Use the___icon to delete a record ? A.* B.= C.X D.&

In working on a bid for project you have determined that $245,000 of fixed assets will be required and that they will be depreci

mote1985 [20]

Answer:

Question 1:

required investment $245,000

depreciation expense per year = ($245,00 - $23,200) / 5 = $44,360

you will also require $15,000 in working capital

annual cash costs = $68,500

what is the minimum amount of cash sales for accepting the project:

net cash flow₁ = {[(sales revenue - $68,500 - $44,360) x 0.65] + $44,360} / 1.14 = (0.65SR - $28,999) / 1.14 = 0.5702SR - $25,437.72

net cash flow₂ = {[(sales revenue - $68,500 - $44,360) x 0.65] + $44,360} / 1.14² = (0.65SR - $28,999) / 1.14² = 0.5002SR - $22,313.79

net cash flow₃ = {[(sales revenue - $68,500 - $44,360) x 0.65] + $44,360} / 1.14³ = (0.65SR - $28,999) / 1.14³ = 0.4387SR - $19,573.50

net cash flow₄ = {[(sales revenue - $68,500 - $44,360) x 0.65] + $44,360} / 1.14⁴ = (0.65SR - $28,999) / 1.14⁴ = 0.3849SR - $17,169.74

net cash flow₅ = {[(sales revenue - $68,500 - $44,360) x 0.65] + $44,360 + $15,000} / 1.14⁵ = (0.65SR - $13,999) / 1.14⁵ = 0.3376SR - $7,270.64

NPV = -initial outlay + cash flows

NPV = 0

initial outlay = cash flows

$260,000 = 0.5702SR - $25,437.72 + 0.5002SR - $22,313.79 + 0.4387SR - $19,573.50 + 0.3849SR - $17,169.74 + 0.3376SR - $7,270.64

$260,000 = 2.2316SR - $91,765.39

$351,765.39 = 2.2316SR

sales revenue = $351,765.39 / 2.2316 = $157,629.23

the closest answer is B = $155,119, but its NPV will be negative.

so we have to select C = $162,515.75 that results in an NPV = $10,887.

Question 2:

The correct answer is D. return on equity will increase.

If you lower your costs while your sales remain the same, your profits will increase as well as your ROE.

7 0

3 years ago

Brunette Company is contemplating investing in a new piece of manufacturing machinery. The amount to be invested is $180,000. Th

diamong [38]

Answer:

No, as the net present value comes in negative

Explanation:

As we know that

Net present value = Present value of cash inflows - Initial investment

where,

Present value os $163,000

And, the initial investment is $180,000

Now placing these values to the above formula

So, the net present value is

= $163,000 - $180,000

= -$17,000

Therefore the company should not accept the project as net present value is in negative that is -$17,000

6 0

3 years ago

Exercise 5-15B Record notes receivable and interest revenue (LO5-7) On March 1, Company A provides legal services to Company B r

Alex787 [66]

Answer:

March 1: Note acceptance

Debit Note receivable $9,100

Credit Accounts receivable $9,100

(To record note receivable from Company B)

Sept 1: Cash collection

Debit Cash $9,100

Credit Note receivable $9,100

(To record cash collection of note receivable)

Debit Cash $364

Credit Interest receivable $364

(To record cash collection of interest receivable on note)

Explanation:

Note is a promissory note with a written promise made by the borrower to the lender (payee) to pay a certain, definite sum at a specified date.

Interest revenue on the note is calculated as: Principal x Interest Rate x Time

The total interest revenue is $9,100 x 8%/12 x 6 months = $364.

Monthly interest revenue is therefore $364 / 6 months = $60.67.

The 6 months is from March 1 to Sept. 1.

On a monthly basis, Company A would accrue for the interest revenue as follows:

Debit Interest receivable $60.67

Credit Interest revenue $60.67

(Interest accrual on notes receivable)

6 0

3 years ago

Who is John Kulczyk ?

denpristay [2]

Are you sure about the name of this guy? I have found much information about Jan Kulczyk who was Poland's richest individual. If you want, I may personally drop you a link about him.

7 0

3 years ago

Lydia owns a fashion store for women, and her main focus is on providing quality customer service. The staff is trained to treat

elena55 [62]

Answer:

D) normative control.

Explanation:

In this case, Lydia is using normative control so as to train her staffs to treat customers with utmost care and provide them with reliable fashion advice.

In order to achieve this, Lydia carefully chooses her staff and appoints people who are attentive, friendly, and have a good fashion sense.

Normative control is a strategy that governs the behavior of employees through the use of beliefs and values called norms rather than the written procedures and policies.

8 0

3 years ago

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