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deff fn [24]
3 years ago
13

Falcon Crest Aces (FCA), Inc., is considering the purchase of a small plane to use in its wing-walking demonstrations and aerial

tour business. Various information about the proposed investment follows: Initial investment $ 170,000 Useful life $ 10 years Salvage value 20,000 Annual net income generated $ 4,000 FCA's cost of capital 8% Assume straight line depreciation method is used. Net present value (NPV). (Future Value of $1, Present Value of $1, Future Value Annuity of $1, Present Value Annuity of $1.) (Use appropriate factor(s) from the tables provided. Negative amount should be indicated by a minus sign. Round the final answer to nearest whole dollar.)
NPV:

Recalculate FCA's NPV assuming the cost of capital is 3% percent. (Future Value of $1, Present Value of $1, Future Value Annuity of $1, Present Value Annuity of $1.) (Use appropriate factor(s) from the tables provided. Round your final answer to the nearest whole dollar amount.)

NPV:
Business
1 answer:
Simora [160]3 years ago
7 0

Answer:

Net present value at 8%=($42510)

Explanation:

Explanation- Net present value   = Present value of cash inflows – Total outflows

={(19000*6.7100) - $170000}

=$127490- $170000

= ($42510)

Annual net cash inflows = Net income+ Depreciation

= $4000+$15000

= $19000

Straight line Method:-

= Cost of asset- Salvage value of asset/No. of useful life (years)

=($170000-$20000)/10 years

=$150000/10 years = $15000

Net present value at 3%=($7926)

Explanation- Net present value   = Present value of cash inflows – Total outflows

={(19000*8.5302) - $170000}

=$162074- $170000

= ($7926)

Annual net cash inflows = Net income+ Depreciation

= $4000+$15000

= $19000

Straight line Method:-

= Cost of asset- Salvage value of asset/No. of useful life (years)

=($170000-$20000)/10 years

=$150000/10 years = $15000

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On december 1, hansen co. Borrowed $100,000 cash from national bank by signing a 90-day, 6% interest-bearing note. On december 3
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On March 1, the due date of the note, Hansen will record interest expense as a  <u>debit</u> in the amount of $600.

Interest expense is the cost associated with borrowing money in the form of loans, bonds, and lines of credit. It is the amount paid to lenders for the use of their money and is typically reported as a line item on an income statement.

On March 1, Hansen will record interest expense as a debit in the amount of $600 ($100,000 x 6% x 90/360). The adjusting entry on December 31 was to record the interest accrued on the note between December 1 and December 31 ($100,000 x 6% x 30/360 = $500). Therefore, the interest payable on March 1 is the amount of the loan times the interest rate times the number of days outstanding ($100,000 x 6% x 90/360 = $600).

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3 0
1 year ago
A currency drain occurs when
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The correct answer is: non-bank public increases its holdings of currency outside the banking system.

Explanation:

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Answer:

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Explanation:

If the government removes a tax on sellers of a good and imposes the same tax on buyers of the good, the net amount sellers receive doesn't change. The quantity of goods that are sold also remains the same.

So, price paid by buyers will not change and the price received by sellers will also not change

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Answer:

b. percentage change in the consumer price index.

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Inflation is the increase in the price of a commodity, it is expressed as a percent change in the price of an item. We can calculate the inflation using percentage change in consumer price index.

Consumer price index measure the percentage of change in the price of a market basket of consumer goods and services.

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