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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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One key for sport organizations to use market segmentation effectively involves integrating the strategy with a DBM or CRM syste
Ede4ka [16]

Answer:

TRUE.

Explanation:

One key for sport organizations to use market segmentation effectively involves integrating the strategy with a DBM or CRM system to pinpoint which segments can be contacted. Both DBM and CRM systems can give an organization very valid and reliable information about their customers which then managers can use to form patterns and analyse trends and buying habits of the customers. This information can be easily used for effective targeting. Managers can easily know which segments they should target and how sales can be increased in that particular segment. What offers should be sent to that specific segment.

4 0
3 years ago
Travis has agreed to invest $16,000 in a partnership with his sister and brother-in-law. He does not intend to actively work in
german

Answer:

D. Limited partner

Explanation:

Limited partner -

It is one of the owner of a company or organization , where the liability of the firm's debt is not allowed to raise than the other investor of the company .

Limited partner is also known as silent partners .

The limited partner has very restricted voting rights on the business of the company , and even is not involved in the day - to - day activity of the business .

The role of the limited partner is to invests some amount of money for exchange of the shares in a partnership .

Hence , from the information of the question ,

Travis is a Limited partner in the given partnership .

6 0
3 years ago
In making the best economic choices, consumers compare the benefits of the choice to:.
ikadub [295]

In making the best economic choices, consumers compare the benefits of the choice to the cost of the choice.

<h3>How to make the best economic choices?</h3>

In making the best economic choices, the costs of the choice should be compared with the benefits of the choice. The choice should only be made when the benefits of making the choice exceeds the cost of the choice.

To learn more about costs, please check: brainly.com/question/14915288

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5 0
1 year ago
On January 1, 2011 Grace Company had an $13,000 balance in the Accounts Receivable account and a zero balance in the Allowance f
Lubov Fominskaja [6]

Answer:

The amount of uncollectible accounts expense recognized on the 2011 income statement is:

$6,600.

Explanation:

As the amount of uncollectible accounts are expressed as percentage of the total sales, then the amount is $6,600

  • Initial Balance  

Dr Accounts Receivable  $ 13.000  

During 2011, Grace provided $55,000 of service on account  

Dr Accounts Receivable  $ 55.000  

Cr SALES $ 55.000  

  • The company collected $48,100 cash from account receivable.  

Dr CASH $ 48.100  

Cr Accounts Receivable  $ 48.100  

  • Uncollectible accounts are estimated to be 12% of sales on account  

Dr Bad Debt Expense $ 6.600  

Cr Allowance for Uncollectible Accounts $ 6.600  

If the company applies the allowance method, it means that the account Allowance for Uncollectible Accounts must show as balance the % of accounts receivables as CREDIT.

Bad accounts are those credits granted by the company and there is no possibility of being charged.

"When customers buy products on credits but the company cannot collect the debt, then it's necessary  to cancel the unpaid invoice as uncollectible."

One way is to directly cancel bad debts at the time it was decided that the credit is bad, the total amount reported as bad debt expenses negatively affect the income statement and the accounts receivable are reduced by the same amount, less assets

The other way is to determine a percentage of the total amount of accounts receivable as bad debts, there are many ways to analyze accounts receivable and calculate the value of bad debts.

When the company has the percentage of uncollectible accounts, the required journal entry is Bad Expenses (debit) with Reserve for Bad Accounts (credit)

At the time of cancellation, since the expenses were recognized before, we only use the Allowance for Uncollectible Accounts (Debit)  with accounts receivable (credit), with this we are recognizing the bad credit of the company.

7 0
3 years ago
What you give up for taking some action is called the . is falling when marginal cost is below it and rising when marginal cost
Nezavi [6.7K]
<span>What you give up for taking some action is called the opportunity cost.

Average total cost is falling when marginal cost is below it and rising when marginal cost is above it.

A cost that does not depend on the quantity produced is a fixed cost.

In the ice-cream industry in the short run, variable cost includes the cost of cream and sugar but not the cost of the factory.

Profits equal total revenue minus total cost.

The cost of producing an extra unit of output is the marginal cost.</span>
4 0
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