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3 years ago

The accounting records of Eastlake Industries provided the data below.

Business

1 answer:

meriva3 years ago

3 0

Answer:

Please see the solution below:

Explanation:

CASH FLOWS FROM OPERATING ACTIVITIES $

Net Income 308,000

Adjustments to reconcile net income to

net cash provided by operating activities:

Depreciation on Fixed Assets 19,000

Amortization of bond premium 3,800

(Increase) Decrease in Current Assets:

Inventory (2,400)

Accounts Receivables (1,480)

Increase (Decrease) in Current Liabilities:

Interest Payable (1,680)

Accounts Payable 7,800

NET CASH PROVIDED BY OPERATING ACTIVITIES 333,040

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3 years ago

The Quorum Company has a prospective 6-year project that requires initial fixed assets costing $962,000, annual fixed costs of $

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Answer:

5375

Explanation:

Given that:

Initial Fixed assets costing = $962000

Annual fixed costs = $403400

Variable cost per unit = $123.60

Sales price per unit = $249.00

Discount rate = 14%

Tax rate = 21%

The contribution per unit = Sales price - Variable cost

= $(249.00 - 123.60)

= $125.40

The present value break-even point(BEP) is the region of sales level where the net present value (NPV) equals zero.

Assuming that the sales level = p

i.e.

NPV = PV(of inflows - of outflows)

Inflows = (p * contribution per unit - annual fixed cost)( 1- tax rate) + depreciation * tax rate

= (p * 125.4 - 403400) ( 1 - 0.21) + depreciation * tax rate

where;

depreciation = initial fixed assest cost/ lifetime of the project

= (125.4p - 403400)*0.79 + (962000/6)*0.21

= (125.4p - 403400)*0.79 + (160333.33)*0.21

= (125.4p - 403400)*0.79 + 33670

Now, the PV of the inflows =PV factor(6 years, 14%) * inflows

$= inflows * \dfrac{( 1-(1.14)^{-6})}{0.14}$

$= inflows * 3.8887$

Replacing the value for inflows, we have:

$=((125.4p - 403400)*0.79 + 33670)* 3.8887$

The PV of the outflows = Initial Fixed asset cost = $962000

∴

Equating both together using:

PV(of inflows - of outflows) = 0

((125.4p - 403400)*0.79 + 33670)* 3.8887 - 962000 = 0

((125.4p - 403400)*0.79 + 33670)* 3.8887 = 962000

(99.066p - 318686 + 33670) * 3.8887 = 962000

(99.066p - 285016) * 3.8887 = 962000

385.24p - 1108341.72 = 962000

385.24p= 962000 + 1108341.72

385.24p= 2070341.72

p = 2070341.72 / 385.24

p ≅ 5375

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Each year a cash grant is given to a deserving college student. The grant consists of the interest earned that year on a $440,00

Harlamova29_29 [7]

Answer:

The cash award will be equal;l to $444422.01

Explanation:

We have given amount invested P = $440000

Rate of interest r = 8.3%

Time t = 1 year

As the amount is compounded on daily basis

We know that 1 year = 365 days

So rate of interest $r=\frac{1}{365}=0.00273$ %

Time period n = 365

We know that final amount is equal to $A=P(1+\frac{r}{100})^n$

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3 years ago