Why is national wealth important?

Flannery Corporation owns machinery with a book value of $520,000. It is estimated that the machinery will generate future cash

Aleonysh [2.5K]

Answer:

(d)$105,000.

Explanation:

Since the book value is more than the generated future cash flows so book value cannot be recovered. In this case, the generated future cash flows are ignored

In this scenario, we compare the values between book value and the fair value of machinery, the difference would be the loss on impairment of the asset

In mathematically,

= Book value of machinery - fair value of machinery

= $520,000 - $415,000

= $105,000

5 0

3 years ago

JJ MoneyTree Inc.'s free cash flow during the just-ended year (t = 0) was $156 million, and its FCF is expected to grow at a con

alina1380 [7]

Answer:

$2,216.28 million

Explanation:

JJ MoneyTree Inc firm's total corporate value shall be determined through the following mentioned formula:

Total Corporate value= [(Free Cash Flow(1+g))/(WACC-g)]

In the given question:

Free Cash Flow=$156 million

g=constant growth rate=3%

WACC=10.25%

Total Corporate value= [(156(1+3%))/(10.25%-3%)]

=$2,216.28 million

8 0

3 years ago

I-Brew Inc. is thinking of starting a new line of coffee business: coffee trucks will deliver coffee from popular brands to cust

Bumek [7]

Answer:

$50,675.10

Explanation:

Net present value is the present value of after-tax cash flows from an investment less the amount invested.

NPV can be calculated using a financial calculator

Only projects with a positive NPV should be accepted. A project with a negative NPV should not be chosen because it isn't profitable.

When choosing between positive NPV projects, choose the project with the highest NPV first because it is the most profitable.

Cash flow in year 0 = -$487,000 + $45,000

Cash flow in year 1 =$153,000

Cash flow in year 2 = $153,000

Cash flow in year 3 = $153,000 + $292,000 + $45,000

I = 14%

NPV = $50,675.10

To find the NPV using a financial calculator:

1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.

2. after inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.

3. Press compute

4 0

3 years ago

A shift in the sales mix from high-margin items to low-margin items can cause total profits to decrease even though total sales

g100num [7]

Answer: True

Explanation:

Low Margin items refer to those that have a lower profit per unit because their costs may be higher in relation to their selling price.

High margin items are the opposite.

If the company switches from High Margin items to Low margin items, they will face a situation where they are incurring more costs per sale which would drive their profits down even if sales increase.

The optimal mix for a company should have more high margin items than low margin items.

4 0

3 years ago

Suppose that demand for smartphones is inelastic and the supply of smartphones is elastic. If the government imposes a $10 per s

Sloan [31]

Answer:

e

Explanation:

6 0

3 years ago

Why is national wealth​ important?

Why is national wealth important?