Answer:
The Net Present Value (NPV) of this project is <u>$93,405.59</u>.
Explanation:
Note: Find attached the excel file for the calculation of the NPV of this project.
Net present value (NPV) refers to the present value of cash inflows minus the present value of cash outflows over a specified period of time.
On its own, present value (PV) refers the value that a future sum of money or stream of cash flows has now or currently given a specified rate of return. The formula for calculating the PV is given as follows:
PV = FV / (1 + r)^n
Where,
FV = Future value
r = discount rate. This is given as 10% in this question
n = Relevant period, e.g. year
The above explanation and formula together with other stated formulae in the attached excel file is used in calculating the NPV of this project.
Answer:
C. Prices in the country Increase
Explanation:
Inflation describes the general increase in prices in a country over time. Prices tend to rise with the increase in economic growth. A high economic growth rate implies that prices will increase at a high rate.
The Inflation rate is measured by assessing changes in the prices of products and services representing people's consumption. A rise in the inflation rate indicates a general increase in prices.
Answer: Vent should record $70,000
Explanation:
The requirement is to determine the amount of discount on the debentures that Vent should record at issuance.
ASC Topic 470 states that the proceeds from the issuance of debt with detachable stock warrants should be allocated between the bonds and the warrants based upon their relative fair values at the time of issuance.
In this case, the fair value of the bonds is not known, but the fair value of the warrants is $10 per warrant. Thus, the total fair value of the warrants is $20,000 ($10 × 2,000 warrants). The fair value of the debentures can be estimated to be $430,000 ($450,000 total proceeds – $20,000 fair value of warrants). The face value of the bonds $500,000 less the fair value of the bonds of $430,000 equals the bond discount of $70,000.
Answer:
c. short-run average total cost is typically above long-run average total cost
Explanation:
In the case when the average of the total cost of the short run should be compared with the average of the total cost of the long run for a given output level so this means that the average of the total cost of the short run should be more than the average of the total cost of the long run
Therefore as per the given situation, the option c is considered
Answer:
Expenditures $300,000; Supplies inventory $150,000.
Explanation:
The consumption method recognizes an asset when an item is purchased and an expense when an item is used or consumed. Therefore, when supplies are first bought, Supplies Inventory has a balance of $450,000.
After using those supplies during the year, $300,000 should be debited from Supplies Inventory and credited to Expenditures.
Therefore, at fiscal year-end, the appropriate account balances on the General Fund financial statements would be: Expenditures $300,000; Supplies inventory $150,000.