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3 years ago

Instructions: Please answer questions A-D below. I can't award credit if A-D isn't answered completely.

Business

1 answer:

enyata [817]3 years ago

3 0

Answer:

A, 3.8 years

b NPV = $2,189,324.56

c. IRR = 20.33%

d. Primas Corp can carry out the conversion because it would be profitable all other things being equal

Explanation:

Payback calculates the amount of time it takes to recover the amount invested in a project from it cumulative cash flows

Payback period = amount invested / cash flow = $7,125,000 / $1,875,000 = 3.8 years

Net present value is the present value of after tax cash flows from an investment less the amount invested.

Internal rate of return is the discount rate that equates the after tax cash flows from an investment to the amount invested

NPV and IRR can be calculated using a financial calculator

Cash flow in year 0 = $-7,125,000

Cash flow each year from year 1 to 8 = $1,875,000

I = 12%

NPV = $2,189,324.56

IRR = 20.33%

D.the NPV is positive and the IRR exceeds the discount rate so the project is profitable and the company should undertake the project

To find the NPV using a financial calculator:

1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.

2. after inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.

3. Press compute

To find the IRR using a financial calculator:

1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.

2. After inputting all the cash flows, press the IRR button and then press the compute button.

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3 years ago

You own $5,000 shares of stock that currently sells for $30 a share. There are 2 million shares outstanding. The firm has announ

maxonik [38]

Answer:

percentage of ownership:

before 0.25%

after 0.30%

Value of the investment:

5,000 stock x $30 = 150,000

Explanation:

To get the currnet percentage of ownership:

portfolio stock / shares outstanding

5,000 stock / 2,000,000 = 0.0025 = 0.25%

Now, for the escenario after the repurchase:

First, how many shares were repurchased:

10,000,000 / 30 = 333,333 stock repurchased

Then, how many are outstanding:

2,000,000 - 333,33 = 1,666,667

Last, the new percentage of ownership

5,000 stock / 1,666,667 = 0.02999 = 0.30%

value of the investment:

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4 years ago

Suire Corporation is considering dropping product D14E. Data from the company's accounting system appear below: Sales $ 670,000

Marina86 [1]

Answer:

a. According to the company's accounting system, what is the net operating income earned by product D14E? (Net losses should be indicated by a minus sign.)

net loss -$65,000

b. What would be the financial advantage (disadvantage) of dropping product D14E? Should the product be dropped?

financial disadvantage of discontinuing the produce is -$68,000, so the company should not discontinue the product since its losses would increase

Explanation:

total sales $670,000

- variable expenses $295,000

- fixed manufacturing expenses $246,000

- fixed selling and administrative expenses $194,000

net loss = $65,000

if product D14E is discontinued, $196,000 + $111,000 = $307,000, of fixed expenses can be avoided, but $133,000 are not avoidable. if the company discontinues the product, its losses will increase by $133,000 - $65,000 = $68,000

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4 years ago

Doyle Company issued $360,000 of 10-year, 8 percent bonds on January 1, Year 2. The bonds were issued at face value. Interest is

Lina20 [59]

Answer:

The balance of the equation at end of year 2 is$388,800

The balance of the equation at end of year 3 is $417,600

Explanation:

Assets =Liabilities +shareholders' equity

Land +cash Bonds payable retained earnings

1/1/year 2 $360,000 =$360,000

1/1/year 2 $360,000 ($360,000)

31/12/year2 $53,500 = $53,500

31/12/year2 ($28,800) = ($28,800)

Balance $388,800 = $388,800

Opening balance $388,800= $388,800

31/12/year3 $53,500= $53,500

31/12/year3 ($28,800)= ($28,800)

Balance $ 417,600 $417,600

The interest on bond=$360,000*8%=$28,800

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4 years ago

A certain movie star's salary for each film she makes consists of a fixed amount, along with a percentage of the gross revenue t

umka2103 [35]

Salary relationships usually have behaviors that can be expressed through mathematical equations, for this case we must locate the information they give us, according to which the salary of the movie star $S$ is equal to a fixed basic remuneration $b$ plus a percentage $x$ of the gross income $g$ , that is:

$S = b + gx$

With this equation and the data they give us, we can solve the request so :

$\boldsymbol{1)} \; 32 = b + 100x\\\boldsymbol{2)} \; 24 = b + 60x$

We clear the basic remuneration $b$ from the second equation and replace in the first:

$\boldsymbol{2)} \; 24 = b + 60x\\24-60x = b\\\boldsymbol{1)} \; 32 = b + 100x\\32 = (24-60x) + 100x\\32-24=100x-60x\\8=40x\\\frac{8}{40} =x\\\boldsymbol{x=0,2}\\b=24-60x\\b=24-60(0,2)\\b=24-12\\\boldsymbol{b=12}$

Thus, with the fixed basic remuneration and the percentage of gross income calculated, we can estimate how much the following film should obtain so that the movie star obtains at least $40$ millions salary:

$40 = g (0.2) +12\\40-12 = g (0.2)\\\frac{28}{0.2y} = g\\\boldsymbol{g = 140}$

Answer

The minimum amount of gross income that the next film should generate is $\$ 140$ millions

3 0

4 years ago

Read 2 more answers