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4 years ago

You are considering two independent projects with the same discount rate of 11 percent.

Business

1 answer:

VikaD [51]4 years ago

4 0

Answer:

Project B should be accepted.

Explanation:

Giving the following information:

Project A:

Io= -$284,700

Year 1= $75,900

Year 2= $106,400

Year 3= $159,800

Project B:

Io= -$115,000

Year 1= $50,000

Year 2= $50,0000

Year 3= $50,000

Discount rate= 11%

To calculate the convenience of each project, we need to calculate the Net Present Value (NPV). If the NPV is positive, the project increases the value of the company.

NPV= -Io + ∑[Cf/(1+i)^n]

Cf= cash flow

Project A:

NPV= -284,700 + 75,900/1.11 + 106,400/1.11^2 + 159,800/1.11^3

NPV= -13,120.61

Project B:

NPV= -$115,000 + 50,000/1.11 + 50,000/1.11^2 + 50,000/1.11^3

NPV= 7,185.74

Project B should be accepted.

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Skysong, Inc. had net credit sales during the year of $1090600 and cost of goods sold of $604000. The balance in accounts receiv

blagie [28]

Answer:

8.2 times

Explanation:

The first step is to calculate the average receivable

= $114,000+$152,000/2

= $266,000/2

= $133,000

Therefore the accounts receivables turn over can be calculated as follows

= net sales / average receivable

= $1,090,000/$133,000

= 8.2 times

Hence the account receivable turnover is 8.2 times

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3 years ago

Being Human, Inc., recently issued new securities to finance a new TV show. The project cost $14.1 million, and the company paid

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Answer:

The company’s target debt-equity ratio is 1.16 : 1

Explanation:

Percentage flotation costs = 1 - (14100000/14100000 + 735000)

= 1 - (14100000/14835000)

= 4.95%

We know that:

(1 + Debt/Equity)*4.95% = 0.071 + 0.031*(Debt/Equity)(Percentage flotation cost equation)

0.0495 + 0.0495*(Debt/Equity) = 0.071 + 0.031*(Debt / Equity)

0.049545*(Debt/Equity) - 0.031*(Debt/Equity) = 0.071 - 0.0495

0.018545*(Debt/Equity) = 0.021455

Debt/Equity = 0.021455/0.018545

Debt / Equity = 1.16 : 1

Therefore, The company’s target debt-equity ratio is 1.16 : 1

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3 years ago

You made an investment of $16,500 into an account that paid you an annual interest rate of 2.8 percent for the first 7 years and

iragen [17]

Answer:

0.05712790 or 5.71%

Explanation:

Annual rate of return = [(1+ r1)^n1 x (1 + r2)^n2]^[1/(n1 + n2)] - 1

n1 is the time period in which annual interest rate =2.8%

n2 is the time period in which annual interest rate =7.2%

So, n1 = 7 years and n2 = 14 years

= [(1+2.8%)^7 x (1+7.2%)^14]^[1/(7 + 14)] - 1

= (1.21325420 x 2.64683577) ^ 1 / 21 - 1

= 1.05712790 - 1

= 0.05712790 or 5.71%

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3 years ago

Capitalism is also called

makvit [3.9K]

Answer:

"free market economy" or "free enterprise economy"

Explanation:

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3 years ago

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Squirrel tree services reports the following amounts on december 31, 2021.Assets Liabilities and Stockholders’ EquityCash $9,500

fiasKO [112]

Answer and Explanation:

1. The preparation of the balance sheet is presented below:

Squirrel tree services

Balance sheet

For the year ended December, 31, 2021

Liabilities Amount Assets Amount

and stockholder equity

Liabilities

Account payable $15,100 Cash $9,500

Salaries payable $5,300 Supplies $3,600

Note payable $38,000 Prepaid insurance $5,300

Total liabilities $58,400 Building $90,000

Equity

Common stock $40,000

Retained earnings $10,000

Total equity $50,000

Total liabilities & equity $108,400 Total assets $108,400

2. The preparation of the cash flow statement is presented below:

Squirrel tree services

Cash flow statement

For the year ended December, 31, 2021

Particulars Amount ($) Amount ($)

Cash flow from operating activities-

Cash inflows customers 96,000

Cash outflows salaries (40,000)

Cash outflows supplies (22,000)

Net Cash flow from operating activities (A) 34,000

Cash flow from investing activities-

Sale of investments 35,800

Purchase of building (98,000)

Net Cash flow from investing activities (B) (62,200)

Cash flow from financing activities

Borrowed from bank 38,000

Dividends (15,500)

Net Cash flow from financing activities (C) 22,500

Net increase in cash (A+B+C) (5,700)

Add: Cash at beginning of year 15,200

Cash at end of year 9,500

7 0

4 years ago