GCU.FIN504.Week 1 Problem Set - P1-1 A B C Unlimited...

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P1-1 A Unlimited Liability B Unlimited Liability C Limited Liability, she cannot lose more than she invested P1-3 A Total Cash Inflow $450+$4500 = $4,950 Total Cash Outflow $1,000+$500+$800+$355+$280+$1200+$222 = $4,357 B Net Cash Flow $4,950-$4,357 = $593 C D P1-4 A Marginal benefits of New Robotics - Marginal benefits of original robotics = $560,000 - $400,000 = $160,000 B Marginal cost of new robotics - Sales Price of Current Robotics = Marginal $220,000 - $70,000 = $150,000 C Net benefits of New Robotics = Marginal benefits of proposed robotics - M $160,000 - $150,000 = $10,000 D Ken Allen should recommend the new robotics be used on the heavy truck E P1-5 A B C If Jane is facing a shortage, she could cut back on discretionary items like clothing, dining out… If Jane has a surplus in August she should compare cash flows to other months to see if August cash flows are consistent. This will allow Jane to plan ahead so that she does not face investment risk but rather save the $593 in a money market security. If she doesn't need the net cash flow to pay bills she should invest in a diversified portfolio. Ken Allen should consider if there will be additional training necessary with the new robotics, if even better robotics may be available in a short while, and what will be the energy consumption of the new robotics. In this incident the employee is being compensated for unproductive time.

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