choice Households are planners whose actions extend beyond their current resources and pleasurable activities today to future needs and assets to meet them. Utility can be measured in money terms. Household spending decisions are based on the amount of income they earn currently. All of the choices are correct. None of the choices are correct.True or False. 1. In determining the direction of financial goals, one has to decide whether to continue the same course of action, expand or change the current situation. 2. Opportunity cost is expressed in monetary terms. 3. Personal financial plan helps a person remain financially solvent. 4.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 two investments that have positive net present values and are financially feasible. Your boss wants you to make a recommendation on which one of the two to invest in given different useful lives? How do you account for this/make the decision?Please describe NPV, IRR and their relationship. How do you evaluate each for making an investment decision? That is, what is a favorable NPV and IRR for making an investment decision. If you were developing a capital budgeting process at your employer, how would you prioritize your projects? What is the NPV when IRR = WACC, IRR>WACC, and IRR<WACC? There is a duplex for sale in Absecon for $700,000 at this time. It has 2 units that generate a total of $25,000 in gross rent. The property taxes are $4,000, commercial property insurance is $2,000, flood insurance is $1,000, and annual maintenance is $2,000. You expect to sell it in one year at a price growth of 0%. What is the NPV with a WACC of 10%. Is the IRR greater or less than the WACC? Would you invest in this project and why?Generally, when NPV is negative or IRR isHaving to decide on the purchase of a piece of machinery to improve productivity is part of the finance manager’s responsibility in ____________. Question 11 options: 1) short-term financial management 2) capital raising 3) capital budgeting 4) preparing the accountsIn the financial portion of the business plan, how can an entrepreneur make the most of their investment?Discuss the payback period, NPV (net present value), and IRR (internal rate of return) methods for capital budgeting analysis. What result does each method provide the user? What are the limitations of each of these methods? Which method would you find most useful in making the best investment decisions for your business and why?explain that when developing a working capital policy, the entrepreneur determines the joint impact of the level of working capital investment and financing on profitability and risk,and Compare the three alternative working capital policies. Which policy would you consider implementing should you want a venture to show a higher expected profitability?Opportunity cost is best defined as ☐ a. the opportunity to earn a profit that is greater than the one currently being made. ○ b. the amount that is given up when choosing an activity that is not as good as the next best alternative. ○ c. the amount given up when choosing one activity over the next best alternative. ○ d. the amount given up when choosing one activity over all other alternatives.4. Which of the following is the best definition of sustainable income? a. Sustainable income is a measure of solvency that does not include capital expenditure b. Sustainable income is the same as net income. c. Sustainable income is income that is unusual in nature and infrequent in occurrence. d. Sustainable income is the most likely level of income to be obtained in the future.SEE MORE QUESTIONS
