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AfilCa [17]
3 years ago
8

Consider a firm with a contract to sell an asset for $151,000 four years from now. The asset costs $96,000 to produce today. a.

Given a relevant discount rate on this asset of 13 percent per year, calculate the profit (or loss) the firm will make on this asset. (A loss should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. At what rate does the firm just break even? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
Business
1 answer:
abruzzese [7]3 years ago
6 0

Answer:

a) loss of 3,388.87

b) it will break even at 11.99%

Explanation:

we will discount the 151,000 at 13% to know the current sales revenue at the sale

\frac{Maturity}{(1 + rate)^{time} } = PV

Maturity 151,000

time  4 years

rate  0.13

\frac{151000}{(1 + 0.13)^{4} } = PV

PV   92,611.13

the present value is 92,611.13 while the cost is 96,000

there is a loss of 3.388,87‬

To know at which rate the firm break even:

PV = 96,000

\frac{151000}{(1 + r)^{-4} } = 96,000

\sqrt[-4]{96,000/151,000} - 1 = r

r =  0.11989  

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The United Kingdom started regulating the size of grocery stores in the early​ 1990s, and​ today, the average size of a typical
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Hope this helps.

0 0
4 years ago
On February 1, a seller paid $1,140 in annual property tax for the current calendar year. He sold the house with the closing set
tigry1 [53]

Answer:

$288

Explanation:

Since the total property taxes for the year are $1,140, to find the property tax per month we have to divide by 12 ⇒ $1,140 / 12 = $95 per month

The seller is responsible for paying the property taxes during 3 months and 1 day, to find out the amount for that 1 day we divide the monthly tax by 30 = $3.17 per day.

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*The seller's credit includes all the expenses that must be paid by the seller, while the seller's debit includes all the money that he receives.

6 0
3 years ago
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Answer:

Net Cash Flows from operating activities is $68.5 million.

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The net cash flows from operating activities can be calculated using the following method:

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1. Net Income                                                65

<u>Add Non Cash Deductions</u>

2. Depreciation                                             5.5

3. Loss on sale of Equipment                       1.5

<u>Add / (Less) the increase or </u>

<u>decrease in current Assets or </u>

<u>liabilities</u>

4. Increase in Trade Receivables                (2.5)

5. Increase in Trade Payables                      3.5

6. Increase in inventory                               <u> (4.5) </u>

Net Cash Flows from operating activities $68.5

4 0
4 years ago
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