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Alex_Xolod [135]
3 years ago
15

You are offered a chance to buy an asset for $200,500 that is expected to produce cash flows of $100,000 at the end of Year 1, $

42,000 at the end of Year 2, $52,850 at the end of Year 3, and $43,250 at the end of Year 4. What rate of return (IRR) would you earn if you bought this asset?
Please solve without Excel and show formulas used!
Business
1 answer:
Lapatulllka [165]3 years ago
3 0

Answer:

What rate of return (IRR) would you earn if you bought this asset?

8,48%

Explanation:

To find the IRR it's necessary to know which is the discount rate that applied to the cash flow of the assets gives a value that compensate the investment of $200,500.

Year 1   $100.000  / (1+0,0848)^1    =  $92.182    

Year 2   $100.000  / (1+0,0848)^2  =  $35.690  

Year 3   $100.000  / (1+0,0848)^3  =   $41.398  

Year 4   $100.000  / (1+0,0848)^4  =   $31.230  

Total Present Value of Cash  Flow=

$92.182  + $35.690 + $41.398 + $31.230 =  $200,500

There is no way to find the IRR without Excel, the only way is to try with different rates in the current cash flow formula.

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Answer:

1.March 1

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Cr Unearned Revenue 7,500

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Dr Unearned Revenue 7,500

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Explanation:

1.Preparation of journal entry for March 1 journal entry

Based on the information given we were told that the designer receives the amount of $7,500 as a check in advance from a customer which means that the journal entry will be:

Dr Cash 7,500

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2.Preparation of the July 31 journal entry.

Based on the information given we were told that the designer completed the design work for this customer which means that the journal entry will be:

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7 0
3 years ago
A woman walks into a store and steals $100 she comes back and buys $70 worth of goods with the $100, the owner gives her$30 in c
deff fn [24]
The answer is $100.

Amount she steals= $100
Amount she bought goods= $70
Amount the owner returns as change = $30
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Amount she steals +amount of goods - amount she gives to owner + amount owner returns as change = $100 + $70 - $100 + $30 = $200 - $100 = $100
8 0
3 years ago
Staley company has 30 order operators with associated costs of $1,000,000 per year. Staley calculated that each operator worked
Ad libitum [116K]

Answer:

$20.833

Explanation:

Given that,

Number of order operators = 30

Cost associated with these order = $1,000,000 per year

Each operator worked = 2,000 hours per year

Productive work provided by each operator = 1,600 per year

Cost for each order = Total Cost associated ÷ Number of order operators

                                 = $1,000,000 ÷ 30

                                 = $33,333.3333

Rate per hour for each order entry employee:

= Cost for each order ÷ Productive work provided by each operator

= $33,333.3333 ÷ 1,600

= $20.833

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During the Christmas season, people tend to draw money out of their checking accounts to pay for presents. As a result, the mone
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Answer: decrease

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The money multiplier is the amount of money generated by banks with each dollar of reserves. The reserves is the amount of deposits which the Federal Reserve wants banks not to lend but rather hold. The money multiplier is therefore the ratio of deposits to the reserves in the banking system.

The money multiplier shows the ratio of the increase or decrease in money supply in relation to the increase or decrease in deposits. During the Christmas period, people draw lots of money out of their accounts to buy presents and other things. This will lead to a decrease in the money multiplier.

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4 years ago
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