The cost of the merchandise inventory that the business ▼ has sold to customers.

Beyer Company is considering the purchase of an asset for $215,000. It is expected to produce the following net cash flows. The

wlad13 [49]

Answer:

a) Net Present Value = $ 304,495.12

b) Beyer should accept the investment.

Explanation:

The net present value NPV) of a project is the present value of cash inflow less the present value of cash outflow of the project.

NPV = PV of cash inflow - PV of cash outflow

Year PV

1 77,000 × 1.12^(-1) = 68,750.00

2 54,000 × 1.12^(-2) = 43,048.47

3 82,000 × 1.12^(-3) = 58,365.98

4 172,000 × 1.12^(-4) = 109,309.11

5 423,000 × 1.12^(-5)= 240,021.56

Total Present Value 519,495.12

Initial cost (215,000)

Net Present Value 304,495.12

Net Present Value = $ 304,495.12

b) Decision :

Beyer should accept the investment. This will increase the wealth of the shareholders by $ 304,495.12

8 0

3 years ago

which statement was true in the past but is not generally true today? A. the training and education costs for some jobs will pro

-BARSIC- [3]

1 ).which of the following is the term for day-to-day and long-term tasks you are assinged to complete?

Job responsibilities.

2 ). why is career planing important?

It can help you narrow down your options and get the training you need.

3 ). which statement was true in the past, but not generally true today?

Young people tend to go into the job that their parents and grandparents did.

4 ). which of the following statements is accurate?

People with the same job title may perform different duties.

5 ). which of these principles would be most helpful to a young person deciding on a career?

A realistic assessment of your abilities and interests will help you find an appropriate career.

7 0

3 years ago

_____ represent the interests of union members in their relations with their immediate supervisor and other members of managemen

Pavel [41]

Union stewards is what they call the one who represent the interest of the union members in their immediate supervisor and other members of the management. Union stewards are full-time employees at the workplace and generally are not paid by the union.

6 0

2 years ago

Glaston Company manufactures a single product using a JIT inventory system. The production budget indicates that the number of u

dezoksy [38]

Answer:

$ 317,000

Explanation:

Octuber Production: 200,000

Variable Overhead: $ 0.80 per unit

Fixed Overhead: $ 157,000

Factory Overhead Budget for October:

Octuber Production x Variable Overhead = 200,000 x 0.80 = 160,000

Variable Overhead: $ 160,000

+

Fixed Overhead: $ 157,000

Total Overhead: $ 317,000 ( $ 160,000 + $ 157,000 )

4 0

3 years ago

The Pinkerton Publishing Company is considering two mutually exclusive expansion plans. Plan A calls for the expenditure of $56

myrzilka [38]

Answer:

NPV of Plan A: $15,669,953.

NPV of Plan B: $18.260,647.

For the Plan A, the IRR is r=0.15.

For the Plan B, the IRR is r=0.32.

Explanation:

We have two expansion plans:

Plan A:

- Expenditure: -$56 million

- Cash flow: $9 million/year

- Duration: 20 years

Plan B:

- Expenditure: -$12 million

- Cash flow: $3.8 million/year

- Duration: 20 years

The NPV of plan A can be expressed as:

$NPV_A=-I_0+\sum_{k=1}^{20} (CF_k)(1+i)^{-k}\\\\NPV_A=-I_0+(CF)[\frac{1-(1+i)^{-20}}{i}] \\\\NPV_A=-56+9*[\frac{1-(1.11)^{-20}}{0.11}]=-56+9*\frac{0.876}{0.11}=-56+9*7.963328117 \\\\NPV_A=-56+71.66995306= 15.669953$

NPV of Plan A: $15,669,953.

The NPV of plan B can be expressed as:

$NPV_B=-I_0+\sum_{k=1}^{20} (CF_k)(1+i)^{-k}\\\\NPV_B=-I_0+(CF)[\frac{1-(1+i)^{-20}}{i}] \\\\NPV_B=-12+3.8*[\frac{1-(1.11)^{-20}}{0.11}]=-12+3.8*\frac{0.876}{0.11}=-12+3.8*7.963328117\\\\NPV_B=-12+30.26064685=18.260647$

NPV of Plan B: $18.260,647.

To calculate the IRR, we have to clear the discount rate for NPV=0. We can not solve this analitically, but we can do it by iteration (guessing) or by graphing different NPV, with the discount rate as the independent variable.

For the Plan A, the IRR is r=0.15.

For the Plan B, the IRR is r=0.32.

5 0

3 years ago