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Ulleksa [173]
2 years ago
6

A project with a cash inflow of $185 followed by a cash outflow of (-$250) one year later will have an irr of ___ percent.

Business
1 answer:
vampirchik [111]2 years ago
8 0

The IRR for the project is 35.14%.

<h3>What is the IRR?</h3>

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

The IRR can be determined using a financial calculator:

  • Cash flow in year 0 = 185
  • Cash flow in year 1 = -250

IRR = 35.14%

To learn more about IRR, please check: brainly.com/question/26484024

#SPJ1

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Northwood Company manufactures basketballs. The company has a ball that sells for S25. At present, the ball is manufactured in a
Maksim231197 [3]

Answer:

1A. Compute the CM ratio and the break-even point in balls.

  • CM ratio = 2.5
  • break even point = 21,000 balls

1B. Compute the degree of operating leverage at last year.

  • 31.82%

2. Due to an increase in labor rates, the company estimates that variable expenses will increase by $3 per ball next year. If this change takes place and the selling price per ball remains constant at $25, what will be the new CM ratio and break-even point in balls?

  • CM ratio = 3.57
  • break even point = 30,000 balls

3. Refer to the data in (2) above. If the expected change in variable expenses takes place, how many balls will have to be sold next year to earn the same net operating income, $90,000, last year?

  • 42,858 balls

4. The president feels that the company must raise the selling price of its basketballs. If Northwood Company wants to maintain the same CM ratio as last year, what selling price per ball must it charge next year to cover the increased labor costs?

  • new price of $28 per ball

5. The company is discussing the construction of a new, automated manufacturing plant. The new plant would slash variable expenses per ball by 40%, but it would cause fixed expenses per year to double. If the new plant is built, what would be the company's new CM ratio and new break-even point in balls?

  • CM = 1.32
  • 26,250 balls

6.a. If the new plant is built, how many balls will have to be sold next year to earn the same net operating income, $90,000, as last year?

  • 31,875 balls

6.b. Assume the new plant is built and that next year the company manufactures and sells 30,000 balls (the same number as sold last year). Prepare a contribution format income statement and compute the degree of operating leverage.

Income Statement

Total revenue $750,000

Variable expenses <u>($270,000) </u>

Contribution margin $480,000

Fixed expenses <u>($420,000 )</u>

Net operating income $60,000

Degree of operating leverage = 60.87%

6.c. If you were a member of top management, would you have been in favor of constructing the new plant?

  • If you cannot avoid paying the salary raise, then the company needs to carry on the new plant project.

Explanation:

sales price per ball = $25

variable expenses: $15 per unit

  • direct labor $9
  • other variable costs $6

CM ratio = net sales / CM = $750,000 / $300,000 = 2.5

break even point = total fixed costs / CM per unit = $210,000 / $10 = 21,000 balls

degree of operating leverage = fixed costs / total costs = $210,000 / $660,000 = 31.82%

new CM ratio = net sales / CM = $750,000 / $210,000 = 3.57

break even point = total fixed costs / CM per unit = $210,000 / $7 = 30,000 balls

sales level for $90,000 profit = ($210,000 + $90,000) / $7 = 42,857.14 ≈ 42,858 balls

CM ratio (new plant) = net sales / CM = $750,000 / $570,000 = 1.32

break even point = total fixed costs / CM per unit = $420,000 / $16 = 26,250 balls

sales level for $90,000 profit = ($420,000 + $90,000) / $16 = 31,875 balls

8 0
3 years ago
In economics, if a good is inelastic,
Mariulka [41]

In economics, if a good is inelastic, then <u>its supply or demand is not sensitive to price changes. </u>

Changes or fluctuations in market prices does not affect the supply and the Demand of inelastic goods.

<h2>Further Explanation; </h2>
  • Inelastic goods, are types of goods whose demand and supply is not affected by changes in market prices. That is an increase or decrease in market price does not affect their supply or demand.
  • When the price of an inelastic good changes, its supply and demand is unaffected.
  • Examples of such goods include, water and food. Therefore, for inelastic goods, the consumer buying strength and habits remain the same.
<h3>Demand and supply in determination of market price </h3>
  • Demand refers to the quantity of goods or services that consumers are willing and able to buy at a particular price while supply is the quantity of goods or services that suppliers are willing to supply to the market at a particular price.  
  • One of the factor that determine market prices are the forces of demand and supply, this is based on the ability and willingness of buyers and sellers to undertake selling and buying.
  • Buying and selling occurs at an equilibrium price that is agreed upon by sellers and buyers.  
  • This means the sellers and buyers are willing to exchange a certain quantity of a commodity at this price. Thus, price depends on the demand and supply in the market.
  • However, for <u>inelastic goods</u> such as water and food, the consumer has no option than to buy them at existing prices since they are necessity goods.

Keywords; Inelastic goods, demand and supply, market price.

<h2>Learn more about: </h2>
  1. Demand and supply; brainly.com/question/6749722
  2. Effect of supply and demand on market price: brainly.com/question/3522474

Level; High school  

Subject: Business

Topic: Demand and supply

Sub-topic: Types of goods

8 0
3 years ago
Read 2 more answers
Irma has $500 to open a checking account. She wants an account with the lowest fees. She plans to use only her bank’s ATM to dep
andre [41]

Answer:

Account A

Explanation:

Since Irma has $500 to open a checking account and She wants an account with the lowest fees.

She plans to use only her bank’s ATM to deposit her paychecks and withdraw cash.

The Bank Account Terms and Conditions that would be best for Irma is Account A.

Account A will be sufficient as there is no indication for writing of checks and issuing checks  to clients as a form of payment, including the fact that the amount Irma has to open the account is just a base amount of $500

8 0
2 years ago
Read 2 more answers
When a scientific number is the result of a measurement using equipment such as a balance, the last digit is ______?
zhuklara [117]
The answer is <span>the last digit is "estimated".
</span>
The Scientific notation or configuration shows a number in exponential notation, by replacing some portion of the number with E+n, where E (which remains for Exponent) duplicates the first number by 10 to the nth power. For instance, a 2-decimal Scientific notation shows 12345678901 as 1.23E+10, which is 1.23 times 10 to the tenth power. Hope this helps!
5 0
3 years ago
Treasury stock is:
VashaNatasha [74]

Answer:

a. Common stock acquired by the company in the open market & recorded as negative equity

Explanation:

A stock which is buy back from the market at market rate issued by the company. It reduces the total outstanding shares of the company. It is the difference of Number of share issued and Number of share outstanding. Its account is consider as contra equity account. So the correct option is a. Common stock acquired by the company in the open market & recorded as negative equity.

7 0
2 years ago
Read 2 more answers
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