Answer:
NPV = $-3,383.25
Explanation:
The NPV is the difference between the PV of cash inflows and the PV of cash outflows. A positive NPV implies a good investment decision and a negative figure implies the opposite.
NPV of an investment:
NPV = PV of Cash inflows - PV of cash outflow
PV of cash inflow =
$12,500,
× 1.1535^(-1) + 19,700,
× 1.1535^(-2) + 0× 1.1535^(-3) + 10,400.× 1.1535^(-2) = 31,516.7476
Initial,cost = 34,900
NPV = 31,516.7476 - 34,900 = -3,383.25
NPV = $-3,383.25
Answer:
Increamental net income = $529,920-$478.610 = $51310
Explanation:
Total sales revenue before the further processing = $22.9 * 20,900 =
$478.610
Total net sales revenue after the further processing = ($30.9 *12900)+($20,9*6900)-$12,900 = $529,920
Increamental net income = $529,920-$478.610 = $51310
Answer:
$338,805.68
Explanation:
The computation of the amount of annual level of expenditure is shown below
Here we use the PMT formula
Given that
NPER = 15
RATE = 8%
FV = $0
PV = $2,900,000
The formula is shown below:
= PMT(RATE, NPER,-PV,FV,TYPE)
The present value comes in negative
After applying the above formula, the amount of annual level of expenditure is $338,805.68
Answer:
Comparability
Explanation:
Comparability is a characteristic of the information presentation of accounting information. It is required that the use of standardized accounting principles aid in making the accounts of two different enterprises to be compared to enable decision making among investors or for the allocation of investible resources. Without this comparability it becomes difficult to determine where resources would be put. Comparability can also be applied with the same company when it is able to compare its performance from one period to the other. This is also enabled by the use of standardized principles which have been consistently applied.
Answer:
interest must be paid on a periodic basis regardless of earnings.
Explanation:
A bond can be defined as a debt or fixed investment security, in which a bondholder (investor or creditor) loans an amount of money to the bond issuer (government or corporations) for a specific period of time. The bond issuer are expected to return the principal (face value) at maturity with an agreed upon interest (coupon), which are paid at fixed intervals.
The disadvantages of bonds are listed below as;
1. Bonds can decrease a person's return on equity.
2. Bonds require a payment of the principal amount.
3. Bonds typically require a payment of periodic interest.
Generally, most bonds with shorter maturity time respond less dramatically to changes in interest rates when compared to bonds having longer maturity. Thus, the risk associated with short bonds isn't really significant because their interest rates are less likely to change substantially within that short period of time unlike bonds with longer maturity.
Hence, regardless of the earnings by bondholders, interest must be paid on a periodic basis on a long-term bond.
