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BARSIC [14]
3 years ago
6

A company is considering an iron ore extraction project that requires an initial investment of​ $1,400,000 and will yield annual

cash inflows of​ $613,228 for three years. The​ company's discount rate is​ 9%. Calculate IRR. Present value of ordinary annuity of​ $1:
​10% ​12% ​14% ​15% ​ 16% ​18% ​20%

1 0.909 0.893 0.877 0.870 0.862 0.847 0.833

2 1.736 1.690 1.647 1.626 1.605 1.566 1.528

3 2.487 2.402 2.322 2.283 2.246 2.174 2.106

4 3.170 3.037 2.914 2.855 2.798 2.690 2.589


a. 13%

b. 15%

c. 14%

d. 17%
Business
1 answer:
Akimi4 [234]3 years ago
5 0

Answer:

b. 15% 

Explanation:

IRR is the discount rate that equates the after tax cash flows from an investment to the amount invested.

IRR can be calculated using a financial calculator:

Cash flow in year 0 = $-1,400,000 

Cash flow each year for 3 years = $613,228

IRR = 15%

To find the IRR using a financial calacutor:

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 IRR button and then press the compute button.

I hope my answer helps you

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If an = 3n - 2 , find a2

Explanation:

If an = 3n - 2 , find a2If an = 3n - 2 , find a2

3 0
3 years ago
Optimus Company manufactures a variety of tools and industrial equipment. The company operates through three divisions. Each div
PIT_PIT [208]

Answer:

OPTIMUS COMPANY

Home Division Responsibility Report For the Year Ended December 31, 2020

The report is attached in form of a variance report with comments.  Where the variance is not indicated, it means that it was neither favorable nor unfavorable.

Explanation:

A responsibility report is usually presented by a division that is an investment center.  An investment center has responsibility for return on investments.

The investment center takes charge of the cost, revenue, profit, and investments of the division.  It is expected to produce returns on its investment that will be favorable to the shareholders of the company.  It is directly responsible for profitability of the division vis-a-vis the capital investments made in the center.  It is unlike other divisions like cost center, revenue center, and profit center, which narrowly report their performances in accordance with their responsibilities.

This is why it does not only report on the cost, but also the revenue, the profit and the returns on investment achieved during a period.  An investment center is, therefore, the largest division of an entity.

Download xlsx
3 0
3 years ago
Petromax Enterprises uses a continuous review inventory control system for one of its SKUs. The following information is availab
SVETLANKA909090 [29]

Answer:

  • Economic order quantity= 1406 units
  • Safety Stock= 630 units
  • Reorder Point= 14130 units

Explanation:

Given Demand D= 78,000units/year

Ordering cost S = $38.00/order

Holding cost H = $3.00unit/year

Average lead time = 9 weeks

Standard deviation of weekly demand = 120 units

a) Economic order quantity:

EOQ = \sqrt{(2*D*S)/H}

EOQ = \sqrt{(2*78000*38)/3}

1405.7 = <u>1406 Units</u>

b)<u> Safety Stock:</u>

Weekly demand = 78000/52 =1500 units

Standard deviation of weekly demand = 120 units

Lead time is 9 weeks

Using the normsinv() in excel the Z value for the desired 96% service level is 1.75

Safety stock = z\sigma _{d}\sqrt{L}

= 1.75*120*\sqrt{9}

= 630 units

Reorder point = average lead time demand + safety stock

= lead time * weekly demand + saftey stock

  = 9*1500 + 630

  = 13500 + 630

Reorder point = 14130

8 0
3 years ago
Read 2 more answers
Suppose Chef Kitchen manufactures cast iron skillets. One model is a​ 10-inch skillet that sells for $ 28 . Chef Kitchen project
Lerok [7]

Answer:

production schedule for July = 815 10-inch skillets

Explanation:

price of 10-inch skillet $28

projected sales 625 units

costs:

  • direct materials $6
  • direct labor $3
  • manufacturing overhead $5
  • sales and administrative expenses $1,000

beginning inventory 60 units

ending inventory 40% of August sales

production during July = (projected sales - beginning inventory) + (40% x projected sales August) = (625 units - 60 units) + (40% x 625 units) = 565 units + 250 units = 815 10-inch skillets

6 0
3 years ago
Ursula wants to buy a $19,000 used car. She has savings of $2,000 plus an $800 trade-in. She wants her monthly payments to be ab
kow [346]

Answer:

Explanation:

Ursula needs $19,000 or in other words FV (Future value)

She has savings of $2000 and trade in of $800 or in other words she has $2800. She needs to borrow $16200 (19000-2800)

Also, she wants monthly payment to be $282. To find which answer fits best, let's check each of them.

A) APR =78% or mothly rate of 78/12 = 6.5%; 48 months

Using financial calculator:

Rate = 6.5%

n = 48

PV = $16200

Find PMT? PMT = 11068

This is not the right answer

B) APR = 78%, monthly rate=6.5%

n = 60

PV = $16200

Find PMT? PMT = 1077.6

This is not the right answer

C) APR = 7.8%; monthly 0.65%

n =72

PV = $16200

Find PMT? PMT = 282.4

This is the correct option

Answer is - C

6 0
3 years ago
Read 2 more answers
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