1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Shkiper50 [21]
3 years ago
11

Industrial Machines needs to purchase a new machine costing $1.25 million. Management is estimating the machine will generate ca

sh inflows of $210,000 the first year and $350,000 for the following four years. If management requires a minimum 10 percent rate of return, should the firm purchase this particular machine based on its IRR?
Business
1 answer:
max2010maxim [7]3 years ago
8 0

Answer:

The firm shouldn't purchase the machine because the IRR is less than the required minimum

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 calcuator

Cash flow in year 0 = $-1.25 million.

Cash flow in year 1 = $210,000

Cash flow in year 2 to 5 = $350,000

IRR = 8.51%

The firm shouldn't purchase the machine because the IRR is less than the required minimum

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

You might be interested in
The statement of cash flows for Baldwin Company shows what happens in the Cash account during the year. It can be seen as a summ
gavmur [86]

Answer:

A) It is a use of cash, and will be shown in the investing section as a subtraction.

B) Depreciation Expense

C) Chester’s long-term debt will rise by $10,000,000

D) Broad differentiation

E) Andrews ROE will increase.

Explanation:

A) As the company will do a cash dibursement will be considered cash use and because is investing on it to increase future cash flow

B) A period cost is a cost which cannot be capitalized into an asset. As cost which occur as the time passes over the years Which is the case for depreciation expense

C) bonds payable for 10,000,000 will be recorded

the leverage is a ratio to analize the firm it does not influence the accounting

D) The company differenciate his products from the rest of their competitors in a great variety of products rather than a single buyer segment.

E) ROE will increase as the leverage makes the debt weight increase while the equity weight (proportion of the company owned by the stockholders)

For the rest ofthe options the information provided is insufficient please do another question with the information

8 0
3 years ago
during 2017, trey corporation accrued warranty expense based on 3.5% of net sales revenue. during 2018, trey corporation revised
aleksandr82 [10.1K]

For the year ended December 31, 2018, the warranty-related entry would include a debit to warranty expense of $80,000.

If it's miles impracticable to determine the cumulative impact of applying a trade-in accounting principle, then the new accounting principle should be applied prospectively as of the earliest date practicable. in this situation, the disclosures discussed in FSP 30.4.

Cumulative effect equals the difference between the actual retained profits suggested at the beginning of the yr using the antique approach and the retained income that would have been reported at the start of the year if the brand-new technique had been utilized in earlier years.

Learn more about warranty here brainly.com/question/14227081

#SPJ4

8 0
1 year ago
Rondelle, the manager of a busy hair salon, knows that she needs to entrust many of her tasks to supervisors and other employees
astraxan [27]

Answer: Delegation

Explanation: Delegation in the context above may simply be explained as the process whereby there is a shift in the responsibility of one person to another who will function as a deputy. When an individual usually a superior, who is the actual overseer of a certain process or routine entrusts or handover to another person due to one reason or the other such as tight scheduling or shortage of personnel. In most cases the new handler is usually a lower ranking official in the task such as in the scenario above and as such, the expected rate of output is slightly reduced.

8 0
3 years ago
Henry and claudia can claim alyssa for which tax benefits
34kurt
Considering that Alyssa is their young daughter, United States has an  astounding number of tax credits and deductions that are geared towards taxpayers with children, they could claim: Credits, Deductions, exemption, Education Benefits, Education Deductions, and Education Credits, among others.
6 0
3 years ago
Which account has the lowest minimum balance requirement? Bank Account Terms and Conditions Account A Account B Account C Accoun
Sedaia [141]

Answer:

d

Explanation:

3 0
3 years ago
Read 2 more answers
Other questions:
  • A business operated at 100% of capacity during its first month, with the following results: Sales (90 units) $90,000 Production
    14·1 answer
  • Which of the following is a depository financial institution
    12·1 answer
  • According to the video, what are some things that Human Resources Managers do? Check all that apply
    8·1 answer
  • Due to erratic sales of its sole product—a high-capacity battery for laptop computers—PEM, Inc., has been experiencing financial
    15·1 answer
  • The Coffee Cup Company had a credit balance of $500 in interest payable at the beginning of the period, and a credit balance of
    13·1 answer
  • Type the correct answer in the box. Spell all words correctly. Henry works at a newspaper agency. Here, he works with the editor
    8·1 answer
  • • Explain the process of copying and pasting from one picture to another one.
    14·2 answers
  • What is a credit line?
    5·2 answers
  • Write an essay about the effect of cost and production on our economy.
    10·1 answer
  • In analyzing the chart, what is the relationship between fees and dollar advanced? What do you think that payday lenders base th
    5·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!