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bixtya [17]
3 years ago
12

Project A has a required return on 9.2 percent and cash flows of −$87,000, $32,600, $35,900, and $43,400 for Years 0 to 3, respe

ctively. Project B has a required return of 12.7 percent and cash flows of −$85,000, $14,700, $21,200, and $89,800 for Years 0 to 3, respectively. Which project(s) should you accept based on net present value if the projects are mutually exclusive? Multiple Choice Accept Project A and reject Project B Reject Project A and accept Project B Accept both projects Reject both projects Accept either one, but not both
Business
1 answer:
LiRa [457]3 years ago
5 0

Answer:

Accept Project B , Reject Project A

Explanation:

Net present value is the present value of after tax cash flows from an investment less the amount invested.

NPV can be found using a financial calculator

For project A ,

Cash flow in year 0 = $-87,000

Cash flow in year 1 = $32,600

Cash floe in year 2 = $35,900

Cash floe in year 3 = $43,400

I = 9.2%

NPV = $6,288.17

For project B,

Cash flow in year zero = −$85,000

Cash flow in year 1 = $14,700

Cash flow in year 2 = $21,200

Cash flow in year 3 = $89,800

I = 12.7%

NPV = $7,468.93

Based on the NPV, the second project would be chosen because it has a higher NPV.

Both projects are profitable but because the projects are mutually exclusive, only the more profitable project can be chosen.

To find the NPV 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 NPV button, input the value for I, press enter and the arrow facing a downward direction.

3. Press compute

I hope my answer helps you

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What are some of the benefits of regional integration?
Fiesta28 [93]

Answer:

1. Benefits Of Regional Economic Integration

2. Enhanced political cooperation. Several nations usually have a much larger political influence as compared to the influence that each individual country would have.

3. Creates trade. Member countries in a regional economic integration agreement have a wider choice of services and goods that were previously unavailable.

<em>4. Employment prospects. </em>

Explanation:

The benefits of regional integration can easily identify. There are economic benefits such as additional trade, improved quality, increased imports and exports, high-quality international relations and an integrated market. Regional integration can enhance the general quality of life for the citizens of those states.

3 0
3 years ago
Blossom Company purchased a machine with a list price of $168000. They were given a 10% discount by the manufacturer. They paid
mixer [17]

Answer:

$11,870

Explanation:

Given:

List price = $168,000

Discount = 10%

Shipping cost = $1,000

Sales tax = $6,500

Salvage value = $40,000

Useful life = 10 years

Now,

Purchasing price = List price - Discount

Purchasing price = $168,000 - [10% × $168,000]

Purchasing price = $168,000 - $16,800

Purchasing price = $151,200

Costs that are directly related to the purchase of asset are capitalized.

Thus,

Cost = Purchasing price + Shipping costs + Sales tax

Cost = $151,200 + $1,000 + $6,500

Cost = $158,700

Now,  

Annual straight line depreciation = \frac{Cost-Residual Value}{Useful life}  

Annual straight line depreciation = \frac{158,700 - 40,000}{10}  

Annual straight line depreciation = \frac{118,700}{10}  

Annual straight line depreciation = $11,870

8 0
3 years ago
The following information is available for Sunland Company:
vladimir1956 [14]

Answer:

Contribution margin= 250,000

Explanation:

Giving the following information:

Sales $590,000

Total fixed expenses $150,000

Cost of goods sold $390,000

Total variable expenses $340,000

<u>A CVP income statements provides the following structure:</u>

<u></u>

Sales= 590,000

Total variable costs= (340,000)

Contribution margin= 250,000

6 0
3 years ago
Hsu Company reported the following on its income statement: Income before income taxes $302,634 Income tax expense 90,790 Net in
7nadin3 [17]

Answer:

5.79  times

Explanation:

The times interest earned ratio tells us the number of times the company's made earnings in multiple of its debt interest obligation.

The formula for times earned interest ratio is the income before interest and taxes divided by the interest expense.

income before tax is $302,634

income before interest and taxes= $302,634+$63,228=$365,862.00  

times interest earned ratio=$365,862.00/ $63,228= 5.79  times

8 0
3 years ago
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blagie [28]

Answer:

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Explanation:

6 0
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