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borishaifa [10]
3 years ago
5

Bruno's Lunch Counter is expanding and expects operating cash flows of $26,900 a year for 6 years as a result. This expansion re

quires $92,700 in new fixed assets. These assets will be worthless at the end of the project. In addition, the project requires $6,600 of net working capital throughout the life of the project. What is the net present value of this expansion project at a required rate of return of 13 percent?
Business
1 answer:
8090 [49]3 years ago
4 0

Answer:

Net present value of this expansion project is 8234.

Explanation:

To get the net present value,  we make a cash-flow in excel. See document attached.

At moment 0 the investment is =$(92.700), also we consider the working capital =(6.600)

Moment 1 to 6 = $26.900

We calculate the Net cash flow (that is the difference between benefits and cost).

To get net present value, we use VNA formula.  ( =VNA(required rate of return; Net cash flow from moment 0 to moment 6) +Net cash flow at moment 0)

Net present value is 8234

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Richards Corporation had net income of $250,000 and paid dividends to common stockholders of $50,000. It had 50,000 shares of co
Scilla [17]

Answer:

Option (d) 7 times

Explanation:

Data provided in the question:

Net income = $250,000

Dividends paid to common stockholders = $50,000

Common stock outstanding = 50,000

Selling price of the common stocks = $35

Now,

The price-earnings ratio is calculated as:

⇒ ( Stock price ) ÷ ( Earnings per share )

also,

Earnings per share = ( Net income ) ÷ ( common stock outstanding )

= $250,000 ÷ 50,000

= $5

or

Price-earnings ratio = $35 ÷ $5

or

Price-earnings ratio = 7 times

Option (d) 7 times

4 0
3 years ago
A project initially costs $40,500 and will not produce any cash flows for the first 2 years. Starting in Year 3, it will produce
melisa1 [442]

Answer:

Net present value = $2063.1922

Explanation:

given data

initially costs = $40,500

cash flows = $34,500

final cash inflow = $12,000

required rate of return = 18.5 percent

solution

The cash flows is  

Year 0 =  $40500

Year 1 = $0

Year 2 = $0

Year 3 = $34500

Year 4 = $34500

Year 5 = $0

Year 6 = $12000

so  Net present value will be express as

Net present value = -Initial cash outflow + Present value of future cash flows ...............1

Present value of future cash flows = (cash flow in year n) ÷ (1 + required rate of return)^t   ..........................2

put here value we get

Present value = \frac{0}{(1+0.185)^1} + \frac{0}{(1+0.185)^2} + \frac{34500}{(1+0.185)^3} + \frac{34500}{(1+0.185)^4} + \frac{0}{(1+0.185)^5} + \frac{12000}{(1+0.185)^6}    

Present value = $42563.1922    

Net present value= -$40500 + $42563.1922

Net present value = $2063.1922

8 0
3 years ago
Marc, a single taxpayer, earns $60,000 in taxable income and $5,000 in
lesya692 [45]

Answer:

Federal tax = $10,856.25

Explanation:

Given:

Tax rate schedule for year 2014.

Income between  $36,900 - $89,350

$5,081.25 + 25% over $36,900

Total income = $60,000

Computation:

So,Income between  $36,900 - $89,350

Federal tax = $5,081.25 + 25% ($60,000 - $36,900)

Federal tax = $5,081.25 + 25% ($23,100)

Federal tax = $5,081.25 + 0.25 ($23,100)

Federal tax = $5,081.25 + $5,775

Federal tax = $10,856.25

4 0
3 years ago
Which of the following influences the price elasticity of demand?
daser333 [38]

Explanation:

1. percentage of a consumer's budget

7 0
2 years ago
Read 2 more answers
​allison's auto art is a company that applies pinstripes to vehicles.​ allison's cost for a basic 1minus−color pinstriping job i
Lunna [17]
In economics, marginal cost is the additional expenditure or cost you incur when you buy another more quantity of the product. When Allison bought the <span>1minus−color application, she spent a total of $130.

$35 + $95 = $130

When she upgraded to 3minus-color application, her cost now increased to 

$175 + $40 = $215

Now, as mentioned, marginal cost is the additional cost incurred when buying one more quantity of the same product. Therefore, marginal cost = </span>Δcost/Δquantity. Thus,

Marginal Cost = ($215-$130)/(3-1)
Marginal Cost = $42.5

The marginal cost is $42.5 per color application.
6 0
3 years ago
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