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NEW QUESTION: 1
The Mike & Laurie Consulting Group Inc. is trying to decide which computer system to purchase. They can purchase state-of-the-art equipment for $20,000, which they expect to generate cash flows of $6,000 at the end of each of the next 6 years. Alternatively, they can spend $12,000 for equipment that can be used for 3 years and generates cash flows of $6,000 at the end of each year. If the company'scost of capital is 10 percent and both "projects" can be repeated indefinitely, then what is the equivalent annual annuity (EAA) of the more profitable strategy?
A. $1,174.62
B. $2,423.74
C. $6,131.56
D. $1,666.67
E. $1,407.85
Answer: E
Explanation:
Explanation/Reference:
Explanation:
First, compute the NPV of each project over its initial life. The relevant cash flows for the state-of-the- art equipment are CF(0) = -$20,000 and CF(1-6) = $6,000. Discounting at 10 percent yields NPV = $6,131.56.
The relevant CFs for the less advanced equipment are CF(0) = -$12,000 and CF(1-3) = $6,000.
Discounting again at 10 percent yields NPV = $2,921.11. Next, find the EAA of each project as follows:
EAA for the state-of-the-art equipment: N = 6; I/YR = 10; PV = -6,131.56, FV = 0; solve for PMT = EAA
$1,407.85. EAA less advanced: N = 3; I/YR = 10; PV = $2,921.11; FV = 0; solve for PMT = EAA
$1,174.62.
Thus, the state-of-the-art project is more profitable.

NEW QUESTION: 2
Refer to the exhibit.

What are two effects of the given configuration? (Choose two.)
A. The router will manually summarize the 192.168.12.0127 network
B. The router will fail to form neighbor adjacencies over all EIGRP interfaces except F0/0
C. The router will install the 192.168.12.0/27 network into its EIGRP topology table
D. Auto-summarization will be enabled to the FO/O interface
E. The router will fail to form neighbor adjacencies over interfaces F0/0
Answer: C,E

NEW QUESTION: 3
You have an invoice for $200 USD and a credit memo for $225 USD. In other words, the credit amount
exceeds the invoice amount. If you enable the option to apply credits up to zero amount payment, then
how will the invoice and credit memo be paid?
A. Neither the invoice nor the credit memo are included in the payment process request because the
credit reduces the payment amount below zero.
B. Both the invoice and the credit memo are selected and the Payment Process Request requires
attention.
C. Both the invoice and the credit memo are paid and a refund of $25 USD is created.
D. Both the invoice and credit memo are included in the payment process request for a payment amount
of $0 USD. The credit memo is partially paid with a remaining credit of $25 USD.
Answer: D

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