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nikitadnepr [17]
3 years ago
15

Internal Rate of Return Manzer Enterprises is considering two independent investments: A new automated materials handling system

that costs $900,000 and will produce net cash inflows of $300,000 at the end of each year for the next four years. A computer-aided manufacturing system that costs $775,000 and will produce labor savings of $400,000 and $500,000 at the end of the first year and second year, respectively. Manzer has a cost of capital of 8 percent. The present value tables provided in Exhibit 19B.1 and Exhibit 19B.2 must be used to solve the following problems. Required:________.
1. Calculate the IRR for the first investment. Enter your answers as whole percentage values (for example, 16% should be entered as "16" in the answer box). Between % and %. Determine if it is acceptable or not.
2. Calculate the IRR of the second investment. Use 12 percent as the first guess. Enter your answers as whole percentage values (for example, 16% should be entered as "16" in the answer box). Between % and %. Comment on its acceptability.
3. What if the cash flows for the first investment are $250,000 instead of $300,000.
Business
1 answer:
Marianna [84]3 years ago
4 0

Answer:

1. IRR for the first investment: 13%

2. IRR for the second investment: 10%

3. IRR for the first investment give changes in cash flow: 4%

Explanation:

IRR is the discount rate that will bring project's net present value to 0. Apply this, we will calculate IRR in each given scenario:

1. -900,000 + (300,000/IRR)/ [ 1 - (1+IRR)^-4] = 0 <=> IRR = 13%

2. -755,000 + 400,000/(1+IRR) + 500,000/(1+IRR)^2 = 0 <=> IRR = 10%

3. -900,000 + (250,000/IRR)/ [ 1 - (1+IRR)^-4] = 0 <=> IRR = 4%

(all the answers have been rounded to whole percentage values as required in the question).

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The following information is available for Blue Spruce Corp. for 2021:
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Answer:

  • Other Comprehensive income = $37,500
  • Comprehensive income = $154,500

Explanation:

Other comprehensive income:

= Realized gain on sale of available-for-sale debt securities  + Unrealized holding gain arising during the period on available-for-sale debt securities - Reclassification adjustment for gains included in net income

= 11,000 + 34,000 - 7,500

= $37,500

Comprehensive income = Net income + Other comprehensive income

= 117,000 + 37,500

= $154,500

6 0
3 years ago
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Answer:

Coupon rate will be 3.08%

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3 years ago
Cash received through the sale of long-term investments would be reported in the statement of cash flows as a a.Cash inflow in t
avanturin [10]

Answer:

b.Cash inflow in the investing activities section.

Explanation:

The cash flow statement shows the cash used or provided by the various activities of an entity during a given period. These activities are categorized into operating, investing and financing activities.

Non current asset sale and purchases are accounted for in the investing section of the cash flow statement as an inflow and an outflow of cash respectively.

Hence, Cash received through the sale of long-term investments would be reported as Cash inflow in the investing activities section.

4 0
3 years ago
Contemporary businesses have embraced leaner corporate hierarchies, simultaneously relying on teams, eliminating division walls,
alisha [4.7K]

Answers:

Option a: authentic.

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Option a. All businesses are in the persuasion business

Option b. Persuasion is more complex and impersonal

Option c. Persuasive techniques are more subtle and misleading

Option d: Persuasive messages are slow to engage audiences

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Explanation:

In business, persuasion is the ability to influence others especially in decision making. Persuasive skills are essential at work as teams and managers leaves traditional command structure and focus instead on influencing others. An individual must be genuinely respectful and authentic that is they are people who are very intuitive and will know any effort to manipulate them. Using authority as a way to persuade does not generate respect. Instead of a blunt,commanding, pushy hard-sell approach, persuaders play on emotions by using flattery, empathy.

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5 0
3 years ago
Robin is granted 1,500 shares of restricted stock from her employer when the stock is trading at a fair market value of $25 per
bija089 [108]

Answer: $13125

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Firstly, we should note that in section 83(B), tax is being paid based on the stock's fair market value. Therefore, the income tax that will be due on this transaction in the year of election will be:

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= 1500 × $25 × 0.35

= $13125

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3 years ago
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