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
romanna [79]
3 years ago
5

Which capital budgeting method is most useful for evaluating a project that has an initial afterminustax cost of​ $5,000,000 and

is expected to provide afterminustax operating cash flows of​ $1,800,000 in year​ 1, ($2,900,000) in year​ 2, $2,700,000 in year​ 3, and​ $2,300,000 in year​ 4?
Business
1 answer:
OverLord2011 [107]3 years ago
7 0

Answer:

(NPV) Net present value method is the most effective capital budgeting method

Explanation:

we know here  

initial after minus tax cost = ​ $5,000,000

after minus tax cash flows in 1st year =​ $1,800,000

and in 2nd year = $2,900,000

and in 3rd year  = $2,700,000

and 4th year is = $2,300,000

so here cash outflows even after the initial outlay in year 0

so we not use here IRR

so that best and most most effective capital budgeting method  is NPV net present value

we use it NPV

You might be interested in
Savvy sightseeing had beginning equity of $90,000; revenues of $144,000, expenses of $83,000, and dividends to stockholders of $
Law Incorporation [45]

$140,200

90,000      Begining equity

+144,000   Plus revenues

=234,000  New total

-83,000     Minus expenses

-10,800      Minus Dividends to stockholders

= 140,200  Equals Ending equity

7 0
3 years ago
the standards for the new galaxy phone specify 4.1 direct labor-hours per unit at $12.10 per direct labor-hour. last month 1,600
hammer [34]

a.The labor rate variance for the month $2,640 (Favorable).

b.The labor efficiency variance for the month $484 (Unfavorable).

<h3>Solution:</h3>

The following is a calculation of labor rate variation and labor efficiency variance:

Variation in labor rates = Actual cost - (Actual hours x Standard rate)

= $77,220 - (6,600 × $12.10)

= $77,220 - 79,860

= $2,640 Favorable

Variation in labor efficiency = Standard rate (Actual hours - Standard hours)

= $12.10 × (6,600 - 1,600 × 4.1)

= $12.10 × 40

= $484 Unfavorable

<h3 /><h3>Direct Labor:</h3>

Direct labor (DL) expenses in accounting are the costs connected with paying people to produce a product or perform a service. Workers must be explicitly involved in the production or delivery of the product or service. One of the costs associated with manufacturing a product or delivering a service is direct labor expenditures. Furthermore, direct labor costs differ from indirect labor expenses.

The following are some examples of direct labor costs:

1.Wages paid to assembly line workers in a manufacturing context.

2.Wages given to restaurant kitchen staff in a service setting.

Learn more about labor-hours:

brainly.com/question/15701334

#SPJ4

4 0
1 year ago
Prepare the journal entry to record Zende Company’s issuance of 66,000 shares of $5 par value common stock assuming the shares s
eduard

Answer:

The journal entry to record Zende Company’s issuance of 66,000 shares of $5 par value common stock assuming the shares sell for $5 cash per share would be                    

                    Debit       Credit

Cash           $330,000

Common stock             $330,000

The journal entry to record Zende Company’s issuance of 66,000 shares of $5 par value common stock assuming the shares sell for $6 cash per share would be        

                                                             Debit               Credit

Cash                                                    $396,000

Common stock                                                        $330,000

Paid in capital in excess of par value                      $66,000

Explanation:

The journal entry to record Zende Company’s issuance of 66,000 shares of $5 par value common stock assuming the shares sell for $5 cash per share would be as follows:

                    Debit       Credit

Cash           $330,000

Common stock             $330,000

Par values of the share of common stock=$66,000*5

Par values of the share of common stock=$330,000

The journal entry would be prepared by debiting cash and crediting common stock by $330,000

The journal entry to record Zende Company’s issuance of 66,000 shares of $5 par value common stock assuming the shares sell for $6 cash per share would be as follows:

                                                             Debit               Credit

Cash                                                    $396,000

Common stock                                                        $330,000

Paid in capital in excess of par value                      $66,000

cash=66,000*$6

cash=$396,000

Common stock=$66,000*5=$330,000

Paid in capital in excess of par value=$396,000-$330,000=$66,000

4 0
3 years ago
1. Given the nominal interest rate of 17​% and the expected inflation of 13​%, then the value of the real interest rate is ___ ?
Veronika [31]

Answer:

According to fisher equation

(1+nominal Interest rate)=(1+real interest rate)(1+inflation)

1) So 1.17=(1+R)(1.13)

1+R=1.17/1.13

R=1.035-1

R=0.0353

Real interest rate = 3.53 percent

2) (1+NIR)= 1.03*1.04

  1+ NIR= 1.072

NIR= 0.072

Nominal interest rate = 7.2 percent

A lender prefers a higher real interest rate as he will earn more money on the amount he has lend if the real interest rate is higher.

A borrower will prefer a lower real interest rate as he will have to pay lower interest payments on an amount if the real interest rate is lower.

Explanation:

6 0
3 years ago
Which graph shows the relationship between the aggregate price level and the aggregate quantity supplied over time?
PilotLPTM [1.2K]
The answer is A: Long-run aggregate supply curve.
4 0
3 years ago
Other questions:
  • An HR manager asked every candidate during an interview to describe a situation in the past in which they had to display their l
    10·1 answer
  • Karim Corp. requires a minimum $8,000 cash balance. Loans taken to meet this requirement cost 1% interest per month (paid monthl
    6·1 answer
  • Licensee Gary advises Buyer Tim that a property Tim is interested in is zoned for commercial use. In fact, Gary does not know wh
    10·1 answer
  • Novak Corp.had the following transactions during 2022: 1. Issued $205000 of par value common stock for cash. 2. Recorded and pai
    7·1 answer
  • Suppose these students came from a university with an enrollment of 34,642 students. We are told that about 28% of all students
    8·1 answer
  • An FHA-insured loan in the amount of $57,500 at a 6 ½% interest rate for 30 years was closed on March 17. The first monthly paym
    12·1 answer
  • Peach Company uses a weighted-average process-costing system. Company records disclosed that the firm completed 40,000 units dur
    14·1 answer
  • What is the best strategy to avoid paying interest on your credit cards?
    7·2 answers
  • Scott Company had sales of $12,350,000 and related cost of goods sold of $7,500,000. Scott provides customers a refund for any r
    15·1 answer
  • risk unique to firms with direct investment in a foreign country is the potential takeover of the firm's assets by the governmen
    11·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!