Answer:
Explanation:
a.Present value of inflows=cash inflow*Present value of discounting factor(rate%,time period)
=150,000/1.12+210,000/1.12^2+360,000/1.12^3
=557580.18
NPV=Present value of inflows-Present value of outflows
=557580.18-460,000
=$97580.18(Approx)=Value of factory
b.Hence since net present value is positive;factory is a good investment
(Yes)
Answer: a.)maximizes the minimum return.
Explanation:
Answer:
- Melba's adjusted basis for the land at the Acquisition date is $625000
- Melba's adjusted basis for the land one year later is $645000
Explanation:
The adjusted basis for a property/land is the net cost of the property after adjusting for factors that might attract tax as related to the land
The adjusted basis for the land at the acquisition date is the net cost of the land at the acquisition date which will be ( $225000 + $400000 ) because that was the net cost of the Land at the date of acquisition before an agreement was later reached by Melba requiring him to pay $400000 plus an interest of 5%
Hence the adjusted basis for the land one year later will be
= ( $225000 + $400000 ) + 5% of $400000
= ( $625000 ) + $20000
= $645000
Answer:
C. NPV is the discounted present value of a project's expected future accounting net income at the required return, subtracting the initial investment.
Explanation:
NPV means Net Present Value, this is calculated by computing the present value of cash returns and not the accounting income, as accounting income takes in account non cash items also, although while computing returns the non cash transactions are not considered.
Therefore the chosen statement which states about accounting income less initial investment is false as even in case the project requires additional mid term investment then that is also considered.
Thus, false statement is
Statement C
Answer:
the total factory overhead cost is $11,900
Explanation:
The computation of the total factory overhead cost is shown below:
= Indirect materials cost + Indirect labor cost + Maintenance of factory equipment
= $2,700 + $5,700 + $3,500
= $11,900
Hence the total factory overhead cost is $11,900
The same should be considered and relevant