1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Murrr4er [49]
3 years ago
9

Barron Chemical uses a thermoplastic polymer to enhance the appearance of certain RV panels. The initial cost of one process was

$130,000 with annual costs of $49,000 and revenues of $78,000 in year 1, increasing by $1000 per year. A salvage value of $23,000 was realized when the process was discontinued after 8 years. What rate of return did the company make on the process? Solve by trial and error and verify i* by spreadsheet.
Business
1 answer:
lesya [120]3 years ago
7 0

Answer:

19.17%

Explanation:

initial cost = -$130,000

cash flow year 1 = $78,000 - $49,000 = $29,000

cash flow year 2 = $29,000 + $1,000 = $30,000

cash flow year 3 = $30,000 + $1,000 = $31,000

cash flow year 4 = $31,000 + $1,000 = $32,000

cash flow year 5 = $32,000 + $1,000 = $33,000

cash flow year 6 = $33,000 + $1,000 = $34,000

cash flow year 7 = $34,000 + $1,000 = $35,000

cash flow year 8 = $35,000 + $1,000 + $23,000 = $59,000

using an excel spreadsheet and the IRR function, we can determine the project's IRR = 19.17%

The IRR is the discount rate at which the NPV of the project would equal 0. If you are going to try to solve it by trial and error you can prepare an equation and then try to solve it by approximation:

$130,000 = $29,000/(1+r) + $30,000/(1+r)² + $31,000/(1+r)³ + $32,000/(1+r)⁴ + $33,000/(1+r)⁵ + $34,000/(1+r)⁶ + $35,000/(1+r)⁷ + $59,000/(1+r)⁸

Just replace r and start increasing or decreasing as the value approaches to $130,000

You might be interested in
You've decided to buy a house that is valued at $1 million. You have $150,000 to use as a down payment on the house, and you tak
Sergeeva-Olga [200]

Answer:

a. $6,237.

Explanation:

We use the PMT formula i.e shown in the attachment below:

Data provided in the question

Present value = $850,000

Future value = $0

Rate of interest = 8% ÷ 12 months = 0.66666%

NPER = 30 years × 12 months = 360 months

The formula is shown below:

= PMT(Rate;NPER;-PV;FV;type)

The present value come in negative

So, after solving this, the  monthly mortgage payment is $6,237

3 0
3 years ago
The first economist was:​
Roman55 [17]

Adam Smith was the first

8 0
3 years ago
Mention ONE other source of wealth other than inheritance
Cloud [144]

Answer:

Power is another source other than inheritance.

Hope this helped you!

Explanation:

6 0
3 years ago
Read 2 more answers
Fiscal policy may end up being destabilizing to an economy because:___________
Drupady [299]

Answer:

D. The economy is almost always at full employmeny.

Explanation:

ʜᴏᴘᴇ ᴛʜɪꜱ ʜᴇʟᴘꜱ! ♡

8 0
2 years ago
Molly's auto detailers maintains its records on the cash basis. During 2018, molly's collected $72,800 from customers and paid $
igor_vitrenko [27]

Accrued Net Income will be calculated as below:

Sales                                                    $72800

Less Expenses                                     $20400

Cash Income                                         $52400

Less: Depreciation                                 $4900

Add: Accounts Receivable Inc              $4500

Less: Reduction in Prepaid Exp             $1900

Add: Reduction in Acc Liab                    $1700

Accrued Income                                   $51800

Depreciation will be reduced as its an expense and all expenses will be reduced.

Increase in Accounts Recievables indicate there have been sales which have not been paid for yet, thus sales will increase and this needs to be added

Reduction in Prepaid Expenses refer to expenses being paid off earlier but now need to be recognised, thus these need to be added to expenses

Reduction in accrued liabilitites indicate that expenses of previous period have been paid off now thus those need to be reduced from cash expenses.

6 0
3 years ago
Other questions:
  • Gross profit rate is 30% of sales. Expected January sales are $78,000 and desired January 31st inventory is $7,500. Assuming the
    12·2 answers
  • According to Jamie Dimon, "Most leaders I know are working to build something of which they can be proud. They usually work hard
    7·1 answer
  • Harold Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and
    8·1 answer
  • Which is the most likely scenario in which someone would take out a short-term loan with a bank?
    6·1 answer
  • The article said that experienced workers’ wages often rose? Why would this be so, and what
    15·1 answer
  • Government G levies an income tax with the following rate structure: Percentage Rate Bracket 6 % Income from –0– to $30,000 10 I
    10·1 answer
  • You have just been offered your dream job after graduating from Jacksonville University. In response to your negotiations concer
    14·1 answer
  • When the marginal benefit of an output exceeds the marginal cost?
    7·1 answer
  • Quizlet:Suppose the demand for a Czech novel translated into English is perfectly inelastic. Assume the initial price of the tra
    12·1 answer
  • Which of Graeter’s stakeholders are most affected by the family’s decision to take a long-term view of the business rather than
    6·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!