Iron Works International is considering a project that will produce annual cash flows of $38,200, $46,900, $57,600, and $23,100 over the next four years, respectively. What is the internal rate of return if the project has an initial cost of $112,800

Answers

Answer 1

Answer:

18.11%

Explanation:

The internal rate of return is the discount rate that equates the after tax cash flows from an investment to the amount invested.

IRR can be calculated using a financial calculator

Cash flow in year 0 = $-112,800

Cash flow in year 1 = $38,200

Cash flow in year 2 = $46,900

Cash flow in year 3 =$57,600

Cash flow in year 4 =$23,100

IRR = 18.11%

To find the IRR 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 IRR button and then press the compute button.

Related Questions

Suppose Compco Systems pays no dividends but spent $ 5.18 billion on share repurchases last year. If Compco's equity cost of capital is 11.5 %, and if the amount spent on repurchases is expected to grow by 7.9 % per year, estimate Compco's market capitalization. If Compco has 5.8 billion shares outstanding, to what stock price does this correspond? Compco's market capitalization will be $ nothing billion. (Round to two decimal places.) Compco's stock price will be $ nothing. (Round to the nearest cent.)
It costs $1,200 to produce 50 pounds of a chemical and it costs $2,200 to produce 150 pounds. The chemical sells for $15 per pound x is the amount of chemical; y is in dollars. a. Find the cost function. b. What is the fixed cost? c. How many pounds must be sold to break even? d. Find the cost and revenue at the break-even point.
Ultra Day Spa provided $94,850 of services during Year 1. All customers paid for the services with credit cards. Ultra submitted the credit card receipts to the credit card company immediately. The credit card company paid Ultra cash in the amount of face value less a 1 percent service charge. Required a. Show the credit card sales (Event 1) and the subsequent collection of accounts receivable (Event 2) in a horizontal statements model like the one shown next. In the Statement of Cash Flows column, indicate whether the item is an operating activity (OA), investing activity (IA), or financing activity (FA). (Enter any decreases to account balances with a minus sign. Not all cells in the "Statement of Cash Flows" column may require an input - leave cells blank if there is no corresponding input needed.)
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Acitelli Corporation, which applies manufacturing overhead on the basis of machine-hours, has provided the following data for its most recent year of operations.Estimated manufacturing overhead $ 351,960
Estimated machine-hours 8,400
Actual manufacturing overhead $ 352,960
Actual machine-hours 8,460
The estimates of the manufacturing overhead and of machine-hours were made at the beginning of the year for the purpose of computing the company's predetermined overhead rate for the year.
The applied manufacturing overhead for the year is closest to:_________.
A. $357,012
B. $354,474
C. $355,489
D. $352,951

Answers

Answer:

B. $354,474

Explanation:

The Overheads that are initially included in Work In Process before determination of Actual Overheads are called Applied Overheads.

Applied Overheads = Predetermined overhead rate × Actual level of Activity.

Thus said we need to first determine the Predetermined overhead rate :

Predetermined overhead rate = Budgeted Overheads / Budgeted Activity

= $ 351,960 / 8,400 machine hours

= $41.90 per machine hour

Therefore,

Applied Overheads = $41.90 × 8,460 machine hours

= $354,474

Conclusion :

The applied manufacturing overhead for the year is closest to: $354,474

Use the following words to fill in the blanks in the statements below about the market for loanable funds. Choose from: demanded, supplied; left, right; higher, lowera. A change that makes people want to save less will shift the loanable funds _______ line to the ______. The resulting new equilibrium in the market for loanable funds would be a ______ interest rate and a ______ quantity of funds saved and invested.

Answers

Answer:

supplied , left

higher, lower

Explanation:

When people start consuming more and saving less, this would result into lower quantum of funds parked with banks and financial institutions. Due to shortage of funds, the supply of loanable funds in the market would get reduced i.e the supplied line would shift to the left.

This would raise the equilibrium level for loanable funds which would lead to a higher rate of interest i.e funds will be loaned only at a higher rate of interest. Due to this, the quantity of funds saved and invested would be lower.

Based on murder rates in the United States, an Associated Press story reported that the probability that a newborn child has, of eventually being a murder victim, is 0:0263 for nonwhite males, 0:0049 for white males, 0:0072 for nonwhite females, and 0:0023 for white females. (a) Find the conditional odds ratio between race and whether a murder victim, given gender. Interpret your results. Do these variables exhibit homogeneous association? (b) Half the newborns are of each gender, for each race. Find the marginal odds ratio between race and whether a murder victim.

Answers

Answer:

The odds of being murder victims among nob white males are 5.485 times as compared to white males.

Explanation:

See attachment for explanation.

