Thomas Edison State College Capital investment and PVAF Worksheet Answer the questions below. Open ended questions must be at 100 words. APA Why is there

Thomas Edison State College Capital investment and PVAF Worksheet Answer the questions below. Open ended questions must be at 100 words.

APA

Why is there a need for capital investment and what costs need to be considered when developing a capital budget?
Discuss the costs associated with capital budgeting and how they impact business decisions.
What are the differences between mutually exclusive, non-mutually exclusive, and capital rationing decisions?
Kay Sadilla is considering investing in a franchise that will require an initial outlay of $75,000. She conducted market research and found that after-tax cash flows on the investment should be about $15,000 per year for the next 7 years. The franchiser stated that Kay would generate a 20 percent return. Her cost of capital is 10 percent.
Find the following:
the PVB
the PVC
the NPV
the IRR (Hint: Use interpolation, IRR is between 8 percent and 10 percent.)
The LJB Company must replace a freezer and is trying to decide between the following two alternatives:

Freezer A

Freezer B

Investment required

$29,000

$25,000

Annual electric bill

$3,000

$4,000

Salvage value

$6,000

$5,000

Project life

11 years

11 years

The LJB Company’s cost of capital is 8 percent.

Which investment provides BJ Company with the lowest total cost?

6..How can a business owner identify risk exposure and what can be done to avoid certain risks or transfer them to another party?

7..What is the difference between a contribution and a benefit-oriented retirement plan?

8.What is the difference between a mutual fund and a mutual fund family?

9.How may a small-business owner plan for the use, conservation, and transfer of wealth as efficiently as possible?

10.John Fisher a married, 40-year-old business owner with two children (ages 16 and 10) comes to you with $1,000 a month to invest. This money is in excess of his contribution to his company pension plan.

a.Discuss the steps you would follow in advising John in setting up his retirement strategy.

b.Discuss the strategy you would use in choosing insurance and investment products for John and the products you would select assuming John’s risk tolerance to be of a moderate level and all family members to be in good health.