Answer:
e) 14.19%
Explanation:
Let IRR be x%
. At IRR, Present value of inflows = Present value of outflows.
167,000 = 22000/1.0x + 22000/1.0x^2 + 22000/1.0x^3 + 22000/1.0x^4 + 22000/1.0x^5 + 30,000/1.0x^6 + 30,000/1.0x^7 + 30,000/1.0x^8 + 30,000/1.0x^9 + 30,000/1.0x^10 + 43000/1.0x^11 + 43000/1.0x^12 + 43000/1.0x^13 + 43000/1.0x^14 + 43000/1.0x^15
x = 0.1419
x = 14.19%
Hence, the internal rate of return for the project is 14.19%
Answer:
a. $12,000
b. $32,000
c. $17,000
Explanation:
The computations are shown below:
a. Net income = (Income tax paid ÷ Tax rate) – Income tax paid
Net income = ($3,000 ÷ 20%) - $3,000
= $12,000
b. Revenues = Cost of goods sold + Income tax paid + Administration expense + Interest paid + Depreciation + Net income
= $9,000 + $3,000 + $4,000 + $2,000 + $2,000 + $12,000
= $32,000
3. EBIT = Net income + Interest expense + Taxes
= $12,000 + $2,000 + $3,000
= $17,000
Answer:
Part 2 Which of the following transactions does not involve an accrual?
- Recording the pre-payment of two years' worth of insurance. THIS IS AN ASSET EXCHANGE TRANSACTION SINCE IT CREATES AN ASSET ACCOUNT, PREPAID INSURANCE, THAT DECREASES AS TIME PASSES
Part 3 The recognition of an expense may be accompanied by which of the following?
- An increase in liabilities. EXPENSES ARE NOT ALWAYS PAID IMMEDIATELY, FOR EXAMPLE UTILITIES, THEY FORM A SHORT TERM LIABILITY UNTIL PAID.
Part 4 The adjusting entry to recognize work completed on unearned revenue involves which of the following?
- A decrease in liabilities and an increase in equity. UNEARNED REVENUE IS A LIABILITY ACCOUNT, AND AS THE WORK IS COMPLETED, REVENUE SHOULD INCREASE, THEREFORE EQUITY WILL INCREASE.
Part 5 Which of the following would cause net income on the accrual basis to be different from (either higher or lower than) "cash provided by operating activities" on the statement of cash flows?
- Paid advertising expense. IF THE COMPANY PAID ADVERTISING EXPENSES ON ACCOUNT.
Explanation:
Question Completion:
If Delicious Catering had recorded transactions using the Accrual method, how much net income (loss) would they have recorded for the month of May? If there is a loss, enter it with parentheses or a negative sign.
Answer:
Delicious Catering
Using the Accrual method, Delicious Catering would have recorded for the month a net income of $1,670.
Explanation:
Data and Calculations:
Prepaid Rent for 3 months = $1,500
Rent expense for the month = $500 ($1,500/3)
Utilities expense = $190
Service Revenue:
Cash for meals = $2,400
Credit 2,000
Total $4,400
Salary Expense = !,700
Depreciation expense = $340
Kitchen Equipment = $2,500
Income Statement for the month of May:
Service Revenue $4,400
Expenses:
Rent $500
Utilities expense 190
Salary expense 1,700
Depreciation expense 340
Total expenses $2,730
Net Income $1,670
Is that really a question... I hope not.
