BUSINESS COLLEGE

The project is expected to generate the following net cash flows: Year Cash Flow
Year 1 $350,000
Year 2 $475,000
Year 3 $400,000
Year 4 $475,000

Which of the following is the correct calculation of project Delta’s IRR?

A. 5.01%
B. 5.51%
C. 4.26%
D. 6.01%

Answers

Answer 1

Answer:

Answer:

Correct option is A 5.01%

Explanation:

Let irr be x%

At irr,present value of inflows=present value of outflows.

1,500,000=350,000/1.0x+475,000/1.0x^2+400,000/1.0x^3+475000/1.0x^4

Hence x=irr=5.01%(Approx).

Related Questions

Medicaplus, a pharmaceutical company, is finding it difficult to track and locate slow moving medicines. pharmaceutical distributors have been complaining about the time it takes for their orders to arrive. one technology that can be used effectively to shorten this waiting period, locate, and track items easily is:
Harper, Inc. acquires 40 percent of the outstanding voting stock of Kinman Company on January 1, 2017, for $210,000 in cash. The book value of Kinman’s net assets on that date was $400,000, although one of the company’s buildings, with a $60,000 carrying amount, was actually worth $100,000. This building had a 10-year remaining life. Kinman owned a royalty agreement with a 20-year remaining life that was undervalued by $85,000. Kinman sold inventory with an original cost of $60,000 to Harper during 2017 at a price of $90,000. Harper still held $15,000 (transfer price) of this amount in inventory as of December 31, 2017. These goods are to be sold to outside parties during 2018. Kinman reported a $40,000 net loss and a $20,000 other comprehensive loss for 2017. The company still manages to declare and pay a $10,000 cash dividend during the year. During 2018, Kinman reported a $40,000 net income and declared and paid a cash dividend of $12,000. It made additional inventory sales of $80,000 to Harper during the period. The original cost of the merchandise was $50,000. All but 30 percent of this inventory had been resold to outside parties by the end of the 2018 fiscal year. Prepare all journal entries for Harper for 2017 and 2018 in connection with this investment. Assume that the equity method is applied.
The Refining Department of SweetBeet, Inc. had 74,000, tons of sugar to account for in July. Of the 74,000 tons, 42,000 tons were completed and transferred to the Boiling Department, and the remaining 32,000 tons were 60% complete. The materials required for production are added at the beginning of the process. Conversion costs are added evenly throughout the refining process. The weightedminus−average method is used. Calculate the total equivalent units of production for direct materials.
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The overhead controllable variance is the difference between a. the actual overhead and the overhead applied to production.
b. actual overhead and budgeted overhead based on standard hours allowed.
c. budgeted overhead based on standard hours allowed and budgeted overhead based on actual hours worked.
d. budgeted overhead based on standard hours allowed and the overhead applied to production.

Answers

Answer: Between actual overhead and budgeted overhead based on standard hours allowed---- B

ExplanatioN: The controllable variance is defined as the difference between actual expenses or overhead incurred and the budget overhead allowance based on standard hours allowed for work done. The variance is unfavorable controllable variance If the actual overhead is greater than the budgeted overhead based on standard hours allowed for work done and is termed favorable controllable variance if the opposite occurs ie actual overhead being less than budgeted overhead based on standard hours allowed for work to be done.

Earnings available to common shareholders are defined as net profitsSelect one:a. after taxes.b. after taxes minus preferred dividends.c. after taxes minus common dividends.d. before taxes.

Answers

Answer:

The correct answer is b. after taxes minus preferred dividends.

Explanation:

Net profit:Add all the revenues of the firm and deduct all the expenses of the firm. If the amount come in positive, the firm earns profit else suffered loss.

In mathematically,

Net profit = Sales revenue - all expenses

The earning which is available to shareholders is net profit after paying preference dividend to preference shareholders.

As first we have to pay the dividend to preference shareholders then we distribute the income to equity shareholders.

In mathematically,

EBIT - taxes - Preferred dividend

Hence, the correct option is b. After taxes minus preferred dividends.

