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dangina [55]
3 years ago
12

On July 1, 2021, Apache Company, a real estate developer, sold a parcel of land to a construction company for $3,000,000. The bo

ok value of the land on Apache’s books was $1,200,000. Terms of the sale required a down payment of $150,000 and 19 annual payments of $150,000 plus interest at an appropriate interest rate due on each July 1 beginning in 2022. How much revenue will Apache recognize for the sale (ignoring interest), assuming that it recognizes revenue at the point in time at which it transfers the land to the construction company? (Leave no cells blank - be certain to enter 0" wherever required.)"
Business
1 answer:
atroni [7]3 years ago
4 0

Answer:

Revenue 2021 = $3,000,000

Revenue 2022 = $0

Explanation:

Given that,

Sold a parcel of land to a construction company = $3,000,000

book value of the land on Apache’s books = $1,200,000

In this case, revenue is identified at a point when the parcel of land is transferred to the construction company.

Therefore, full revenue from the sale of land should be recognized in the year 2021 because the transfer of land occured in 2021 and there will be no revenue reflected in the year 2022.

Revenue 2021 = $3,000,000

Revenue 2022 = $0

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mote1985 [20]

Answer:

future worth:

project A  11,615.26

project B  12,139.18‬

It should choose project B as their future value is greater

IRR of project A: 13.54%

We should remember that the IRR is the rate at which the net value is zero thus, equals the inflow with the cash outlay

It is calculate with excel or financial calculator due to the complex of the formula.

Explanation:

Project A

We calculate the future value of the cash flow per year and cost as we are asked for future value. The salvage value is already at the end of the project life so we don't adjust it.

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C \times \frac{(1+r)^{time} -1}{rate} = FV\\  

C 15,000

time 8

rate 0.12

15000 \times \frac{(1+0.12)^{8} -1}{0.12} = FV\\  

FV $184,495.3970  

Expenses future value

C \times \frac{(1+r)^{time} -1}{rate} = FV\\

C 3,000

time 10

rate 0.12

3000 \times \frac{(1+0.12)^{10} -1}{0.12} = FV\\  

FV $52,646.2052  

Cost future value

Principal \: (1+ r)^{time} = Amount  

Principal 40,000.00

time 10.00

rate 0.12000

40000 \: (1+ 0.12)^{10} = Amount  

Amount 124,233.93

Net future worth:

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future worth 11,615.26

Project B

cost:

Principal \: (1+ r)^{time} = Amount  

Principal 60,000.00

time 10.00

rate 0.12000

60000 \: (1+ 0.12)^{10} = Amount  

Amount 186,350.89

expenses 52,646.21 (same as previous)

revenues

C \times \frac{(1+r)^{time} }{rate} = FV\\  

C 24,000

time 7

rate 0.12

24000 \times \frac{(1+0.12)^{7} -1}{0.12} = FV\\  

FV $242,136.2815  

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242,136.28 + 9,000 - 52,646.21 - 186,350.89 = 12,139.18‬

Internal rate of return of project A

we write the time and cash flow for each period.

Time Cash flow

0 -40,000

1 -3,000

2 -3,000

3 12,000

4 12,000

5 12,000

6 12,000

7 12,000

8 12,000

9 12,000

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Then we write on excel the function =IRR(select the cashflow)

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Type your summary here. Use the Internet to find an article that presents a forecast of the economy's performance in the next th
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Explanation:

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A heavy snowstorm is predicted to occur in Boston on the same night as the city’s professional basketball team is playing a game
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Answer:

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3 years ago
A business becoming incorporated is an example of risk ____.
kap26 [50]

<span>A business becoming incorporated is an example of risk management.</span>

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Minchanka [31]

Answer:

sales is $2,500,000

Explanation:

The target sales for the company to achieve a net income of $450,000 in the current year equals the net income plus variable cost plus the fixed costs.

To understand this better,let us use the net income formula:

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by changing the subject of the formula,we the formula for sales:

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variable costs=sales*70%=0.7 sales

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sales-0.7 sales=$750,000

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