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3 years ago

What is the interest rate on a three-year investment with a future value of $1000 and a present value of $863.84?

1 answer:

3 0

Use
$F=P(1+i)^n$

Substituting
F=1000, P=863.84, n=3
solve for i
$1000=863.84^(1+i)^3$
solving for i
=>
$i=(\frac{1000}{863.84})^{\frac{1}{3}}-1$
=0.0500

Answer: the annual interest rate is 5%

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4. Operating Cash Flow [L02] In comparing accounting net income and operating cash flow, name two items you typically find in ne

Mademuasel [1]

Answer:

1. Depreciation or Amortization of Assets

2.Profit or Loss on sale of Assets

Explanation:

Operating Cash Flow is very different to Net Income. The earlier represent cash movement and the latter represent profit movement.Cash and profit literally are different.

So in the profit calculation you would find some non-cash items that include estimate of depreciation expense or amortization cost of intangible assets or a profit or loss on sale of a PPE item.

Whereas in Operating Cash Flow determination only cash items are considered and all non-cash items are removed from profit of the year to reach an amount of Operating Cash Flow.

8 0

3 years ago

Quip Corporation wants to purchase a new machine for $300,000. Management predicts that the machine will produce sales of $200,0

butalik [34]

Answer:

net present value NPV = $79800

so correct option is D) $79,800

Explanation:

solution

we knw that Net Present value = PV of cash inflow - PV of cash outflow ............1

so here PV of cash outflow = $300000

and Net sales = $200000

expenses = $80000

Depreciation = $\frac{300000-50000}{5}$

Depreciation = $50000

so Net income before taxes = Net sales - Depreciation - expenses

Net income before taxes = $200000 - $80000 - $50000

Net income before taxes = $70000

and Tax expenses @ 40% = $28000

Net income = Net income before taxes - Tax expenses

Net income = $70000 - $28000

Net income = $42000

and

Depreciation = $50000

Net cash inflow = Net income + Depreciation

Net cash inflow = $42000 + $50000

Net cash inflow = $92000

and

PVIFA @ 10% 5 years = $3.7908

PV of cash inflow = $348755

PV of salvage value = $50000 ×0.6209

PV of salvage value = $31045

and

so here Total PV of total cash inflow = $379800

and

net present value NPV = Total PV of total cash inflow - PV of cash outflow

net present value NPV = $379800 - $300000

net present value NPV = $79800

so correct option is D) $79,800

7 0

3 years ago

An investor borrows an amount at an annual effective interest rate of 5% and will repay all interest and principal in a lump sum

Ghella [55]

Answer:

d. 101

Explanation:

first we must determine the amount of the loan:

PV of face value = $1,000 / (1 + 3%)²⁰ = $553.68

PV of coupon payments = $40 x 14.877 (PV annuity factor, 3%, 20 periods) = $595.08

Loan amount = $1,148.76

Future value of the loan = $1,148.76 x (1 + 5%)¹⁰ = $1,871.21

You will receive 20 coupon payments of $40 each, which will be reinvested at 2% semiannual rate. You will also receive $1,000 corresponding to the face value of the bond.

Future value of the coupon payments = $40 x 24.297 (FV annuity factor, 2%, 20 periods)] = $971.88

Total money received at the end of the 10 year period = $971.88 + $1,000 = $1,971.88

Gain = $1,971.88 - $1,871.21 = $100.67 ≈ $101

7 0

2 years ago

Wanna join a pad let with me, ill send li nk,

ValentinkaMS [17]

No thanks im good thanks for asking tho

5 0

3 years ago

Happy Maids cleans commercial buildings. In March, Happy Maids started and completed two jobs, Job 1000 and Job 1001. The job co

vodomira [7]

Answer:

C :Job 1000, $1,860; Job 1001, $3,100

Explanation:

The computation of the total cost is shown below:

For Job 1000:

= Direct materials + Direct labor hours × wage rate per hour × Direct labor hours × overhead rate per hour

= $1,200 + 30 × $15 + 30 × $7

= $1,200 + $450 + $210

= $1,860

For Job 1001:

= Direct materials + Direct labor hours × wage rate per hour × Direct labor hours × overhead rate per hour

= $2,000 + 50 × $15 + 50 × $7

= $2,000 + $750 + $350

= $3,100

5 0

3 years ago