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Salsk061 [2.6K]
3 years ago
9

Southern california publishing company is trying to decide whether or not to revise its popular textbook, financial psychoanalys

is made simple. the company has estimated that the revision will cost $90,000. cash flows from increased sales will be $21,600 the first year. these cash flows will increase by 4 percent per year. the book will go out of print five years from now. assume that the initial cost is paid now and revenues are received at the end of each year.

Business
1 answer:
steposvetlana [31]3 years ago
8 0

If the company requires a return of 10 percent for such an investment, calculate the present value of the project.

The present value of the project is $72349.51.

Since we consider only incremental cash flows for a project, we consider $21,600 for year one and calculate a 4% increase for each of the additional years.

We then calculate the Present Value Interest Factor (PVIF) at 10% for four years using the formula :

PVIF = 1 / [(1+r)^n]

Next, we find the product of the respective cash flows and PVIF for each year.

Finally, we find the total of the discounted cash flows for the four years to find the Present Value of the project.

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You are thinking of investing in Wave Runnerz, Inc. You have only the following information on the firm at year-end 2013: net in
tatuchka [14]

Answer:

8.28%

Explanation:

Given that,

Net income = $10 million

Total debt = $65 million

Debt ratio = 35 percent

Debt ratio = Total debt ÷ Total assets

35 percent = $65 million ÷ Total assets

Total assets = $65 million ÷ 35 percent

                     = $185,714,286

Wave Runnerz's ROE for 2018:

= Net income ÷ Equity

= $10,000,000 ÷ (Total assets - Debt)

= $10,000,000 ÷ ($185,714,286 - $65,000,000)

=  $10,000,000 ÷ $120,714,286

= 0.0828 or 8.28%

6 0
2 years ago
Which of the factors listed below contribute to the market value of a going concern? intangible assets market value of assets va
trasher [3.6K]

Answer:

intangible assets

market value of assets

extra earning power

Explanation:

As an accounting principle, going concern value means the value of a business or its assets considering that the business will continue to operate in the reasonable future. This is the opposite to the value assigned to assets or businesses that are being discarded or liquidated.

When you are trying to valuate a company, you have to consider the fair market value of its assets, its intangible assets, and its earning power (its ability to make higher than average profits).

The past share price is not useful in determining the present of the company and the value of future investments cannot be included until the investments are carried out.

7 0
3 years ago
HOURS
IrinaVladis [17]

Answer:

what's the question

Explanation:

its not said or is. it

3 0
2 years ago
d. Suppose that the increase in input price does not occur but, instead, that productivity increases by 25% percent. What would
worty [1.4K]

Answer:

decreased by 20%

Explanation:

Supposed we have input price of $30,000 and it produced an output of 300 units on the first year of operation. The cost per unit on the first year is $100 each ($30,000/300).

On the second year we still have the same input expense of $30,000 but the productivity output increased by 25%. So we have 375 units produced on the second year’s operation. The new cost per unit would be $30,000/375=$80 per unit.

Therefore we conclude that based on the example given, the new unit cost per product decreases by 20%.

$100-80 = $20

$20/$100 = 20%

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3 years ago
Your employer emailed a question and to all employees to gather data on employee satisfaction what type of research is your comp
Dovator [93]

Answer:

Primary

Explanation:

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