Debt contracts:A) are agreements by the borrowers to pay the lenders fixed dollar amounts at periodic intervals.B) have a higher cost of state verification than equity contracts.C) are used less frequently to raise capital than are equity contracts.D) never result in a loss for the lender.

Answers

Answer:

A) are agreements by the borrowers to pay the lenders fixed dollar amounts at periodic intervals.

Explanation:

Debt contracts are formed when a borrower agrees to repay a lender. Convenants are usually used to settle disputes between the borrower and the lender. Convenants limits the the extent to which debtors take risks, dividend payouts, claim dilution, and other activities that can cause the lender to lose money.

Debt contracts are obtained by businesses to finance short term operations activities or long term expansion plans.

Answer: A) are agreements by the borrowers to pay the lenders fixed dollar amounts at periodic intervals.

Explanation: A debt contract is an agreement in which a borrower agrees to repay funds borrowed to a lender. Usually classes into a short-term and long-term debt contracts, they are used in raising money for working capital or capital expenditures and in return for lending the money, the individuals or institutions become creditors and receive a promise that the capital and interest on the debt will be repaid (usually in fixed amounts over a period of time) in accordance with the terms of the contract. Debt contracts include detailed provisions on collateral involved, interest rate, the schedule for interest payments, and the timeframe to maturity if applicable.

asserine runs a tapestry shop in Rome, weaving historical images for the tourism industry. Lately, her arthritis has gotten worse, so she brings in several young workers and begins to teach them how to weave her images. Which factor of production did Passerine enhance?

Answers

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Answer: labor

Explanation:

Columbia Products produced and sold 900 units of the company's only product in March. You have collected the following information from the accounting records Sales price (per unit)
Manufacturing costs $ 448
Fixed overhead 50,400
Direct labor (per unit) 35
Direct materials (per unit) 112
Variable overhead (per unit) 70 (for the month)
Marketing and administrative costs
Fixed costs (for the month) 67,500
Variable costs (per unit) 14
Required:
Compute the following:____
1. Variable manufacturing cost per unit $217
2. Full cost per unit
3. Variable cost per unit
4. Full absorption cost per unit.
5. Prime cost per unit.
6, Conversion cost per unit.
7. Profit margin per unit
8. Contribution margin per unit
9. Gross margin per unit

Answers

Answer:

Results are below.

Explanation:

Giving the following information:

Units produced and sold= 900

Sales price (per unit) $448

Manufacturing costs:

Fixed overhead 50,400

Direct labor (per unit) 35

Direct materials (per unit) 112

Variable overhead (per unit) 70 (for the month)

Marketing and administrative costs:

Fixed costs (for the month) 67,500

Variable costs (per unit) 14

a. Variable manufacturing cost= 35 + 112 + 70= $217

b. Total cost:

Total variable cost= (217 + 14)*900= 207,900

Total fixed cost= 50,400 + 67,500= 117,900

Total cost= $325,800

Total cost per unit= 325,800/900= $362

c. Total variable cost= 217 + 14= $231

d. The absorption costing method includes all costs related to production, both fixed and variable.

Absorption cost= 217 + (50,400/900)= $273

e. Prime cost= direct material + direct labor

Prime cost= 112 + 35= $147

f. Conversion cost= direct labor + unitary variable overhead

Conversion cost= 35 + 70= $105

g. Profit margin= selling price - total unitary cost

Profit margin= 448 - 362= $86

h. Contribution margin per unit= selling price - total unitary variable cost

Contribution margin per unit= 448 - 231= $217

j. Gross margin per unit= Selling price - absorption cost per unit

Gross margin per unit= 448 - 273= $175

Final answer:

The computations show that Columbia Products incurs a loss per unit sold and that manufacturing costs and overheads figure significantly into the total cost per unit. The company needs to increase sales price or decrease costs to attain a positive profit margin.

Explanation:

Here's how to calculate the required costs:

Variable manufacturing cost per unit is already given as $217.
Full cost per unit is the sum of all costs, both fixed and variable, divided by the number of units - ($50,400 + $67,500 + 900 * ($217 + $14)) / 900 = $490.
Variable cost per unit includes both manufacturing cost and marketing/administrative cost - $217 + $14 = $231.
Full absorption cost per unit considers all manufacturing costs - both variable and fixed - so ($50,400 + 900 * $217) / 900 = $364.
The Prime cost per unit is the sum of direct labor and direct materials - $35 + $112 = $147.
Conversion cost per unit is direct labor plus variable overhead - $35 + $70 = $105.
The Profit margin per unit is sales price per unit minus all costs per unit - $448 - $490 = -$42, which indicates a loss rather than a profit.
Contribution margin per unit is sales price per unit minus variable costs per unit - $448 - $231 = $217.
Gross margin per unit is sales price per unit minus variable manufacturing cost per unit - $448 - $217 = $231.

Learn more about Cost Calculations here:

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