Nominal GDP measures "the value of output produced in current prices." Option D is correct.
Nominal GDP is a measure of a country's economic output that is not adjusted for inflation. It reflects the current market prices of goods and services produced in a given time period. This means that changes in nominal GDP can be influenced by both changes in the quantity of goods and services produced, as well as changes in their prices.
Nominal GDP can provide insight into the current state of an economy, but it can be misleading if there are significant changes in the price level over time. In order to account for the effects of inflation, economists often adjust nominal GDP to obtain a measure of real GDP, which reflects changes in output after controlling for changes in prices.
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Mary uged to go to a reataurant to order pasta. Now she cooks pasta at home. This change in behavior, by itvelf, has
A. increaged measured GDP.
B. not affected meagured GDP.
C. decreased measured GDP by the value of the restauran meal.
D. decreased measured GDP by the value added by the restaurant's preparation and serving of the meal.
The change in behavior, by itself, has decreased measured GDP by the value added by the restaurant's preparation and serving of the meal. Therefore, alternative D. is correct.
Mary's decision to cook pasta at home instead of going to a restaurant means that the value added by the restaurant's preparation and serving of the meal is no longer included in GDP. This value added represents economic activity that generates income and employment for the restaurant and its employees.
As a result, Mary's change in behavior decreases measured GDP by the value added by the restaurant's preparation and serving of the meal.
In conclusion, alternative D. is correct.
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10. Define the word "Forgeries"
Answer:
White-collar crimes that generally refer to the false making or material alteration of a document, signature, banknote, or work of art with the specific intent to illegally obtain money
Suppose college tuition decreased, leaving students with more income to spend on food and other things. Suppose also that the price of wheat increases. Wheat is an input to making pasta, a staple in the diet of college students. What would we expect to happen in the market? -Equilibrium price would decrease, but the impact on equilibrium quantity would be ambiguous. -Equilibrium quantity would decrease, but the impact on equilibrium price would be ambiguous. -Equilibrium price would increase, but the impact on equilibrium quantity would be ambiguous. -Equilibrium quantity would increase, but the impact on equilibrium price would be ambiguous.
The correct option is: Equilibrium price would increase, but the impact on equilibrium quantity would be ambiguous. Suppose the college tuition decreased, leaving students with more income to spend on food and other things. Suppose also that the price of wheat increases. Wheat is an input to making pasta, a staple in the diet of college students.
What is the equilibrium price?
Equilibrium price is defined as the price at which the quantity demanded by the consumers is the same as the quantity supplied by the producers.
What is the equilibrium quantity?
Equilibrium quantity is the amount of a good or service that is produced and sold when the demand and supply of the product are balanced and the market price is stabilized.
What will happen in the market when college tuition decreases, and wheat prices increase?
When college tuition decreases, students' disposable income will increase, which will increase the demand for food, including pasta, which is a college student's staple food. As a result, the demand curve for pasta will shift to the right. However, when wheat prices rise, the supply of wheat, which is used to make pasta, decreases. As a result, the supply curve for pasta shifts to the left. These two shifts in the supply and demand curve for pasta will result in the following effects: The equilibrium price of pasta will increase, but the impact on equilibrium quantity will be ambiguous.
Therefore, the correct option is: Equilibrium price would increase, but the impact on equilibrium quantity would be ambiguous.
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In Yogacara Buddhism, the Alaya-Vijnana has been likened to what? Hallucinogens Shamanism Religion The Unconscious
In Yogacara Buddhism, the Alaya-Vijnana has been likened to the Unconscious. Option D is the correct answer.
Alaya-vijnana is a Sanskrit word that means "storehouse" or "repository." According to Yogacara Buddhism, Alaya is a storehouse or accumulation of all our karma, deeds, actions, and mental states that exist within our consciousness. This "store consciousness" stores all the imprints of past actions and experiences, and these imprints continue to impact our current behavior and perception.
