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Scorpion4ik [409]
3 years ago
13

Consider the following two mutually exclusive projects:Year Cash Flow (X) Cash Flow (Y)0 ?$16,400 ?$16,400 1 6,660 7,190 2 7,240

7,780 3 4,760 3,530 Requirement 1:(a) What is the IRR of Project X? (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (e.g., 32.16).) IRR % (b) What is the IRR of Project Y? (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (e.g., 32.16).) IRR % Requirement 2:What is the crossover rate for these two projects? (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (e.g., 32.16).)
Business
1 answer:
pickupchik [31]3 years ago
6 0

Answer:

1a. 7.12%

b. 6.99%

2. 9.69%

Explanation:

The IRR is the discount rate that equates the after tax cash flows from an investment to the amount invested.

The IRR can be calculated using a financial calculator.

The IRR for project X :

Cash flow in year 0 = $-16,400

Cash flow in year 1 = $6,660

Cash flow in year 2 = $7240

Cash flow in year 3= $4760

IRR = 7.12%

The IRR for project Y :

Cash flow in year 0 = $-16,400

Cash flow in year 1 = $7,190

Cash flow in year 2 = $7,780

Cash flow in year 3 = $3530

IRR = 6.99%

The cross over rate is the rate that equates the cash flow from both projects.

The first step is to subtract the cash flow from project Y from the cash flow of project X

Cash flow for year 0 = $16400 - $16400 = 0

Cash flow for year 1 = $6,660 - $7,190 = $-530

Cash flow for year 2 =$7,240 -$7,780 =$-540

Cash flow for year 3 = $4,760 - $3,530 = $1230

The next step is to find the discount rate using a financial calculator.

Cash flow for year zero = 0

Cash flow for year one = $-530

Cash flow for year 2 =$-540

Cash flow for year 3 =$1230

Cross over rate = 9.69%

I hope my answer helps you

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When originally purchased, a truck costing BD 23.000 had an estimated useful life of 8 years and an estimated salvage value of B
GREYUIT [131]

Answer:

d. BD 2,500

Explanation:

Accumulated Depreciation through the end of year 4 = [ Asset's cost - Salvage Value) / Estimated Useful Life] * Years Elapsed

= [(23,000 - 3,000)/8] * 4

= BD 10,000

Depreciation in Year 3 = [Asset's cost - Salvage Value - Accumulated Depreciation] / Remaining Estimated Useful Life

Depreciation in Year 3 = [23,000 - 3,000 - 10,000] / 4

Depreciation in Year 3 = 10,000 / 4

Depreciation in Year 3 = BD 2,500

6 0
3 years ago
You and your friends want to buy a condo at the beach to time share. Each of you has single peaked preferences with a most prefe
Gemiola [76]

Answer:

Individual                   Cost                                Shares to be enjoyed

Mabel                      $10,000                            10000 / 150000 =  6.67%

Gertrude                 $20000                            20000 / 150000 = 13.3%

Myron                      $30000                            30000 / 150000 = 20%

Wilber                      $40000                            40000 / 150000 = 26.6%

You                          $50000                            50000 / 150000 = 33.3%

Explanation:

peaked preferences

Most preferred value to spend :

Mabel = $10,000

Gertrude = $20,000

Myron = $30,000

Wilber = $40,000

you = $50,000

cost of Condo = $150,000

<u>Implementing a Uniform rule mechanism to allocate costs and shares </u>

The uniform rule ; ∑ j∈I Uj (p) = Ω.

where Ω = fixed amount of resource

hence the summation of all allotment should = Ω ( $150,000 )

Number of friends = 5

cost of condo  = $150,000

If divide equally each person will have to pay ; $150,000 / 5 = $30,000

Total money to be spent by friends = 10,000 + 20,000 + 30,000 + 40,000 + 50,000  = $150,000

Individual                   Cost                                shares to be enjoyed

Mabel                      $10,000                            10000 / 150000 =  6.67∑%

Gertrude                 $20000                            20000 / 150000 = 13.3%

Myron                      $30000                            30000 / 150000 = 20%

Wilber                      $40000                            40000 / 150000 = 26.6%

You                          $50000                            50000 / 150000 = 33.3%

∑shares ≈ 100% ( 150,000 )

6 0
3 years ago
Summarize the effect of credit card interest on the real cost of items.
JulijaS [17]

Answer with its Explanation:

The result is that some of the credit cards pays interests on the cash surplus and charges interests on the cash deficit. If the interest rate is higher then the interest on the real cost of items that are finance with the negative balance will be charged interest on the higher interest rate because the interest rate is higher. If the interest rate is lower then the effect of credit card interest rate would be higher on the real cost of items.

3 0
3 years ago
At year-end (December 31), Chan Company estimates its bad debts as 0.30% of its annual credit sales of $673,000. Chan records it
Rudiy27

Answer:

bad debt expense   2,019 debit

       allowance for uncollectible amount  2,019 credit

--to record estimated bad debt expense--

allowance for uncollectible amount 337 debit

                    accounts receivables               337 credit

--to record write-off of P.Park  Account--

accounts receivables               337 debit

       allowance for uncollectible amount 337 credit

--to reverse write-off of P-Park account--

cash                                         337 debit

       accounts receivables               337 credit

--to record collection of P-Park account--

Explanation:

<em>bad debt expense</em> 673,000 x 0.30% = <em>2,019‬</em>

<em />

The write off decreases both, the allowance and accounts receivables

As Park pay up his old debt, the entry is reversed. Then we record the collection as normal.

6 0
3 years ago
Amy​ Parker, a​ 22-year-old and newly hired marine​ biologist, is quick to admit that she does not plan to keep close tabs on ho
lakkis [162]

Answer:

Final Value= $370,481.13

Explanation:

Giving the following information:

Amy's contribution, plus that of her​ employer, amounts to ​$2,150 per year starting at age 23. Amy expects this amount to increase by 3​% each year until she retires at the age of 57 ​(there will be 35 EOY​ payments). Interest rate= 5%.

<u>First, we will add the growth of the deposits to the interest rate:</u>

Interest rate= 0.03 + 0.05= 0.08

Now, to calculate the final value, we need to use the following formula:

FV= {A*[(1+i)^n-1]}/i

A= annual deposit= 2,150

i= 0.08

n= 35

FV= {2,150*[(1.08^35)-1]}/ 0.08= $370,481.13

6 0
3 years ago
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