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Hitman42 [59]
3 years ago
11

Lester's just signed a contract that will provide the firm with annual cash inflows of $28,000, $35,000, and $42,000 over the ne

xt three years with the first payment of $28,000 occurring one year from today. What is this contract worth today at a discount rate of 7.25%?
Business
1 answer:
Free_Kalibri [48]3 years ago
5 0

Answer:

$64,474.20

Explanation:

As for the information provided,

discount rate = 7.25%

First payment will be made at the end of year 1

Discounting factor = \frac{1}{(1+0.0725)^1} = 0.9324

Thus, current value of payment = 28,000 \times 0.9324 = $26,107.20

Discounting factor for receipts =

Year 1 = \frac{1}{(1+0.0725)^1} = 0.9324 = $28,000 \times 0.9324 = 26,107.20

Year 2 = \frac{1}{(1+0.0725)^2} = 0.8694 = 35,000 \times 0.8694 = 30,429

Year 3 = \frac{1}{(1+ 0.0725)^3} = 0.8106 = 42,000 \times 0.8106 = 34,045.20

Therefore, value of contract today = - $26,107.20 + $26,107.20 + $30,429.0 + $34,045.20 = $64,474.20

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B. index

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Does anybody now how to do math just commect if you can
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Answer:

b. False

Explanation:

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3 years ago
Ikerd Company applies manufacturing overhead to jobs on the basis of machine hours used. Overhead costs are estimated to total $
Viefleur [7K]

Answer:

A. $2.40 per Machine hour

B. Underapplied = $10,000

C. cost of goods sold (debit) $10,000 , overheads (credit) $10,000

Explanation:

A) Compute the manufacturing overhead rate for the year

Overhead Rate = Total  Fixed Overheads / Budgeted Activity

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                         =   $2.40 per Machine hour.

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Over Applied Overheads = Actual Overheads < Applied Overheads

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cost of goods sold (debit) $10,000

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C. Fall, 30%, Rise

Explanation:

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6 0
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