In Yogacara Buddhism, the concept of Alaya-Vijnana was compared to the Unconscious or Subconscious of Western psychology. It has a deep impact on a person's mind and influences their perceptions, emotions, and behavior. The Alaya-Vijnana serves as the source of all sensory and mental experiences, and it provides the foundation for all cognitive and volitional activities.
The notion of Alaya-Vijnana enables Yogacara practitioners to recognize and understand their minds' intricacies and how mental patterns and concepts affect their behavior. The idea suggests that practitioners should cultivate awareness and self-reflection to better understand their true nature and increase their spiritual growth.
Thus, option D is the correct answer.
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What occupations depend on knowledge of the seasons for their success? Please make your answer 20 words or more
There are several occupations that depend on knowledge of the seasons for their success. These include farmers, fisherman, wildlife biologists, meteorologists, gardeners and landscapers.
Farmers: Farmers need to understand the timing of seasonal changes in order to plant and harvest crops at the right time. They must also be able to anticipate weather patterns and adjust their farming practices accordingly.
Fishermen: Fishermen need to understand the seasonal changes in water temperature, fish migration patterns, and spawning behavior in order to be successful in catching fish.
Wildlife biologists: Wildlife biologists need to understand the seasonal changes in animal behavior, migration patterns, and habitat use in order to monitor and manage wildlife populations.
Meteorologists: Meteorologists rely on knowledge of the seasons to predict weather patterns and provide accurate weather forecasts.
Gardeners and landscapers: Gardeners and landscapers need to understand the seasonal changes in plant growth and flowering patterns in order to create and maintain beautiful gardens and landscapes.
Thus, knowledge of the seasons is essential for the success of many occupations, particularly those that involve working with nature and the environment.
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Which of the following does the Hippocratic oath not promise?
*
1 point
Doctors will help their patients to the best of their ability
Doctors will keep what their patients tell them secret
Doctors will treat only the symptoms of an illness, not the cause
Doctors will not harm anyone purposefully
The Hippocratic Oath does not promise that: C. doctors will treat only the symptoms of an illness, not the cause.
Which of the following does the Hippocratic oath not promise?The oath requires doctors to help their patients to the best of their ability, keep what their patients tell them secret, and not harm anyone purposefully. Additionally, the oath requires doctors to uphold ethical standards and to respect their teachers and colleagues.
In fact, the oath emphasizes that physicians must do their best to help their patients to the best of their ability, which includes diagnosing and treating the underlying cause of an illness, not just the symptoms.
On the other hand, the oath requires doctors to keep what their patients tell them confidential, as trust is an essential element in the physician-patient relationship. The oath also requires doctors to do no harm, which means that physicians must act in the best interest of their patients and avoid causing them any intentional harm.
Therefore the correct option is C.
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rights that individuals in romantic relationships have when they live together
Privacy rights, rights to life and rights to freedom of expression are some of the rights that individuals in romantic relationships have when they live together
What are the rights people have in a relationship?When individuals live together in a romantic relationship, they may have certain legal rights and responsibilities depending on the jurisdiction and the specific circumstances of their relationship. Here are some examples of common rights that individuals in romantic relationships may have when they live together:
Right to privacy: Just like any other individual, people in romantic relationships have a right to privacy in their home. This means that their partner cannot invade their privacy or interfere with their personal space without their consent.
Right to domestic support: Individuals living together in a romantic relationship may have certain legal obligations to provide financial and emotional support to each other. This can include things like paying for household expenses, caring for each other during illness, and providing emotional support during difficult times.
Right to inherit: In some jurisdictions, individuals in a romantic relationship who live together may have inheritance rights if their partner dies without a will.
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If I sell $1,000,000 per year in cars, working at a car
dealership, and I make $70,000 per year in salary, what is my Labor
Productivity for that year?
Hint – you shouldn’t have to calculate anyth
After solving for the values we know that the Labor productivity in the given situation would be 14.28.
What is Labor Productivity?The total volume of production (measured in terms of Gross Domestic Product, GDP) produced per unit of labor (measured in terms of the number of employed workers or hours worked) during the course of a specific time reference period is what is referred to as labor productivity.