Hiring managers should automatically preclude a candidate with a disability if they appear to be unable to do the job.True or false?

Answers

Answer:

True

Explanation:

I believe it's true. If we have a job opening for sales personnel and candidate is physically unable to walk or drive, then yes we can exclude that candidate. But once hiring manager is sure of the fact that disability will render that candidate unable to work then manager can preclude that candidate.

Treynor Pie Company is a food company specializing in high-calorie snack foods. It is seeking to diversify its food business and lower its risks. It is examining three companies—a gourmet restaurant chain, a baby food company, and a nutritional products firm. Each of these companies can be bought at the same multiple of earnings. The following represents information about all the companies. Company Correlation with Treynor Pie Company Sales ($ millions) Expected Earnings ($ millions) Standard Deviation in Earnings ($ millions) Treynor PieCompany + 1.0 $ 170 $ 8 $ 2.0 Gourmet restaurant + .4 64 8 1.3 Baby food company + .4 53 5 1.8 Nutritionalproducts company − .7 71 6 3.6 a-1. Compute the coefficient of variation for each of the four companies

Answers

Answer:

The coefficient of variation for each of the four companies is:

- Treynor Pie Company = 0.25 (2/8)

- Gourmet restaurant = 0.16 (1.3/8)

- Baby food Company = 0.36 (1.8/5)

- Nutritional products Company = 0.16 (1/6)

Explanation:

In finance, the coefficient of variation is a statistical measure that represents the ratio of the standard deviation and the mean of a data series related to the return on investment. It allows investors to determine how much volatility, or risk, is assumed in comparison to the amount of return expected from investments. The lower the ratio of the standard deviation to mean return, the better risk-return trade-off.

Formula: CV=σ/μ

Where:

σ = standard deviation

μ = mean

The future of cities in the United States and in other countries will be determined by their ability to benefit from the _________________ and to minimize or counterbalance the ______________________.

Answers

Answer:

The correct answer is letter "B": Economies of agglomeration; corresponding diseconomies.

Explanation:

Economies of agglomeration refer to a type of economy in which companies are located one close to another to take advantage of their core competencies. This economic structure typically helps businesses to reduce relocation and delivery costs increasing their profits but in some other cases, the costs could increase if some of the firms lost their economies of scale.

Thus, metropolises in the U.S. must find ways to boost the benefit of economies of agglomeration minimizing the negative effects of the diseconomies of scale in which some firms might fall.

Robin Corporation retires its $800000 face value bonds at 104 on January 1, following the payment of annual interest. The carrying value of the bonds at the redemption date is $829960. Required:
A) The entry to record the redemption will include __________.
O a debit of $32000 to Premium on Bonds Payable.
O debit of $2040 to Loss on Bond Redemption.
O credit of $32040 to Premium on Bonds Payable.
O credit of $2040 to Loss on Bond Redemption.

Answers

Answer:

The correct option is debit of $2040 to Loss on Bond Redemption

Explanation:

The unamortized premium on the bonds at redemption date=carrying value-face value

carrying value is $829,960

face value is $800,000

unamortized premium=$829,960-$800,000=$29,960

cash paid on redemption=$800,000*104%=$832,000.00

The appropriate entries would a credit to cash of $ 832,000 while face value is debit to bonds payable and also the unamortized premium is debited to premium on bonds payable

loss on retirement=$832,000-$829,960=$2040

The loss is debited to loss on bond redemption

Final answer:

The correct answer is a debit of $2040 to Loss on Bond Redemption, as the amount paid to redeem the bonds exceeded their carrying value by this amount.

Explanation:

Robin Corporation retired its bonds at 104% of their face value, which implies the bonds were bought back for $832,000 ($800,000 x 1.04). The bonds had a carrying value of $829,960. The difference between the redemption price and the carrying value caused a loss on bond redemption of $2,040 ($832,000 - $829,960).

Therefore, the entry to record the redemption of Robin Corporation's bonds will include a debit of $2040 to Loss on Bond Redemption. This shows that the company experienced a financial loss due to the cost of redeeming the bonds being higher than their book value.