Answer:
$3,716.37
Explanation:
Initial investment $70,000 (cost of the equipment)
Depreciation expense per year = (cost- salvage value) / useful life = ($70,000 - $0) / 5 years = $14,000
net cash flows per year (the same for every year):
[(revenues - operating expenses - depreciation expense) x (1 - tax rate)] + depreciation expense = [($30,000 - $11,000 - $14,000) x (1 - 30%)] + $14,000 = $3,500 + $14,000 = $17,500
year NCF
0 -$70,000
1 $17,500
2 $17,500
3 $17,500
4 $17,500
5 $17,500
6% discount rate
using a financial calculator, the NPV = -$70,000 + $73,716.37 = $3,716.37
$73,716.37 is the present value of the 5 future cash flows
Answer:
The answer is given below;
Explanation:
Preference stocks 950*50 Dr.$47,500
Paid in capital in excess of par-preference shares Dr.$ 13,300
(64-50)*950
Common Stocks 1,900*10 Cr.$19,000
Paid in capital in excess of par-common stocks Cr.$41,800
(64*950)-(1900*10)
