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2 years ago

Malholtra Inc. is considering a project that has the following cash flow and WACC data.

Business

1 answer:

Blababa [14]2 years ago

3 0

Answer:

The correct option is B,15.65%

Explanation:

Modified Internal Rate of Return(MIRR) can be determined by using the excel MIRR function,whose formula is given below:

=MIRR(values,finance rate,reinvestment rate)

The values are the cash inflows and the initial capital outlay of $850

the finance rate is the same as the reinvestment of 10% which is the rate of return that would make the investment present values of cash inflows equal the initial investment

MIRR=15.65% as found in the attached.

Download xlsx

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Joe quits his computer programming job, where he was earning a salary of $65,000 per year, to start his own computer software

Verizon [17]

Answer:

The accounting cost and the economic cost associated with Joe's computer software business is $75,00 and the $165,000 respectively.

Explanation:

The computation of the accounting cost and the economic cost is shown below:

Accounting cost = Other Expenses + Salary paid to himself

= $35000 + $40,000

= $75,000

Economic cost = Accounting cost + Salary expense + Rent expenses

= $75,000 + $65,000 + $25,000

= $165,000

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3 years ago

White Pearl Cosmetics markets skin care products for teenage girls between 16 and 19. In approaching its international markets,

Anna35 [415]

I think (but I’m not sure) it’s global

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2 years ago

Howie Long has just learned he has won a $500,000 prize in the lottery. The lottery has given him two options for receiving the

Contact [7]

This decision will depend on whether or not Howie needs immediate money and the rate of inflation. Assuming there is no inflation, as the issue did not mention it, and Howie prefers the decision that yields the greatest financial reward, simply calculate and lower the tax in each situation, and then compare them.

<u>Scenario 1:</u> Total receipt upon ticket delivery with 46% deduction

46% = 46 \ 100 = 0.46

To find the value to be deducted, let's multiply the total by 0.46

500,000 * 0.46 = $ 230,000

That way Howie would get $ 500,000- $ 230000 = $ 270,000

<u>Scenario 2:</u> 25 installments of $ 36,000 with 25% deduction

The gross total will be 25x $ 36,000 = $ 900,000

Now it is enough to decrease 25% of the total amount, to find the amount of the tax.

25% = 25 \ 100 = 0.25

$ 900,000 * 0.25 = $ 225,000

Finally, simply decrease the amount received by the tax amount:

$ 900,000- $ 225,000 = $ 675,000

Therefore, Howie would be better off if he opted for the installment payment.

8 0

2 years ago

PAW Industries has 5 million shares of common stock outstanding with a market price of $8.00 per share. The company also has out

AlladinOne [14]

Answer:

A. 10.14%

Explanation:

1.Market value of PAW common stock:5,000,000*8=$40,000,000

2.Market value of PAW outstanding preferred stock=$10,000,000

3.Market value of PAW bonds outstanding=96,000,000(100,000*1000*96%)

Total Market value(1+2+3)=146,000,000

4.Cost of equity amount on common stock(19%*40,000,000)=7,600,000

5.Cost of preferred stock amount (15%*10,000,000)=$1,500,000

6.After tax cost of Debt amount(9%*66%*96,000,000)=$5,702,400

Total cost amount(4+5+6)=14,802,400

The WACC can be calcualted as: Total cost amount/Total market value

14,802,400/146,000,000=10.14%

The answer should be A. 10.14%

3 0

3 years ago

Definition of economic costs manuel lives in san diego and runs a business that sells guitars. in an average year, he re

Mice21 [21]

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3 years ago