Answer:
The present value of security is $2300
Explanation:
The value or price of the perpetuity today is calculated by dividing the constant cash flow it provides per period by the interest rate or the rate of return (r). Thus the price of this perpetuity according to the formula will be,
Value of perpetuity = Cash flow / r
Value of perpetuity = 115 / 0.05
Value of perpetuity = $2300
Answer:
NPV= 1,036.16
Explanation:
Giving the following information:
Initial investment= $9,000
Cash flows= $2,700 at the end of each of the next four years.
Interest rate= 3%
To calculate the net present value (NPV), we need to use the following formula:
NPV= -Io + ∑[Cf/(1+i)^n]
Cf1= 2,700/1.03= 2,621.36
Cf2= 2,700/1.03^2= 2,545
Cf3= 2,700/1.03^3= 2,470.88
Cf4= 2,700/1.03^4= 2,398.92
Total= 10,036.16
NPV= -9,000 + 10,036.16
NPV= 1,036.16
Answer:
Total assets is increased by $18,100
Explanation:
The computation is shown below:
= Cash received from the issue of stock + revenue earned on account - cash paid for operating expenses
= $15,000 + $8,500 - $5,400
= $18,400
This positive amount shows that there is an increase in the total assets for $18,100
The cash collected from the account receivable is not relevant. Hence ignored it
The variable cost is calculated as -
Sales - Variable cost = Contribution Margin
Given, Contribution Margin = 25 %
Variable cost = 1 - Contribution Margin = 1 - 25 % = 75 %
25 % of Sales = Contribution Margin = $ 400,000
Sales = $ 400,000 ÷ 25 %
Sales = $ 1,600,000
Variable costs = 75% of Sales = 75 % × $ 1,600,000 = $ 1,200,000
Answer:
5. $232,000.
Explanation:
The computation of the total conversion costs transferred out of the Canning Department equals to
= Number of units completed and transferred out × Cost per equivalent unit
= 80,000 units × $2.90
= $232,000
In order to find out the total conversion cost, we simply multiplied the number of units completed and transferred out with the cost per equivalent unit
