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Helga [31]
3 years ago
6

LO 3 Chad's Chocolates is considering the purchase of a new candy press. The machine under consideration costs $17,550 and would

generate $2,650 in annual savings of direct labor costs over its 20-year life. At the end of 20 years, the press could be sold for $500. Chad's required rate of return is 16%. What is the machine's net present value?
A) $1,813
B) $(1,813)
C) $(1,839)
D) $(1,339)
Business
1 answer:
devlian [24]3 years ago
4 0

Answer:

B) $(1,813)

Explanation:

Initial investment = 17,550

Annual cashflows = 2,650

Terminal Cashflow = 500

You can solve for NPV using financial calculator with the following inputs;

CF0= -17,550

C01 = 2,650

F01 (Frequency) = 19

C02 = 2,650 + 500 = 3,150

I=16%

Net present value; NPV = -1,812.879 or -1,813 rounded off to the nearest whole number.

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uring December, Rainey Equipment made a $676,000 credit sale. The state sales tax rate is 6% and the local sales tax rate is 1.5
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Answer:

Please refer to the below for the appropriate journal entry

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3 years ago
You work in the finance division of a company listed in the Stock Exchange. You have just learned that your supervisor has been
stepladder [879]

Answer:

  • Yes it is.
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Trading on the stock exchange is supposed to be as fair as possible so that every investor has a fair chance of making returns. If a person - like this supervisor - is using information that is material but not publicly disclosed yet to trade on markets, the fairness of the market is compromised because the person will have an edge over other investors which will enable them make unfair profits.

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Option C

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It observes positive and negative circumstances both inside and outside the firm, that influence its success. The analysis benefits the company forecast or prognosticates varying trends that help the decision-making process of any business. Precise forecasting reduces risk and provides a measurable improvement in the efficiency of the decisions.

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