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Alik [6]
2 years ago
9

A capital budgeting project is expected to have the following cash flows: Year Cash Flows 0 -$850,000 1 $300,000 2 $400,000 3 $5

00,000 What is the project's net present value at an 18% required rate of return
Business
1 answer:
diamong [38]2 years ago
8 0

The capital budgeting project's net present value at an 18% required rate of return is <u>($4,200).</u>

<h3>What is the net present value?</h3>

The net present value represents the net discounted value of cash inflows after subtracting the present value of cash outflows.

The net present value can be determined by determining the present values of cash inflows and outflows and netting the two values.

<h3>Data and Calculations:</h3>

Required rate of return = 18%

Project period = 3 years

Year    Cash Flows    PV Factor        Present Value

0         -$850,000            1                    -$850,000 ($850,000 x 1)

1           $300,000         0.847               $254,100 ($300,000 x 0.847)

2         $400,000          0.718               $287,200 ($400,000 x 0.718)

3         $500,000        0.609               $304,500 ($500,000 x 0.609)

Net present value                                ($4,200)

Thus, the capital budgeting project's net present value at an 18% required rate of return is <u>($4,200)</u>.

Learn more about the net present value at brainly.com/question/13228231

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Galina-37 [17]

Answer:

Prime cost = $94,000

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Explanation:

<em>Prime cost is the addition of direct material cost , direct labor cost and direct expenses.</em>

<em>Conversion cost is the cost of converting raw materials into finished product. It s the sum of direct labour cost and production overheads.</em>

For Bento Engineering,

<em>Prime cost = direct labour cost  (since no figure is given for direct material and direct expenses.)</em>

Prime cost = $94,000

Conversion cost = Direct labour cost + overheads

<em>Conversion cost</em> = $94,000 + 126,000

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8 0
3 years ago
Last year, Myron purchased a $10,000 certificate of deposit with a 3% rate of interest from his bank. The government reported th
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Answer:

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Real GDP per capita is NOT an adequate measure of
mrs_skeptik [129]

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5 0
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Answer:

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5 0
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Answer:

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