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aalyn [17]
3 years ago
10

A project with an initial investment of $449,300 will generate equal annual cash flows over its 10-year life. The project has a

required return of 8.9 percent.
1. What is the minimum annual cash flow required to accept the project?
O $74,638.31O $64,435.34O $79,659.56O $66,657.24O $69,702.11
Business
1 answer:
bija089 [108]3 years ago
8 0

Answer:

Cash flow per year to achieve the required return on investment: $69,702.11

Explanation:

We have to solve for which cashinflow makes an annuity of 10-year discount at 8.9% equal to our 449,300 dollars invested:

PV \div \frac{1-(1+r)^{-time} }{rate} = C\\

PV 449,300

time   10 years

rate     0.089 per year

449300 \div \frac{1-(1+0.089)^{-10} }{0.089} = C\\

C  $ 69,702.112

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The financial records of LeRoi Jones Inc. were destroyed by fire at the end of 2014. Fortunately, the controller had kept certai
Stolb23 [73]

Answer:

LeRoi Jones Inc

Income statement for the year 2014

Sales (100/8 × $100,000)                                                 $1,250,000

Less Cost of Sales

Beginning merchandise                                  $92,000

Add Purchases                                               $481,600

Less Ending merchandise ($92,000 - 20%) ($73,600)  ($500,000)

Gross Profit                                                                         $750,000

Less Expenses :

Sales Discounts                                                  $17,000

Interest expense                                               $20,000

Administrative expenses ($500,000 × 20%) $100,000 ($137,000)

Profit before tax                                                                  $613,000

Income tax expense at 30%                                             ($183,900)

Net Income / Loss                                                              $429,100

Earnings Per Share                                                                 $21.46

Explanation:

Notes on income statement preparation

Use the statistical data to fill in the line items of the Income Statement as shown above.

For the Calculation of Sales, first calculate the administrative expenses. Apply the 8% on the administration cost to find sales at 100%.

Earnings Per Share = Earnings attributable to holders of Common Stock ÷ Weighted Average Number of Common Stock

                                = $429,100 ÷ $20,000

                                = $21.46

8 0
3 years ago
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Answer:

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Answer:

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7 0
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