The labor productivity equation can be used to determine employee productivity by dividing total output by total input.
Let's imagine your company used 1,500 labor hours to provide products or services worth $80,000. (input).
Divide 80,000 by 1,500 to get 53, which is the labor productivity of your company.
So, in the given situation the labor productivity would be:
LP = 1000000/70000
LP = 14.28
Therefore, after solving for the values we know that the Labor productivity in the given situation would be 14.28.
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Is
economies of scale the same as return to scale? Where in the income
statement (or other financial statements) are you able to compare
the inputs and outputs to assess this changing relationship?
Economies of scale and returns to scale are not the same things. As income statement shows a company's expenses and revenues, it can be utilized to compare inputs and outputs in the operation section.
Economies of scale refer to the cost savings that arise when a firm produces more products, while returns to scale refer to the relationship between input and output in a production process. Hence, they are not the same.
The income statement, often known as the profit and loss statement or statement of operations, is a financial statement that provides a summary of a company's revenues, costs, and profits over a specified period of time. It reveals a company's net income, which is the difference between its revenues and expenses.
Because the income statement shows a company's expenses and revenues, it can be utilized to compare inputs and outputs in the operation section. It aids in the assessment of how a firm's income and expenses change as the amount of goods produced varies over time.
For example, if a company's expenses increase more slowly than its income as it produces more products, it might indicate economies of scale. Conversely, if a company's expenses and income both rise in the same proportion as production rises, it might indicate returns to scale.
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I
need 3 internet site link sources that talk about Haiti Economic
System History
There are several internet site link sources that talk about Haiti's economic system history.
Here are three of them:
1. "Haiti - Economy." Encyclopaedia Britannica, Encyclopædia Britannica, Inc., www.britannica.com/place/Haiti/Economy. This source provides a brief overview of Haiti's economy, including its colonial history, the impact of slavery and the plantation economy, and contemporary economic challenges.
2. "Haiti Economic Update." World Bank, 2020, www.worldbank.org/en/country/haiti/publication/haiti-economic-update-april-2020. This source offers a more in-depth analysis of Haiti's current economic situation, including recent economic developments, key challenges, and policy recommendations.
3. "Haiti's Economic Future: A Q&A with President Jovenel Moïse." Center for Strategic and International Studies, 2019, www.csis.org/analysis/haitis-economic-future-q-president-jovenel-moise. This source provides a recent interview with Haiti's president, Jovenel Moïse, in which he discusses his vision for Haiti's economic development, including his plans to attract foreign investment and promote private sector growth.
The complete question is: I need 3 internet site link sources that talk about Haiti Economic System History
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What does it mean when a person has "limited resources"? When is a resource considered scarce? (Site 1)
When a marketing researcher uses a collection of reports, customer letters, financial statements, and surveys from different departments within her firm, she is using
a. primary data.
b. internal secondary data.
c. business data.
d. external secondary data.
e. sensitivity analysis.
When a marketing researcher uses a collection of reports, customer letters, financial statements, and surveys from different departments within her firm, she is using internal secondary data. The correct option is B.
Internal secondary data refers to information and data that has already been collected by the company and was intended for another purpose. This data is also referred to as in-house data or company data. It is a valuable source of information since it is reliable, easily accessible, and it saves time and money that would have been spent in obtaining new data from external sources. It includes the company's financial statements, customer complaints, feedback and satisfaction surveys, sales reports, inventory levels, purchase orders, customer data, and any other data that a company collects from its day-to-day operations.
Thus, option B is the correct answer.
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suppose that record snows blanket your campus this winter. your friend says this is proof that global warming isn't really occurring. part a what is the flaw in your friend's logic?
The flaw in your friend's logic is that they are confusing weather with climate. Just because there is record snowfall in a particular location does not disprove global warming, which is a long-term trend affecting the entire planet, not just one region or season.
