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3 years ago

The internal rate of return is:

Business

1 answer:

shepuryov [24]3 years ago

5 0

Answer:

The correct answer is letter "A": the discount rate that makes the net present value of a project equal to the initial cash.

Explanation:

The Internal Return Rate, or IRR, is a central component of corporate finance capital budgeting. Companies use it to determine which discount rate will make the Present Value of the after tax cash flows equal to zero (0). Any project that returns an IRR greater than 0 ads has a value.

<em>In the decision-making process, IRR is subordinated to Net Present Value because it is preferred an absolute dollar amount that is higher than a higher IRR.</em>

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Orange Inc., an orange juice producer with a current debt-to-equity ratio of 2, is considering expanding its operations to produ

postnew [5]

Answer:

8.25%

Explanation:

Orange, Inc. should calculate the MARR (minimum acceptable rate of return) for this project using the following:

Re = 12% (similar to Paste, Inc., so it can be considered the industry's average)

Rd = 6% x (1 - 25%) = 4.5%

MARR = (1/2 x 12%) + (1/2 x 4.5%) = 6% + 2.25% = 8.25%

This calculation is similar to calculating a company's WACC since you must determine the weighted cost of financing the project.

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3 years ago

Assume that you are a consultant to Lotte Inc., and you have been provided with the following data: D1 = $0.67; P0 = $27.50; and

Eduardwww [97]

The cost of equity from retained earnings based on the DCF approach=9.44%

Explanation:

The cost of equity from retained earnings based on the DCF approach can be calculated as follows,

For D1 = $0.67

For P0 = $27.50

For g = 7.00%

Therefore, rs = $\frac{D1}{PO}$ + g

The answer is =9.44%

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3 years ago

Which of the following statements is true?

marissa [1.9K]

Answer: B) A)

Explanation:

This kind of method, direct write-off method is referring to your question and it is considering a method that is used for recognizing bad debts expenses that are coming from credit sales of someone's account. With this method there is no account that is considering allowance and receivable that is found on someones's account is written-off directly to expense when there is uncollectible account expense.

One of the greatest advantages is simplicity because those companies who are doing this method have to make only two transactions.

5 0

3 years ago

Read 2 more answers

Explain why a city council meeting to discuss hiring more city employees must be open to the public, while a meeting to discuss

ad-work [718]

Answer:

The answer is because people should know who is coming into office, but they do not have the right to know why someone is being fired for private reasons.

Explanation:

It’s important for the hiring discussion to be made public by the city council since it relates to the use of public funds to compensate these additional workforces. In contrast, firing processes do not relate to incurring funds and thus the public does not need to know about the reasons of the firing.

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3 years ago

Current labor market trends include _____.answer.com

miv72 [106K]

an increase in service jobs accompanied by a decrease in manufacturing jobs

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3 years ago