A company is considering investing in a project that costs $300,000. The company uses straight-line depreciation and estimates that the project has a useful life of 10 years with no salvage value. This project is expected to produce NET INCOME of $42,000 each year. Assuming a minimum rate of return of 10%, indicate the NET PRESENT VALUE of this project. a. $41,928
b. $258,072
c. $120,000
d. $142,409
Answers
Answer:
NPV = $-41,928.18
Explanation:
Net present value is the present value of after tax cash flows from an investment less the amount invested.
NPV can be calculated using a financial calculator:
Cash flow in year 0 = $-300,000
Cash flow each year from year 1 to 10 = $42,000
I = 10%
NPV = $-41,928.18
To find the NPV using a financial calacutor:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. After inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.
3. Press compute
I hope my answer helps you
Answer:
b. $258,072
Explanation:
PERIOD CASH FLOW NET PRESENT VALUE
Year 1 $42,000
Year 2 $42,000
Year 3 $42,000
Year 4 $42,000
Year 5 $42,000
Year 6 $42,000
Year 7 $42,000
Year 8 $42,000
Year 9 $42,000
Year 10 $42,000
Total $258,071.83
Related Questions
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After extrapolating the results of performing substantive tests on a sample of accounts from the accounts receivable subsidiary ledger, Allen CA concluded that the accounts receivable balance was materially misstated. In fact, the balance was materially correct. This situation illustrates the risk of:A.Incorrect rejection.B. Incorrect acceptance.C. Assessing control risk too low.D. Assessing control risk too high
Sanaa recently made partner at her law firm, and she is rewarding herself with the purchase of the new car. she told a coworker, "the volvo has nine airbags but the cadillac drives so smoothly." sanaa is currently in which stage of the purchase decision process?
Identify each of the following items as: (a) an asset, (b) a liability, (c) revenue, (d) an expense, or (e) a dividend: 1. Amounts due from customers 2. Amounts owed to suppliers 3. Cash on hand 4. Cash paid to stockholders 5. Cash sales 6. Equipment 7. Note payable owed to the bank 8. Rent paid for the month 9. Sales commissions paid to salespersons 10. Wages paid to employees
a. How much money will they have accumulated 30 years from now?
b. If the goal is to retire with $800,000 savings, how much extra do they need to save every year?
Answers
Answer:
a. $408,334.39
b. $3,457.40
Explanation:
r = rate per period = 8% = 0.08
P = Initial Value of Gift = $10,000
t = time = 30 - 5 = 25, As received after 5 years.
A = $10,000 x 6.8485
A = $68,484.75
P = Periodic Payment = $3,000
a.
n = number of periods = 30
FV of annuity = $3,000 x 113.2832
FV of annuity = $339,849.63
Accumulated value of money can be calculated as follows;
$68,484.75 + $339,849.63
$408,334.39
b.
If they wish to retire with $800,000 savings, they need to save additional amount of money every year to provide additional amount of money, as follows;
$800,000 - $68,484.75
$731,515.24
The extra annual savings can be calculated as follows;
$731,515.24 = P x 113.28
Divide the above equation by 113.28 we get;
P = $6,457.40
They are already paying $3,000, So the extra saving they need make every year is calculated as follows;
$6,457.40 - $3,000
$3,457.40
Answers
Answer:
actual variable expenses were higher than the flexible budget variable expenses.
Explanation:
A flexible budget projects budget data (revenue and expenses) based on various or multiple levels of business activities, such as production sales.
Also, a flexible budget variance gives the difference between the output resulting from a flexible budget and the actual outputs.
A variance can either be favorable or unfavorable. An unfavorable flexible budget variance for variable expenses would indicate actual variable expenses were higher than the flexible budget variable expenses.
Hence, If a company's actual net income is lower than it's planned, the variance is said to be unfavorable. Thus, higher costs and expenses would result in a unfavorable variance while higher revenues result in a favorable variance.
A quantity variance and price variance can be used to measure the direct materials flexible budget variance.
