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4 years ago

Which methods of evaluating a capital investment project use cash flows as a measurement basis?

Business

2 answers:

ruslelena [56]4 years ago

8 0

Answer:

Payback Period, Internal Rate of Return, and Net Present Value use cash flows for evaluating capital investment projects.

Explanation:

There are three methods of evaluating a capital investment project that use cash flows as a measurement. These include Payback Period, Net Present Value and Internal Rate of Return. The payback period gives the idea about the time that is required for a person to get back his initial investment. Internal rate of return is used to determine profitability of potential investment. Net present value refers to the difference between the present value of cash outflows and the cash inflows for a specific period of time.

Further explanation:

The Payback period: In this method of payback period, it simply calculates the amount of time that it will take to get one’s original investment back. It helps in analyzing any risks related to investments. An investment with a lesser payback period is seen as a better investment because investor’s original expenses are at risk for a lesser time.

Internal rate of return: Internal rate of return makes use of the discount rates which makes the present value of cash flows in future, equivalent to zero. This strategy helps in comparing the profitability of various investments in different projects.

Net present value: The net present value method makes use of investor's requisite rate of return to compute the present price of future cash flow from the project. Net Present Value is used in creating capital budget and investment planning to estimate the profitability of the project.

Learn More:

Disadvantage of the payback period method : brainly.com/question/13168811 - (Stokholm)

Project acceptance when NPV is used brainly.com/question/13228231 - (Matiasemella)

Keywords:

Capital investment project, cash flow, payback period, internal rate of return, net present value.

bixtya [17]4 years ago

6 0

The method <span>of evaluating a capital investment project that use cash flows as a measurement basis are: </span><span>Payback period, internal rate of return, and net present value.
- PAyback period, used to determine how much asset is back after the initial saving
- internal rate of return, Used to measure potential profit from an investment
- Net present value, used to determine the worth of all company's assets</span>

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Pursuant to plan of reorganization adopted in the curren year, newman corporation exchanged property with an adjusted basis of 8

Alenkinab [10]

Answer:

Explanation:

Victor's recognized gain equals to zero, because this exchange qualifies under Sec. 368 as a tax-free reorganization.

4 0

3 years ago

Identify the major transportation improvements in this period, and explain how they influenced the market economy.

kramer

In the first half of the nineteenth century, the steamboat, canal, railroad and telegraph were presented. This made transportation a great deal less expensive and quicker for organizations. It additionally connected agriculturists to national markets. The railroad gave employments to such huge numbers of Americans, despite the fact that many were foreigners. Telegraph made it conceivable to impart cross country, in any event quicker than mail would. It was for the most part utilized for organizations. Each of the four of these innovations twisted America out of its monetary past by making exchange/business speedier, less expensive, and more productive.

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3 years ago

1-a. Allocate the lump-sum purchase price to the separate assets purchased. 1-b. Prepare the journal entry to record the purchas

marin [14]

Answer:

1. a. Allocated prices

First add the market values = 444,150 + 255,150 + 56,700 + 189,000 = $945,0

Building allocated price Land allocated price

= 444,150/ 945,000 * 830,000 = 255,150/945,000 * 830,000

= $‭390,100‬ = $224,100

Land improvement allocated price Four vehicles allocate price

= 56,700/945,000 * 830,000 = 189,000/945,000 * 830,000

= $49,800 = $166,000

b. Journal entry

Date Account Details Debit Credit

Jan. 1, 2017 Building $390,100

Land $224,100

Land improvement $49,800

Vehicles $166,000

Cash $830,000

2. Depreciation on building using straight-line method.

= (390,100 - 28,000) / 15

= $‭24,140‬

3. Depreciation on land improvements using double declining method.

First do straight line:

= 49,800/ 5 years

= $9,960

Straight line rate of depreciation = 9,960/49,800 = 20%

Double declining will be twice that rate = 40%

Depreciation = 40% * 49,800

= $‭19,920‬

4 0

3 years ago

In 2011, Finland had a GDP of $195 billion and a per capita GDP of $36,000. Life expectancy was about 79 years. Which of these a

irina [24]

Answer:

Finland has a free-market economy

Explanation:

The fact that would most support this conclusion is that Finland has a free-market economy. A free market is an economic system characterized by a spontaneous and decentralized order of arrangements by individuals allowing them to make their own economic decisions based on supply and demand in that current time with little or no government control in the matter. This is an economic system that can only work in a developed economic nation.

8 0

3 years ago

The Pinetop Corporation issues 1,000 shares of 6%, $100 par value preferred stock at the beginning of 2014. All remaining shares

lidiya [134]

Answer:

$12,000 and $6,000

Explanation:

For computing the dividend, first we have to find out the yearly dividend which is shown below:

= Number of shares × par value per share × dividend rate × number of years

= 1,000 shares × $100 × 6% × 2 years

= $12,000

Out of $18,000, the $12,000 will be paid to preferred stockholders and the remaining $6,000 will be paid to common stockholders

5 0

3 years ago