Snowfall is a weather event that can be affected by many factors, including temperature, precipitation, and wind patterns, and is not necessarily indicative of climate change. Global warming is a gradual increase in the overall temperature of the Earth's atmosphere, which is caused by human activities such as burning fossil fuels and deforestation.
It leads to many other environmental changes, including rising sea levels, melting glaciers, and more frequent extreme weather events like droughts, floods, and heat waves.
Therefore, the record snowfall on your campus does not invalidate the overwhelming scientific evidence that global warming is happening and that it is caused by human activity.
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Sample P is granite, an igneous rock. Which of these is NOT a characteristic of igneous rock?
One of characteristics of igneous rocks is that they are formed from the solidification and cooling of magma or lava.
What is solidification?Solidification is the process by which a liquid transforms into a solid state as a result of cooling or compression. During this process, the molecules of the liquid slow down and begin to form a crystalline structure, which results in the formation of a solid. Solidification is a fundamental process in many natural and industrial processes, including the formation of snowflakes, the creation of metallic alloys, and the casting of metal parts. The properties of the resulting solid depend on factors such as the rate of cooling or compression, the composition of the liquid, and the presence of impurities. Understanding solidification is crucial for many industrial processes and materials science applications.
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In order to understand the types of stakeholders that exist atBP, identify one example of an enabling stakeholder, a normativestakeholder, a functional stakeholder, and a diffused stakeholder,and p
In order to understand the types of stakeholders that exist at BP, the following are examples of different types of stakeholders: A good example of an enabling stakeholder is a company that depends on the activities of BP to remain in operation or generate revenue.
Normative Stakeholder - These are stakeholders who base their decisions on ethical or moral considerations. Examples of normative stakeholders at BP include environmental groups and government regulators.
Functional Stakeholders - These are stakeholders whose interests are driven by the functions they perform. Examples of functional stakeholders include the employees of BP or the suppliers of products to the company.
Diffuse Stakeholders - These are stakeholders who are indirectly or potentially affected by the operations of the company. Examples of diffuse stakeholders at BP include the general public and future generations of people. They do not have a direct interest in the company but can still be impacted by its actions.
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Te presentamos la siguiente idea de negocio: "POMADAS PARA ZAPATOS DE
VESTIR" este emprendimiento lo inicio Pepito juntamente con su familia el
año 2020, pero necesita que la ayudemos a definir su propuesta de valor y su
segmento de clientes, para ello aplicaras la estrategia de lienzo de la
propuesta de valor y ayudaras a Pepito a despegar con su emprendimiento.
Para definir la propuesta de valor y el segmento de clients de "Pomadas para zapatos de vestir", podemos utilizar el lienzo de la propuesta de valor.
En primer lugar, la propuesta de valor de este emprendimiento podría ser ofrecer pomadas de alta calidad, que protejan y embellezcan los zapatos de vestir de los clientes. Además, podrían enfocarse en ofrecer una variedad de colores y opciones de personalización para satisfacer las preferencias individuales de cada cliente. El segmento de clientes podría ser personas que usan zapatos de vestir con regularidad, como profesionales, ejecutivos, estudiantes, entre otros. También podrían enfocarse en tiendas de calzado y boutiques de moda que buscan ofrecer productos de alta calidad a sus clientes.
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how does "The Maya developed a complex and accurate calendar system" shows us that they were extremely advanced civilization.
Cer
Answer:
Explanation:
The Mayan calendar system was based on astronomical observations and calculations, which required advanced knowledge of mathematics and astronomy. Additionally, their calendar was used for various purposes, including predicting astronomical events and scheduling agricultural activities, demonstrating their sophisticated understanding of both science and society.
One of the major challenges of good design is to meet current needs while preserving the environment for future generations. Group of answer choices true false
It is TRUE that one of the major challenges of good design is to meet current needs while preserving the environment for future generations.
Creating systems, structures, and products that satisfy the demands of the present generation without compromising the capacity of future generations to satisfy their own needs is the idea behind sustainable design. This necessitates taking into account how design choices will affect the environment and figuring out how to limit waste, lower energy use, and safeguard natural resources. In order for products and systems to be used over an extended length of time without becoming outdated or needing replacement, sustainable design also entails making them robust and adaptive.
