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3 years ago

You would like to know the minimum level of sales that is needed for a project to be accepted based on its net present value.

Business

1 answer:

Andrei [34K]3 years ago

8 0

Answer:

C. financial break-even point.

Explanation:

Break even point in economics is the point in the business, wherein cost and revenue generated are equal and business make no profit, no loss. Similary Financial break even has a same concept, however, it is a point in business, wherein earning before EBIT is equal to the fixed financial cost of the company and these fixed costs should be earned by the company to run its business and meet its fixed financial obligation. The earning above the financial break-even point is a profit to the shareholder.

Point in financial break even, wherein earning per share is equal to zero.

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Sheffield Corporation exchanged 2750 shares of Pharoah Company common stock, which Sheffield was holding as an investment, for e

AveGali [126]

Answer: Please refer to Explanation

Explanation:

When recording Equipment here the value of the shares at current value should be used and not the cost of the equipment.

DR Equipment $162,250

CR Investment in Pharaoh Company $137,500

CR Gain on Exchange $24,750

(To record Exchange of shares for Equipment)

Workings.

Investment in Pharaoh Company.

= 2,750 shares * $50(purchase price)

= $137,500

Gain on Exchange

= 2,750 shares * (Market Price - Purchase Price)

= 2,750 shares * ( 59 - 50)

= $24,750

Equipment.

= Investment in Pharoah Company + Gain on Exchange

= 137,500 + 24,750

= $162,250

6 0

3 years ago

At the high and low levels of activity during the month, direct labor hours are 90,000 and 40,000, respectively. The related cos

andre [41]

Answer:

The fixed cost at any level of activity is $48,000 while the variable cost per unit at any level of activity is $1.30

Explanation:

The total cost is a function of the fixed and variable cost. Whilst the fixed cost does not change at a certain range of activities level, the variable cost changes as the level of activities(units produced or sold).

Using the high and low levels of activities given, let the variable cost per unit be v and the fixed cost F

for the high level,

F + 90,000v = 165,000

For the low level

F + 40,000v = 100,00

Solving both equations simultaneously,

50,000v = 65,000

v = $1.30

F + 40,000($1.30) = 100,000

F = 100,000 - 52,000

F = $48,000

5 0

3 years ago

Wiley's Wire Products is considering a project that has the following cash flow and WACC data. What is the project's MIRR? Note

madreJ [45]

Answer:

e. 13.50%

Explanation:

WACC 11.00%

Year 0 1 2 3

Cash flows $800 $350 $350 $350

Compounded-

values, FVs $431.24 $388.50 $350.00

TV = Sum of compounded inflows: $1,169.74

MIRR = 13.50% Found as discount rate that equates PV of TV to cost, discounted back 3 years @ WACCMIRR= 13.50%.

4 0

3 years ago

Suppose you borrow $10,000 right now to start a business. If the terms of the loan require you to pay back $16,000 in 5 years, w

Alexxandr [17]

Answer:

r = 9.86%

Explanation:

The formula for calculating the future value of an invested amount yielding a compound interest is given by:

$FV=PV(1+\frac{r}{n})^{nt}$

where:

FV = future value = $16,000

PV = present value = $10,000

r = interest rate = ?

n = number of compounding period per year = 1

t = time in years = 5

∴ $16000=10000(1+\frac{r}{1})^{5}$

dividing both sides by 10,000

$\frac{16000}{10000} =\frac{10000(1+\frac{r}{1})^{5}}{10000}$

$1.6 = (1 + r)^{5}$

to remove the power of 5, we have to take the 5th root of both sides:

$(1.6)^{1/5} = (1 + r )^{5 * 1/5}$

Using your calculator:

1.09856 = 1 + r

∴ r = 1.09856 - 1 = 0.09856

r = 0.0986 = 9.86%

∴ r = 9.86%

8 0

3 years ago

Which of the following describes how the U.S. government protects and supports farmers and ranchers?

AlexFokin [52]

Answer:

through allowing agribusiness companies to create oligopolies

Explanation:

6 0

3 years ago