1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
KatRina [158]
3 years ago
6

Blue Water Boats is considering a new project with perpetual cash inflows of $435,000, cash costs of $310,000, and a tax rate of

35 percent. The firm plans to issue $250,000 of debt at an interest rate of 7.3 percent to help finance the initial project cost of $475,000. The levered discount rate is 16.7 percent. What is the net present value of this project?
Business
1 answer:
emmainna [20.7K]3 years ago
6 0

Answer:

$190,494.01

Explanation:

The calculation of net present value is given below:-

Perpetual cash flow          $435,000

Less: Cash cost                 $310,000

Earning before interest

and tax                               $125,000

($435,000 - $310,000)

Less: Interest on debt       $18,250

($250,000 × 7.3%)

Earning before tax            $106,750

($125,000 - $18,250)

Less: Tax                            $37,362.50

($106,750 × 35%)

Net Income                       $69,387.50

($106,750 - $37,362.50)

Present value                    $415,494.01

($69,387.50 ÷ 16.7%)

Less: Initial cost                 $225,000

($475,000 - $250,000)

Net present value              $190,494.01

( $415,494.01 -  $225,000)

You might be interested in
After an extensive advertising campaign, the manager of a company wants to estimate the proportion of potential customers that r
spayn [35]

Answer:

1. Referring to Problem , the manager wants to know the value of the population so the manager uses the sample to estimate the population proportion.

a. True

2. Referring to Problem , point estimate of the population proportion is = 0.45.

a. True

3. Referring to problem , the sample proportion is = 0.45.

b. False

4. Referring to Problem, the manager wants to know the value for the population so the manager uses the sample to estimate the population value

b. False

5. Referring to Problem , the parameter of interest is 54/120 = 0.45.

a. True

Explanation:

a) Data and Calculations:

Sample of potential consumers = 120

Proportion of the sample who recognize the product = 54

Confidence level = 95%

Confidence interval = 0.36 to 0.54

Point estimate = 54/120 = 0.45

b) A point estimate of a population parameter estimates the population parameter as a single value.  The point estimate of the sample mean, x, is also the point estimate of the population mean, μ.  To get the sample proportion, one needs to know the population value.  The sample value divided by the population value gives the sample proportion.

7 0
2 years ago
Coppertone uses a _____ advertising schedule, where it advertises heavily in the months leading up to and during the summer, wit
algol [13]
The answer is flighting advertising schedule. It is a publicizing progression or timing design in which promoting messages are booked to keep running amid interims of time that are isolated by periods in which no publicizing messages show up for the promoted thing.
8 0
3 years ago
Commerce Corporation has a high probability of operating at 40,000 activity hours during the upcoming period, and lower probabil
Zepler [3.9K]

Answer:

Total cost= $877,500

Explanation:

<u> First, we need to calculate the unitary variable cost:</u>

Unitary variable cost= 135,000 / 30,000= $4.5

Unitary variable cost= 180,000 / 40,000= $4.5

Unitary variable cost= 225,000 / 50,000= $4.5

<u>Now, the total cost for 35,000 hours:</u>

Total cost= Unitary variable cost*total number of hours + fixed costs

Total cost= 4.5*35,000 + 720,000

Total cost= $877,500

4 0
2 years ago
Corbel Corporation has two divisions: Division A and Division B. Last month, the company reported a contribution margin of $47,7
LenaWriter [7]

Answer:

$41,650

Explanation:

Contribution margin is the net of sales and variable costs.

Contribution Margin:

Division A = $47,700

Division B = $231,000 x 35% = $80,850

Company calculates the Net Income after deducting The traceable and common fixed costs from the total contribution margin.

Total contribution margin = $47,700 + $80,850 = $128,550

Net Income = Total contribution margin - Traceable Fixed Expense - Common Fixed expenses

$27,200 = $128,550 - $59,700 - Common Fixed expenses

$27,200 = $68,850 - Common Fixed expenses

Common Fixed expenses = $68,850 - $27,200 = $41,650

4 0
3 years ago
Write a 600 word summary in your own words that identifies the main points you learned. Your summary should include at least one
Sveta_85 [38]

Answer:

heck no I'm definitely not writing that for you. ur lazy.

4 0
2 years ago
Read 2 more answers
Other questions:
  • Employee theft and fraud is a costly problem for organizations, estimated to be approximately ________ per worker per year.
    8·1 answer
  • You are asked to be the leader of a task group. You are a new member to the group that is under pressure to meet new production
    12·1 answer
  • What is the best way to judge the success of your communication? How quickly the message is developed Use of jargon Through feed
    15·1 answer
  • A price floor that is set above the normal equilibrium price will lead to: A. An decrease in consumer surplus, a decrease in pro
    6·1 answer
  • What may happen if your job does not require you to use the aptitudes you possess?​
    14·1 answer
  • Which of the following types of inventory describes inventory that has been purchased but not​ processed?A. raw material invento
    13·1 answer
  • First National Bank charges 13.5 percent compounded monthly on its business loans. First United Bank charges 13.8 percent compou
    5·1 answer
  • Retained earnings: Multiple Choice Are never adjusted for anything other than net income or dividends. Represents the amount sha
    12·1 answer
  • Which of the following is considered the more industrial version of hunting?
    10·1 answer
  • Use the graph to answer the question that follows.
    12·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!