Project a Requires an Original Investment of $65,000 Below Is a Table for the Present Value of an Will

question 104

Essay

Project A requires an original investment of $65,000. The project will yield cash flows of $15,000 per year for 7 years. Project B has a calculated net present value of $5,500 over a 5-year life. Project A could be sold at the end of 5 years for a price of $30,000. a) Using the table below, determine the net present value of Project A over a 5- year life with salvage value assuming a minimum rate of return of 12%. b) Which project provides the greatest net present value?
Below is a table for the present value of $1 at compound interest. $$\begin{array} { l l l l } \text { Year } & 6 \% & 10 \% & 12 \% \\\hline 1 & 0.943 & 0.909 & 0.893 \\2 & 0.890 & 0.826 & 0.797 \\3 & 0.840 & 0.751 & 0.712 \\4 & 0.792 & 0.683 & 0.636 \\5 & 0.747 & 0.621 & 0.567\end{array}$$ Below is a table for the present value of an annuity of $1 at compound interest. $$\begin{array} { l l l l } \text { Year } & 6 \% & 10 \% & 12 \% \\\hline 1 & 0.943 & 0.909 & 0.893 \\2 & 1.833 & 1.736 & 1.690 \\3 & 2.673 & 2.487 & 2.402 \\4 & 3.465 & 3.170 & 3.037 \\5 & 4.212 & 3.791 & 3.605\end{array}$$

Understand the advantages and disadvantages of different forms of business ownership, such as corporations, partnerships, and franchises.

Comprehend the legal and financial aspects of franchising, including the roles and concerns of franchisees and franchisors.

Recognize the specific challenges and considerations associated with family-owned businesses and closed corporations.

Identify the characteristics and benefits of different types of corporations, including public, private, international, and not-for-profit organizations.

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Definitions:

Workplace-Related Injury

An injury or illness that occurs as a result of activities, environment, or duties associated with one's job.

Provinces and Territories

Designations for areas of governance within a larger country, notably used in Canada, where provinces have their own governments and territories are governed more directly by the federal government.

Wellness Accounts

Financial accounts or benefit programs dedicated to supporting the physical and mental health needs of employees, often including provisions for activities like fitness, nutrition, and stress management.

Benefit Plans

Programs offered by employers to provide employees with compensations like health insurance, retirement funds, and paid time off.