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lesya [120]
3 years ago
13

Southern California Publishing Company is trying to decide whether to revise its popular textbook, Financial Psychoanalysis Made

Simple. The company has estimated that the revision will cost $80,000. Cash flows from increased sales will be $20,200 the first year. These cash flows will increase by 4 percent per year. The book will go out of print five years from now. Assume that the initial cost is paid now and revenues are received at the end of each year. If the company requires a return of 10 percent for such an investment, calculate the present value of the cash inflows of the project. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Business
1 answer:
ivann1987 [24]3 years ago
7 0

Answer:

NPV= 2333.28

Explanation:

Giving the following information:

So we have an initial investment in year 0 of $80,000 and a cash-flow of $20,200 (increase by 4% each year) for five years. Interest rate is 10%

Io= -80000

I1= 20200

I2= 21008

I3= 21848.32

I4= 22722.26

I5= 23631.15

To calculate the net present value we need to use the following formula:

                      n

<h3>NPV= -Io + ∑[Ct/(1+i)^n]</h3>

                      t-1

NPV= 2333.28

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Answer:

9.87%

Explanation:

Calculation to determine What APR do you have to earn in order to achieve your goal

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r=.82%

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r = 9.87%

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Suppose you were assigned the task of choosing a price that maximized economic surplus. What price would you​ choose? ​ Why? A.
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Answer:

C. Choose the price where the quantity demanded equals the quantity supplied because that is the equilibrium condition.

Explanation:

The equilibrium price is the most ideal because at this price the consume is willing to buy, if price goes above this the consumer may look for an alternative and this will further increase surplus.

Also when there is surplus the suppliers will find a way to sell competitively at the equilibrium price.

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How supply and demand work together to reach the equilibrium price in the marketplace? Please give at least a paragraph. Thank y
grandymaker [24]

Answer

Before I answer this question, you must note that the equilibrium price is created by both the amount supplied of a certain product as well as how much "customers" there are (or the amount that is bought in all).  This however, is usually not taking account any potential competitors.

For example, let say that the price in creating the product (or buying) is $15. This means that right now, the company loses $15 for one of the products. To make a profit, the selling price must be >$15. However, (unless they are a monopoly, such as, for example, electrical companies) there are competitors that they must fight with to get customers. Of course, there are other things that can affect the price, depending on the demographic and area.

So how does supply and demand affect the equilibrium price? The limits of the supply & the amount of demand would help determine the price by the amount of people buying and the supply of the product.

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3 years ago
Read 2 more answers
C.S. Sandhill Company had the following transactions involving notes payable. July 1, 2022 Borrows $62,000 from First National B
netineya [11]

Answer:

C.S. Sandhill Company

Journal Entries:

July 1, 2022

Debit Cash $62,000  

Credit 9-month, 8% Notes Payable (First National Bank) $62,000

To record signing of a 9-month 8% notes payable for cash borrowed.

Nov. 1, 2022

Debit Cash $65,000

Credit 3-month, 6% Notes Payable (Lyon County State Bank) $65,000

To record the signing of a 3-month 6% notes payable for cash borrowed.

Dec. 31, 2022

Debit Interest Expense $3,130

Credit Interest Payable $3,130

To record interest expense for the two notes.  See calculations below.

Feb. 1, 2023

Debit 3-month, 6% Notes Payable (Lyon County State Bank) $65,000

Debit Interest Payable $650

Debit Interest Expense $325

Credit Cash $65,975

To record the repayment of the notes payable with interest due.

Apr. 1, 2023

Debit 9-month, 8% Notes Payable (First National Bank) $62,000

Debit Interest Payable $2,480

Debit Interest Expense $1,240

Credit Cash $65,720

To record the repayment of the notes payable with interest due.

Explanation:

a) Data and Analysis:

July 1, 2022 Cash $62,000  9-month, 8% Notes Payable (First National Bank) $62,000

Nov. 1, 2022 Cash $65,000 3-month, 6% Notes Payable (Lyon County State Bank) $65,000

Dec. 31, 2022 Interest Expense $3,130 Interest Payable $3,130 ($62,000 * 8% * 6/12) + ($65,000 * 6% * 2/12)

Feb. 1, 2023 3-month, 6% Notes Payable (Lyon County State Bank) $65,000 Interest Payable $650 Interest Expense $325 Cash $65,975 (Interest expense = $325 ($65,000 * 6% * 1/12)

Apr. 1, 2023 9-month, 8% Notes Payable (First National Bank) $62,000 Interest Payable $2,480 Interest Expense $1,240 Cash $65,720 (Interest expense = $1,240 ($62,000 * 8% * 3/12)

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