(i) How much money is needed for the down payment per acre? a. $100 &

Question

Question

Period 0 1.500 1 2 31 45575063 500 Component NCE Lo LMPT Mol 400 -55 -65 10 65 9 -65 8.75 -55 8.5 -10 1 3.756. 5 -350 193 NcF

(i) How much money is needed for the down payment per acre?

a. $100 b. $400

c. $500 d. None of the answers are correct

(ii) What is the cash deficit or surplus in the 1^st year?

a. Surplus of $10 b. Deficit of $10

c. Surplus of $45 d. None of the answers are correct

(iii) How much cash deficit or surplus is in the 2^nd year?

a. Surplus of $1 b. Deficit of $1

c. Surplus of $57 d. None of the answers are correct

(iv) In which years are there potential problems with financial feasibility?

a. Both 0 and 1 b. Only 0

c. Only 2 d. None of the answers are correct

Answer 1

Answer #1

I) c ( in period 0 total cash outflow is $500 which is initial down payment for the land )

II) b (In the first year net cash out flow is $65 and inflow is $55 hence $55 - $65 = -$10 i.e. deficit of $10)

III) a (In the 2nd year net cash out flow is $65 and inflow is $66 (57+9) hence $66- 65 = 1 i.e.Surplus of $1)

IV) a (Both 0 and 1 has deficit in cash flow hence in these two years there will be potential problem of financial feasibility)

Answer 2

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