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puteri [66]
3 years ago
13

A series of cash flows may not always necessarily be an annuity. Cash flows can also be uneven and variable in amount, but the c

oncept of the time value of money will continue to apply. Consider the following case: The Purple Lion Beverage Company expects the following cash flows from its manufacturing plant in Palau over the next five years: Annual Cash Flows Year 1 Year 2 Year 3 Year 4 Year 5 $250,000 $37,500 $180,000 $300,000 $550,000 The CFO of the company believes that an appropriate annual interest rate on this investment is 6.5%. What is the present value of this uneven cash flow stream, rounded to the nearest whole dollar
Business
1 answer:
devlian [24]3 years ago
6 0

Answer:

$1,051,448

Explanation:

Present value is the sum of discounted cash flows.

present value can be calculated using a financial calculator

Cash flow in year 1 =  $250,000

Cash flow in year 2 = $37,500

Cash flow in year 3 =  $180,000

Cash flow in year 4 =  $300,000

Cash flow in year 5 =  $550,000

I = 6.5%

Present value = $1,051,448

To find the PV 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  

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Answer:

The correct answer is C. Bananas are already grown for consumption so no extra energy or resources will be used to create the husks.

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7 0
3 years ago
In a finance lease:
Maslowich

Answer:

A) the lessee records an asset and a liability for the present value of lease payments.

Explanation:

In a finance lease, the lessee business must estimate the present value of its obligations under the lease contract (using the lease's interest rate as the discount rate) and record it in the balance sheet as:

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Baylor Service Corp. redeemed $1,000 of gift cards that customers used to pay for services that were performed by the company. T
Nitella [24]

Answer:

B. Unearned Revenue and a credit to Service Revenue.

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Regarding the statute of limitations on additional assessments of tax by the IRS, select the applicable date in each of the foll
-Dominant- [34]

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3 years ago
Which of the following can cause a run-time error?
Stolb23 [73]

Answer:

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Explanation:

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