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Nadya [2.5K]
3 years ago
14

Idaho Industries Inc. is considering a project that has an initial aftertax outlay or aftertax cost of​ $450,000. The respective

future cash inflows from its fiveyear project for years 1 through 5 are​ $95,000 each year. Idaho expects an additional cash flow of​ $60,000 in the fifth year. The firm uses the IRR method and has a hurdle rate of​ 10%. Will Idaho accept the​ project? A. Idaho accepts the project because it has an IRR greater than​ 10%. B. Idaho accepts the project because it has an IRR greater than​ 5%. C. Idaho rejects the project because it has an IRR less than​ 10%. D. There is not enough information to answer this question.
Business
1 answer:
lozanna [386]3 years ago
7 0

Answer:

c

Explanation:

Internal rate of return is the discount rate that equates the after tax cash flows from an investment to the amount invested

IRR can be calculated using a financial calculator

Cash flow in year 0 =  $-450,000

Cash flow each year from year 1 to 4 = $95,000

Cash flow in year 5 = $95,000 + $60,000 = $155,000

IRR = 5.62%

Idaho would reject the project because the IRR is less than the hurdle rate

To find the IRR using a financial calculator:

1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.

2. After inputting all the cash flows, press the IRR button and then press the compute button.  

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Answer:

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Explanation:

The computation of the amount reported as a additional paid-in capital  is shown below

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3 years ago
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Andru [333]

Answer:

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Explanation:

Basically, there are two forms of accounting for measuring business activities namely; Financial accounting and Management accounting.

Financial accounting involves the measurement of the business activities over a period using a defined framework or standard such as US GAAP, IFRS, etc. This is usually presented in a form of statements called the financial statements and is used by internal and external stakeholders such as Government, creditors, shareholders etc.

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3 0
3 years ago
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kvv77 [185]

Answer:

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Relevant costs are those evitable, that are cause of a manager decision related to an specific business decision.  

The only cost that can be avoided in these example is the cost of $23,000 so the goods can be cleaned and shipped to the firm's outlet center

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Lera25 [3.4K]

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It should be the price right?

7 0
3 years ago
Read 2 more answers
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