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What happens if the economy experiences stagflation?
Stagflation is a situation in which there is inflation and stagnation in the economy at the same time. If the economy experiences stagflation, there are several effects on the economy that would result from this situation.
What happens if the economy experiences stagflation?When an economy experiences stagflation, the following are the effects:
Reduced Investment: Stagflation creates an environment where it becomes difficult for businesses to predict economic conditions in the future. As a result, investors tend to hold back on making investments. They may also divert investment into other countries with more stable economies.
Increased unemployment: Stagflation can cause businesses to reduce their workforce. A decline in investment can cause businesses to reduce production levels, and therefore, lay off workers. Since the demand for goods and services decreases, businesses can’t produce the same amount of goods and services that they once did.
Increase in living costs: Stagflation typically leads to higher prices for goods and services. The demand for these items continues to be high, but the supply remains low. When prices of goods and services increase, people are unable to afford them. The cost of living increases, and people are forced to reduce their spending.
Governments usually take steps to control the inflation by raising taxes or lowering government spending. To combat stagflation, governments should implement policies that stimulate economic growth. These policies may include tax cuts, public works projects, and other programs designed to create jobs and promote economic development.
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Assume the economy is operating at P1Y2.
Which of the following would cause a shift to bring the economy to P3Yf?
Real wages fall.
Productivity increases.
Personal income taxes increase.
Transfer payments decrease.
A major hurricane hits the southeastern United States.
Answer:59695=58893
Explanation: because we use neiten rules which is 5854=7485
laurissa is a new missionary that has just arrived in bolivia to begin her mission. she is from the united states and has never been around bolivian people or experienced their culture. when she arrives, she isn't sure how to greet locals or ask for directions, so she tries to act like the other missionaries around her are acting. she assumes that they know what they are doing since they have been in bolivia for the past year. what is laurissa relying on?
Laurissa is relying on her observation of the other missionaries around her who have been in Bolivia for the past year and whom she assumes to have a knowledge of the language and culture of Bolivia.
Culture is a system of beliefs, values, and customs shared by people in a group or society that guide their behavior and way of life. It is significant because it provides a sense of belonging and identity to the people who share it. Relying is the act of depending on something or someone for assistance, support, or information.
In this scenario, Laurissa is a new missionary who has just arrived in Bolivia to start her mission. She is from the United States and has never been around Bolivian people or experienced their culture. When she arrives, she tries to act like the other missionaries, assuming that they know what they are doing since they have been in Bolivia for the past year. Therefore, Laurissa is relying on the other missionaries around her who have been in Bolivia for the past year.
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match the defense mechanism (denial of reality, fantasy, intellectualization, undoing, or overcompensation) with the following examples. group of answer choices undoing [ choose ] overcompensation a women who feels guilty about insulting her co-worker excessively praises her after each insult. intellectualization a smoker concludes that the evidence linking cigarette use to health problems is scientifically useless. denial of reality [ choose ] fantasy [ choose ]
The defense mechanisms can be matched with the examples as follows:
- Undoing: A women who feels guilty about insulting her co-worker excessively praises her after each insult. This is an example of undoing because the woman is trying to "undo" the negative effects of her insult by excessively praising her co-worker.
- Overcompensation: A smoker concludes that the evidence linking cigarette use to health problems is scientifically useless. This is an example of overcompensation because the smoker is trying to compensate for their unhealthy behavior by denying the evidence linking it to health problems.
- Intellectualization: A person who is in denial of reality may use intellectualization as a defense mechanism. This involves using logical reasoning to explain away or justify their behavior.
- Denial of reality: A person who is in denial of reality may refuse to accept the facts or evidence that contradicts their beliefs or behaviors.
- Fantasy: A person who is in denial of reality may use fantasy as a defense mechanism. This involves escaping from reality by imagining or daydreaming about an alternate reality.
