In developed economics such as the untied states the

A project will produce an operating cash flow of $56,200 a year for 5 years. The initial fixed asset investment in the project w

Lelu [443]

Answer :

Net present value = -$18,375

Explanation :

As per the data given in the question,

Initial investment = $239,800

The project will generate operating cash flow pf $56,200 for 5 years

So present value of operating cash flow :

PMT = $56,200

N = 5 years

Rate = 15.2%

FV = $0

Now applying the formula

= -PV(RATE,NPER,PMT,FV,0)

The present value comes $187,502

Now

FV = $67,000

n = 5 years

Rate = 15.2%

PMT = $0

Now applying the formula

= -PV(RATE,NPER,PMT,FV,0)

The present value comes $33,023

Now the Net present value is

= ($33,023 + $187,502) - $238,900

= -$18,375

5 0

3 years ago

Dowell Company produces a single product. Its income statements under absorption costing for its first two years of operation fo

Kazeer [188]

Answer:

2016 = -$67,000

2017 = $393,000

Explanation:

The income statements for company for each of its first two years under variable costing is shown below:-

Dowell Company

Income statement

Variable costing

Particulars 2016 2017

Sales $966,000 $1,886,000

Less: Variable cost

Direct material $84,000 $164,000

(21,000 × $4) (41,000 × $4)

Direct labor $168,000 $328,000

(21,000 × $8) (41,000 × $8)

Variable overhead $189,000 $369,000

(21,000 × $9) (41,000 × $9)

Variable selling and

administrative expenses $42,000 $82,000

(21,000 × $2) (41,000 × $2)

Total variable cost $483,000 $943,000

Contribution margin $483,000 $943,000

(Sales - Contribution margin)

Less:

Fixed expenses

Fixed overhead $310,000 $310,000

Fixed selling and

administrative expenses $240,000 $240,000

Total of fixed expenses $550,000 $550,000

Net income (loss) -$67,000 $393,000

To determine the net income (loss) we simply deduct the contribution margin from total of fixed assets.

8 0

3 years ago

Reineke Company's chart of accounts includes the following selected accounts.

Bogdan [553]

Answer:

Reineke Company

Journal Entries:

Oct. 1 Debit 120 Inventory $310

Credit 101 Cash $310

To record the purchase of merchandise via check no. 63

Oct. 3 Debit 157 Equipment, $840

Credit 101 Cash $840

To record the purchase of equipment via check no. 64

Oct. 5 Debit 201 Accounts payable (Uggla Company) $2,500

Credit Cash $2,450

Credit Cash Discounts $50

To record payment on account, less 2% discount, check no. 65

Oct. 10 Debit 120 Inventory $2,270

Credit 101 Cash $2,270

To record the purchase of inventory via check no. 66.

Oct. 15 Debit 201 Accounts payable (Rosenthal Co.) $1,770

Credit 101 Cash $1,770

To record the payment on account by check no. 67.

Oct. 16 Debit 306 Owner's Drawings $450

Credit 101 Cash $450

To record C. Sheridan's payment for his personal insurance premium of $450, check no. 68.

Oct. 19 Debit 201 Accounts payable (Orr Co.) $2,200

Credit 101 Cash $2,156

Credit Cash Discounts $44

To record full payment for invoice no. 610, less 2% cash discount, using check no. 69.

Oct. 29 Debit 201 Accounts payable (Clevenger Company) $2,580

Credit 101 Cash $2,580

To record full payment for invoice no. 264, by check no. 70.

Explanation:

a) Data and Calculations:

Chart of Accounts:

101 Cash

120 Inventory

130 Prepaid insurance

157 Equipment

201 Account payable

306 Owner's drawings

505 Cost of Goods sold

Accounts Payable balances:

Uggla Company $2,500

Orr Co. $2,510

Rosenthal Co. $1,770

Clevenger Company $3,750

Transactions Analysis:

Oct. 1 120 Inventory $310 101 Cash $310 check no. 63

Oct. 3 157 Equipment, $840 101 Cash $840 check no. 64

Oct. 5 201 Accounts payable (Uggla Company) $2,500 101 Cash $2,450 Cash Discounts $50, less 2% discount, check no. 65

Oct. 10 120 Inventory $2,270 101 Cash $2,270 check no. 66, $2,270.

Oct. 15 201 Accounts payable (Rosenthal Co.) $1,770 101 Cash $1,770, check no. 67.

Oct. 16 306 Owner's Drawings $450 101 Cash $450 for his personal insurance premium of $450, check no. 68.

Oct. 19 201 Accounts payable (Orr Co.) $2,200 101 Cash $2,156 Cash Discounts $44 for invoice no. 610, $2,200 less 2% cash discount, check no. 69, $2,156.00.

Oct. 29 201 Accounts payable (Clevenger Company) $2,580 101 Cash $2,580 for invoice no. 264, $2,580, check no. 70.

6 0

3 years ago

Aguilera acoustics, inc., (aai) projects unit sales for a new seven-octave voice emulation implant as follows:

Andrew [12]

Answer:

NPV = $ 3,969,921.84

IRR = 23.94%

Explanation:

As the values are not given so i searched and found a similar question. i am using those values.

using formulas:

Cash Flows = Net Income + Depreciation + Investment + NWC + After-tax Salvage value

NPV = NPV(rate, CF1...CF5) - CF0

IRR = IRR(values)

It requires a table for it to be solved easily and efficiently so i am putting a screen shot of a word file on which i have solved the question. the question and its values are also given in screenshots.

4 0

3 years ago

If a company's actual results for revenues, net profits, eps, and roe turn out to be worse than projected, then it is usually be

34kurt

If a company's actual results for revenues, net profits, EPS, and ROE turn out to be worse than projected, then it is usually because a company might lose its sales revenue and market share if it is unable to respond rivals market strategy.

8 0

3 years ago

Read 2 more answers