B. The Aggregate Demand curve shifts to the left.
C. The Aggregate Demand curve shifts to the right.
D. The Short Run Aggregate Supply curve shifts to the left.
Answers
Answer:
A - The Short Run Aggregate Supply curve shifts to the right.
Explanation:
The Short Run Aggregate Supply curve plots aggreagrate price against aggreagrate quantity.
If producers believe a recession is imminent and they reduce the amount of machinery purchased, the quantity supplied would reduce shifting the Short Run Aggregate Supply curve to the left.
I hope I was able to help you.
Answers
Answer:
Escrow account
Explanation:
An escrow account is a type of account in which a third party helds a certain amount of money while two parties complete a transaction. This is used to protect people from fraud when they are involve in transactions like purchasing a house as both parties can trust that the money is safe and the third party only provides the funds when they agree with everything and are happy with the results.
According to this, the answer is that if a purchasing agent must put up a cash deposit for construction services, for security purposes, instead of giving it directly to the contractor, he or she may insist that it be placed in an escrow account because the money would be safe and it would be maintained by a third party that will provide the funds when the services are complete.
Answers
Answer: $0.60
Price per loaf: $2
Discount given for its bread at the end of the day= 70%
Solution:
Salvage value is the estimated resale value of a product at the end of its useful life. Since theuseful life of the loaf is 1 day and it was sold at the end of the day at 70%off, the salvage value is
$2 × (1 - 70%)
$0.60.
Final answer:
The salvage value of the bread from Bakery A at the end of the day, following a 70% discount, is $0.10 per loaf. This is calculated by subtracting the cost to make the bread ($0.50) from the discounted selling price ($0.60).
Explanation:
The salvage value of the bread from Bakery A can be calculated by subtracting the cost of production from the discounted selling price. The initial selling price of the bread is $2.00, and the cost to make a loaf is $0.50. However, at the end of the day, Bakery A gives a 70% discount on its bread. So, the discounted selling price is now 30% of the initial price, which is $2.00 * 0.30 = $0.60.
Given that the cost to make the bread is $0.50, the salvage value of the bread is the discounted selling price of $0.60 minus the cost to make the bread which is $0.50. So, the salvage value is $0.60 - $0.50 = $0.10.
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Answers
Maria’s utility-maximizing point is: 3 salads, 6 vegetarian burgers. Therefore, the correct option is C.
Given information: Each salad costs $6 and each vegetarian burger costs $3. Maria’s weekly food budget is $36.
3 salads cost will be:
= $18
6 vegetarian burgers cost:
= $18
Total cost: $18 + $18 = $36
When Maria is consuming 3 salads and 6 vegetarian burgers, she is spending $36 which is equal to her budget i.e. $36. So, it is Maria’s utility-maximizing point.
The happiness or benefit that a person obtains from consuming a good, using a service, or participating in an activity is referred to as utility. It stands for the arbitrary evaluation of how highly a person values or likes a given option or choice.
Thus, the ideal selection is option C.
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The complete question might be:
For Lunch, Maria Eats Only Salads Or Vegetarian Burgers. Her Weekly Food Budget Is $36. Each Salad Costs $6 And Each Vegetarian Burger Costs $3. When Deciding How Much Of Each Good To Buy, Maria Knows That 2 Salads And 4 Vegetarian Burgers Will Give Her A Utility Of 8. Maria’s Utility-Maximizing Point Is: A. 6 Salads, 1 Vegetarian Burger B. 4 Salads, 6
32. For lunch, Maria eats only salads or vegetarian burgers. Her weekly food budget is $36. Each salad costs $6 and each vegetarian burger costs $3. When deciding how much of each good to buy, Maria knows that 2 salads and 4 vegetarian burgers will give her a utility of 8. Maria’s utility-maximizing point is:
A. 6 salads, 1 vegetarian burger
B. 4 salads, 6 vegetarian burgers
C. 3 salads, 6 vegetarian burgers
D. 2 salads, 8 vegetarian burgers