In conclusion, the defense mechanisms can be matched with the examples as follows: undoing with the woman who excessively praises her co-worker, overcompensation with the smoker who denies the evidence linking cigarette use to health problems, intellectualization with a person
who uses logical reasoning to justify their behavior, denial of reality with a person who refuses to accept the facts, and fantasy with a person who escapes from reality through imagination.
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When did the states of the Upper South, like Virginia and Tennessee, secede?
A. When they heard that Britain would give them weapons
B. After South Carolina asked them to
C. After Lincoln asked them to provide troops to fight the South
D. After they were invaded by soldiers from South Carolina
SUBMIT
Answer:
The answer is C
Explanation:
I just learned this last month.
Identification of Additional Competitive Threats for Costco
What are secondary competition of Costco?
One possible secondary competition for Costco is online retailers such as Amazon and Walmart.
While Costco primarily competes in the brick-and-mortar retail space, online retailers like Amazon and Walmart have expanded their offerings to include grocery and household items, which are also key categories for Costco. Additionally, the convenience and accessibility of online shopping may appeal to some consumers who may otherwise prefer shopping in-store at Costco. As a result, Costco may need to continue to focus on differentiating itself through its membership model, bulk offerings, and in-store experience to stay competitive against these online retailers.
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what happened in 1988 that caused such an uproar within the deaf community?
A: The appointment of a non-deaf president to Gallaudet University
B: The death of a deaf suspect while in police custody
C: The establishment of a new deaf university
D: The passage of the new anti-deaf legislation
Answer: A: The appointment of a non-deaf president to Gallaudet University
what happened in 1988 that caused such a stir in the deaf community was the appointment of a non-deaf president to Gallaudet University. Option A is correct.
What are the impacts of the nomination of the non-deaf president?The appointment of Elisabeth Zinser in 1988 caused a relevant uproar among the deaf community, who believe that the president of the only university for the deaf in the world should be a member of the deaf community, a fact seen as a lack of responsibility and social justice.
Therefore, such an appointment led to the development of a wave of protests, where students and faculty members demanded that a deaf person be appointed to the position.
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Answer:
I think the answer is A. I don't know if I am correct
Explanation:
Equitable Bank (EQ) is a Canadian bank which primarily provides residential and commercial real estate lending services, as well as personal banking through its direct banking brand EQ Bank. What different ways can EQ create competitive advantages in environment dominated by big banks (300 words)
EQ Bank can create competitive advantages in an environment dominated by big banks through several strategies.
First, EQ Bank can focus on offering personalized services to their customers. By catering to their customers’ needs, EQ Bank can create loyalty and trust, which can be a competitive advantage. Additionally, EQ Bank can use technology to their advantage.
By investing in the latest technological developments, EQ Bank can provide a streamlined and efficient service to their customers. This can enable them to reduce costs, while also offering improved customer service.
Furthermore, EQ Bank can capitalize on their size. By providing flexible services that are tailored to the needs of their customers, EQ Bank can provide a competitive edge compared to larger banks.
Additionally, EQ Bank can capitalize on their smaller size by providing specialized services such as tailored mortgage rates, higher levels of customer service, and customized products.
Finally, EQ Bank can use marketing and branding strategies to differentiate themselves from the competition. This includes creating a unique and memorable brand image, leveraging digital marketing to reach potential customers, and providing engaging content to build an audience.
In conclusion, EQ Bank can create competitive advantages in an environment dominated by big banks by focusing on personalized services, using technology to their advantage, capitalizing on their smaller size, and using marketing and branding strategies.
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Hurry up pls help me
Answer:
Military
Explanation:
In Feudal Japan, the political power lay with the shoguns, who were similar to military dictators. The emperor was a figurehead who had no rule power. The samurai were the warriors of the shoguns, similar to European knights.
suppose you decide you've had enough of college classes - you aren't learning anything, and classes are expensive. You make the decision that are going to open a Domino's franchise with the money you've saved for school. Two years after you buy the franchise, things aren't going well. It seems like you picked the wrong location for your store and you hate the smell of pizza. But since youve already spent most of your college savings on the franchise, you decide to spend a litle more on a new advertising campaign that wil make people in your area aware of your store. You are using which of the following biases?
