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a project that will last for 8 years is expected to have equal annual cash flows of $97,900. If the required return is 7.6 perce

iVinArrow [24]

Question:

MC algo 5-28 Calculating NPV A project that will last for 8 years is expected to have equal annual cash flows of $97,900. If the required return is 7.6 percent, what maximum initial investment would make the project acceptable?

Multiple Choice $516,751.56 $571,237.51 $1,026,395.85 $482,301.46 $550,008.71

Answer:

PV of cash inflow = $571,237.5

Explanation:

T<em>he maximum initial investment amount to be paid is the present value of the series of the annual cash inflow discounted at the opportunity cost rate of 7.6% per annum. </em>

<em>In other words,the maximum to be paid for the investment should be equal to the value today of the series of eight equal annual cash flow of $97,900 discounted at 7.6%</em>

This is given in the relationship below:

PV of cash inflow = A ×( 1- (1+r)^(-n))/r )

A- equal annual cash - 97,900. r-rate of return - 7.6%, n-number of years- 8

PV = 97,900 × ( 1 - (1+0.076)^(-8)/0.76)= 571,237.5

PV of cash inflow = $571,237.5

3 0

3 years ago

On January 1, 2021, Gundy Enterprises purchases an office building for $305,000, paying $55,000 down and borrowing the remaining

wel

Answer:

1. Debit Credit

1/1/2021

Buildings $305,000

Cash $55,000

Mortgage payable $250,000

2. Date Cash paid interest expense decrease in CV Carrying value

1/1/2021 $250,000

1/31/2021 $3,166.89 $1875.00 $1,291.89 $248,708.11

2/28/2021 $3,166.89 $1865.31 $1301.58 $247,406.53

3 a. Debit Credit

12/31/2021

interest expense $1,875

mortgage payable $1,291.89

cash $3,166.89

3 b. The amount of firts payment that goes to interest expense is 1,875 and to reduce the cv is $1,291.89

Explanation:

1. The purchase of the building on January 1, 2021 would be record as follows:

Debit Credit

1/1/2021

Buildings $305,000

Cash $55,000

Mortgage payable $250,000

2. The first three rows of an amortization schedule would be as follows:

Date Cash paid interest expense decrease in CV Carrying value

1/1/2021 $250,000

1/31/2021 $3,166.89 $1875.00 $1,291.89 $248,708.11

2/28/2021 $3,166.89 $1865.31 $1301.58 $247,406.53

3 a. The first monthly mortgage payment on January 31, 2021 record would be as follows:

Debit Credit

12/31/2021

interest expense $1,875

mortgage payable $1,291.89

cash $3,166.89

3 b.

The amount of firts payment that goes to interest expense is 1,875 and to reduce the cv is $1,291.89

7 0

3 years ago

hoa [83]

Answer:

Explained below:

Explanation:

The basic similarity between TQM and Six Sigma quality-management techniques is that each one is a quality control approach and the basic difference between Six Sigma and TQM is the method that each one addresses quality check.TQM determines quality up to that level to which a product attends standards designed inside the company while Six Sigma trades the representation of quality to a relational one, maintaining that quality is based on the fewer number of lacks, which is necessary to be eliminated as much as attainable.

6 0

4 years ago

QS 7-5 Allowance method for bad debts LO P2 Gomez Corp. uses the allowance method to account for uncollectibles. On January 31,

Kaylis [27]

Answer:

Jan 31

Dr Allowance for doubtful accounts $2,800

Cr Accounts receivable—C. Green $2,800

Mar 09

Dr Accounts receivable—C. Green $2,300

Cr Allowance for doubtful accounts $2,300

Mar 09

Dr Cash $2,300

Cr Accounts receivable—C. Green $2,300

Explanation:

1. Preparation of the journal entry for January 31

Jan 31

Dr Allowance for doubtful accounts $2,800

Cr Accounts receivable—C. Green $2,800

2. Preparation of the journal entries for March 9

Mar 09

Dr Accounts receivable—C. Green $2,300

Cr Allowance for doubtful accounts $2,300

Mar 09

Dr Cash $2,300

Cr Accounts receivable—C. Green $2,300

6 0

3 years ago

What approaches do supermarkets use to offset variations in customer traffic intensity?

Julli [10]

Based on earlier studies or history of the supermarket they would know when the busy times of the day are, with that they would deliver in more crowd.
They would need the various server systems to cost out how many crowds they would want to have worked to help limit the number of customers in line and their wait time in line.

3 0

4 years ago