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4 years ago

Gore Global is considering the two mutually exclusive projects below. The cash flows from the projects are summarized below.

Business

1 answer:

d1i1m1o1n [39]4 years ago

7 0

Answer:

Explanation:

Internal rate of return is the discount rate that equates the after tax cash flows from an investment to the amount invested

IRR can be calculated with a financial calculator

Flying Car

Cash flow in year 0 = -$200,000

Cash flow in year 1 = 50,000

Cash flow in year 2 = 50,000

Cash flow in year 3 =80,000

Cash flow in year 4 =100,000

IRR = 13%

To find the IRR using a financial calculator:

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.

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Assume that you manage a risky portfolio with an expected rate of return of 12% and a standard deviation of 39%. The T-bill rate

Shtirlitz [24]

Answer:

y = 50 %

Explanation:

As per the data given in the question, computation are as follows:

Expected return = y × expected rate of return for portfolio + (1 - y) × rate of T-bills

By putting the value from the given data in the above formula, we get

0.09 = y×0.12 + (1 - y)×0.06

0.09 = 0.12y + 0.06 - 0.06y

0.03 = 0.06 y

y = 0.50

= 50%

4 0

3 years ago

At the beginning of 2019, Robotics Inc. acquired a manufacturing facility for $13.5 million. $10.5 million of the purchase price

sdas [7]

Answer:

$511,667

Explanation:

The computation of the depreciation expense for 2019 and 2020 is shown below:

= (Purchase price - residual value) ÷ (useful life)

= ($10,500,000 - $2,500,000) ÷ (25 years)

= ($8,000,000) ÷ (25 years)

= $320,000

The depreciation in this method is the same for the rest of the useful life

Now the book value for 2021 would be

= Purchase price - depreciation for 2 years

= $10,500,000 - $320,000 × 2

= $9,860,000

Now the depreciation for 2021 would be

= ($9,860,000 - $650,000) ÷ 18 years

= $511,667

3 0

3 years ago

Thom owes $5,000 on his credit card. The credit card carries an APR of 17.3 percent compounded monthly. If Thom makes monthly pa

blagie [28]

Answer:

39 months

Explanation:

loan balance $5,000

APR = 17.3% compounded monthly / 12 = 1.44167% monthly interest rate

monthly payment = $170

if we use the present value of annuity formula:

PV = payment x ({1 - [1/(1 + r)ⁿ]} / r)

5,000 = 170 x ({1 - [1/(1 + 0.0144167)ⁿ]} / 0.0144167)

29.4118 = {1 - [1/(1.0144167)ⁿ]} / 0.0144167

0.42402 = 1 - [1/(1.0144167)ⁿ

1/(1.0144167)ⁿ = 0.57598

1.0144167ⁿ = 1 / 0.57598 = 1.73617

n log1.0144167 = log1.73617

n 0.00621639 = 0.2395926

n = 0.2395926 / 0.00621639 = 38.54 ≈ since the payments must be made in full months, we have to round up to 39 months

to check our answer:

PV = payment x ({1 - [1/(1 + r)ⁿ]} / r)

PV = 170 x ({1 - [1/(1 + 0.0144167)³⁹]} / 0.0144167)

PV = $5,044.36

6 0

3 years ago

1. On December 31st, 2012, Bingo Corp. borrowed $50,000 from a bank. Half of the loan was to be repaid in 2013, and the other ha

olga2289 [7]

Answer:

undervalued assets an liabilities by 50,000

Explanation:

The financial statement for the fiscal year ended on December 31th, 2012

will have the following mistake:

Liabilities are undervalued by 50,000

Cash wll be undervalued by 50,000

As the note payable is not recorded neither the cash receipts from the loan.

Because this transaction is missing, we are not doing a correct representation of reality. This account will be undervalued.

4 0

4 years ago

In Bramble Company, materials are entered at the beginning of each process. Work in process inventories, with the percentage of

bezimeni [28]

Answer:

Detailed step-wise solution is given below:

5 0

3 years ago