The bias at play in the given question here is the sunk cost fallacy. Despite not wanting to, people are frequently persuaded to take action because of the sunk cost fallacy.
What does the sunk cost bias entail?The commitment bias, in which we persist in supporting our previous choices despite fresh information suggesting they aren't the optimal course of action, is related to the sunk cost fallacy. We forget that the time, money, or effort we have already expended won't be reimbursed.
As a result, one type of cognitive bias is the sunk cost effect. When you've already invested so much money, time, or effort in a problem, the sunk cost fallacy leads you to believe that you should keep doing the same. Because you don't want to see your resources wasted, it might be tough to leave a position once it has been seen as a sunk cost.
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When a nation is running a current account deficit, it obtains the funds it needs through __________.
Group of answer choices
a. financial outflows
b. financial inflows
c. real capital inflows
d.real capital inflows
"When a nation is running a current account deficit, it obtains the funds it needs through financial inflows." Option B is correct.
What is the Current Account Deficit?A current account deficit occurs when a nation is importing more goods and services than it is exporting, resulting in a net outflow of domestic currency. In this scenario, a country's domestic spending on foreign products exceeds its income from foreign markets.
When a country has a current account deficit, it must acquire the funds it needs to pay for these net imports, which can be accomplished through a variety of methods, such as foreign borrowing, overseas investment, or the sale of domestic assets.
What are financial inflows?Financial inflows, in general, are funds that enter a country's economy, often as a result of investment, speculation, or trade. These can come in the form of foreign investment in domestic businesses, the purchase of domestic financial assets like bonds or stocks, or loans from foreign sources. A current account deficit is typically financed by these inflows, which are used to pay for net imports that would otherwise drain a nation's financial reserves.
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A company invested 100,000 to purchase a new equipment that will be used to increase the profit but it is expected to be realized after two years from the year of purchase. The said profit was 50,000 per year for four years. Three years later, the company purchased an add-on to the machine worth 75,000. Due to that add on, the profit increased to 85,000 and lasted for five more years. If the company decided to sell that equipment for 8000 and MARR is 15% per year, what is the Present Worth, Future Worth, Annual Worth?
The Present Worth, Future Worth, Annual Worth are $574,762, $4,377,731, and -$616,426 respectively.
The problem requires the Present Worth (PW), Future Worth (FW), and Annual Worth (AW) calculations of an investment. The given data is:
Initial investment = $100,000
Profit from new equipment (for the first 4 years) = $50,000 per year
Profit from new equipment after add-on (for the next 5 years) = $85,000 per year
Add-on cost = $75,000
Sale price of equipment = $8,000
MARR = 15% per year
The time period of the investment is 14 years (2 years for the first equipment and 12 years for the add-on equipment).
PW (Present Worth)Present worth of cash inflows = Initial investment + Profit from new equipment (for the first 4 years) + Profit from new equipment after add-on (for the next 5 years)
PV of profit from new equipment for the first 4 years = (P/A, 15%, 4) x $50,000 = 3.771 x $50,000 = $188,550
PV of profit from new equipment for the next 5 years = (P/A, 15%, 5) x $85,000 = 3.352 x $85,000 = $284,820
Present value of cash inflows = $100,000 + $188,550 + $284,820= $573,370
PV of salvage value = (F/P, 15%, 14) x $8,000 = 0.174 x $8,000 = $1,392
Present Worth = $573,370 + $1,392= $574,762 (approx)
FW (Future Worth)Future worth of cash inflows = PV of cash inflows x (F/P, 15%, 14) = $574,762 x 7.611= $4,377,731
AW (Annual Worth)AW = (PW - FW) / (A/P, 15%, 14)
AW = ($574,762 - $4,377,731) / 6.232= -$616,426 (approx)
The negative value of Annual Worth indicates that the investment is not viable. Therefore, the investor must not invest in this equipment.
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