Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Basic Finance Expert

problem: A junior executive is fed up with his boss's operating policies. Before leaving the office of his angered superior, the young man advises that a well trained monkey could handle the trivia assigned to him. Pausing a second to consider the import of this closing statement, the boss is seized by the thought that this must have been in the back of her own mind ever since the hired the junior executive. She decides to consider replacing the executive with a bright young baboon. She figures that she could argue strongly to the board that such "capital deepening" is necessary for the cost conscious firm. After two days, a feasibility study is completed, & the following data are presented to the president:

It would cost dollar 12,000 to buy and train a reasonably alert baboon with a life expectancy of twenty years.

Yearly expenses of feeding and housing the baboon would be $4,000.

The junior executive's annual salary is $7,000 [a potential saving if the baboon is hired].

The baboon will be depreciated on a straight-line basis over 20 years to a zero balance.

The firm's marginal tax rate is 40%.

The firm's current cost of capital is determined to be 11%.

On the basis of the net present value criterion, should the monkey be hired [and the junior executive fired]?

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M918459
  • Price:- $18

Guranteed 24 Hours Delivery, In Price:- $18

Have any Question? 


Related Questions in Basic Finance

1 discuss how the interrupted time series design with a

1. Discuss how the interrupted time series design with a reversal and the interrupted time series design with multiple replications improve on the simple interrupted time series design. 2. Distinguish between a longitudi ...

What information explicit and implicit can be derived from

What information (explicit and implicit) can be derived from financial statement analysis? Does the standardization required by GAAP add greater validity to comparisons of financial data between companies and industries? ...

1 compare and contrast manufacturing and geographic

1. Compare and contrast manufacturing and geographic postponement. 2. Define and illustrate cash-to-cash conversion, dwell time minimization, and cash spin. How do supply chain strategy and structure impact each? 3. Disc ...

1 under what conditions might a property with an assumable

1. Under what conditions might a property with an assumable loan sell for more than comparable properties with no assumable loans available? 2. What is meant by the incremental cost of borrowing additional funds? 3. Is t ...

Why do higher interest rates lead to higher call option

Why do higher interest rates lead to higher call option prices but lower put option prices? Suppose a European put price exceeds the value predicted by put-call parity. How could an investor profit? Demonstrate that your ...

Finance1on a typical day park place clinic writes 1000 in

Finance 1. On a typical day, Park Place Clinic writes $1,000 in checks. It generally takes four days for those checks to clear. Each day the clinic typically receives $1,000 in checks that take three days to clear. What ...

The hudson corporation makes an investment of 24000 that

The Hudson Corporation makes an investment of $24,000 that provides the following cash flow: Year Cash Flow 1................ $ 13,000 2................ 13,000 3................ 4,000 a. What is the net present value at ...

The potential revenues of all projects are in fact

The potential revenues of all projects are in fact uncertain. The company determines that the revenue for project 1 is following a uniform distribution ranging from $1,200,000 to $2,000,000. The revenue for project 2 is ...

1 why must researchers use reliable measures2 why is it

1. Why must researchers use reliable measures? 2. Why is it virtually impossible to eliminate all measurement error from the measures we use in research? 3. What is the relationship between the reliability of a measure a ...

Use psycinfo or a similar database to find a

Use PsycINFO or a similar database to find a quasi-experimental or nonexperimental research study. (Note: Try using a specific term such as nonequivalent control group or cross-sectional as a search term. Or look for a t ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

WalMart Identification of theory and critical discussion

Drawing on the prescribed text and/or relevant academic literature, produce a paper which discusses the nature of group

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro