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
Savatey [412]
3 years ago
15

Modern Federal Bank is setting up a brand-new branch. The cost of the project will be $1.2 million. The branch will create addit

ional cash flows of $235,000, $412,300, $665,000 and $875,000 over the next four years. The firm's cost of capital is 12 percent. What is the internal rate of return on this branch expansion
Business
1 answer:
KonstantinChe [14]3 years ago
3 0

Answer:

23.12%

Explanation:

Internal rate of return (IRR) is the rate at which the Net present value (NPV) of a project equals to zero.

Using a financial calculator and the CF function, input the following to find IRR;

Initial investment; CF0 = -1,200,000

Yr1 cashflow inflow ; C01 = 235,000

Yr2 cashflow inflow ; C02 = 412,300

Yr3 cashflow inflow ; C03 = 665,000

Yr4 cashflow inflow ; C04 = 875,000

Then key in IRR CPT = 23.119%

Therefore, the Internal rate of return this expansion is 23.12%

You might be interested in
Financial literacy is the set of skills and knowledge needed to make __________ about money matters. A.informed decisions B.unin
JulsSmile [24]
Financial literacy is the set of skills and knowledge needed to make INFORMED DECISION about money matters.  The correct option is A.
Financial literacy refers to an education that empowers one with knowledge and understanding about how to manage money in an efficient manner. It enables one to make financial decisions that are based on facts and not emotions. Financial literacy involves acquiring skills in making appropriate financial decisions which can involve any of the following: budgeting, insuring, investing, tax planning, retirement, etc.
3 0
3 years ago
At the present time, Water and Power Company (WPC) has 5-year noncallable bonds with a face value of $1,000 that are outstanding
kicyunya [14]

Answer:

6.53%      

Explanation:

For computing the after cost of debt we need to use the RATE formula i.e to be shown in attached spreadsheet. Kindly find it below:

Given that,  

Present value = $1,050.76

Future value or Face value = $1,000  

PMT = 1,000 × 10% = $100

NPER = 5 years

The formula is shown below:  

= Rate(NPER;PMT;-PV;FV;type)  

The present value come in negative  

So, after applying this above formula

1. The pretax cost of debt is 8.70

2. And, the after tax cost of debt would be

= Pretax cost of debt × ( 1 - tax rate)

= 8.70% × ( 1 - 0.25)

= 6.53%      

6 0
2 years ago
A. Kacy Spade, owner, invested $15,500 cash in the company in exchange for common stock.
svlad2 [7]
A......................
6 0
3 years ago
All of the following are true statements about the economy of the middle colonies, EXCEPT:
gayaneshka [121]
The right answer for the question that is being asked and shown above is that: "d. Disease killed more people in the middle colonies because of its cooler climate, resulting in a labor shortage." All of the following are true statements about the economy of the middle colonies, EXCEPT Disease killed more people in the middle colonies because of its cooler climate, resulting in a labor shortage.<span>
</span>
8 0
3 years ago
A typical grocery store in the United States may sell oranges grown primarily in California during part of the year and oranges
Rama09 [41]

In United States, the oranges are available round the year because the grocery stores sell oranges that are grown in locations with similar climates but different growing seasons.

<u>Explanation</u>:

Orange is a seasonal fruit. The growth of orange can be witnessed from November to April in the United States of America. The supply of orange will reach its peak during January-March.

Oranges are good source of vitamin C and are rich in nutrition. The antioxidant in the orange helps in lowering the risk of heart disease and kidney stones.

In United States, the oranges are available round the year because the grocery stores sell oranges that are grown in locations with similar climates but different growing seasons.

4 0
3 years ago
Other questions:
  • Marigold Corp. uses the percentage of receivables method for recording bad debts expense. The accounts receivable balance is $12
    6·1 answer
  • Problem 1-11 For most products, higher prices result in a decreased demand, whereas lower prices result in an increased demand.
    8·1 answer
  • Subjective performance evaluations are subject to several rater errors, which makes objective measures seem a better alternative
    12·1 answer
  • Winter's Toyland has a debt-equity ratio of .57. The pretax cost of debt is 8.2 percent and the required return on assets is 14.
    15·2 answers
  • Charlotte was born to a lower class family in rural pennsylvania. after taking a job in the mail room of a large corporate offic
    7·1 answer
  • How do stocks and bonds differ?
    12·1 answer
  • A prototype is a Group of answer choices mental grouping of similar objects, events, ideas, and people. step-by-step procedure f
    9·1 answer
  • Rollerbeam Inc., a provider of engineering services, is looking to hire several maintenance engineers. Rollerbeam's HR departmen
    15·1 answer
  • Give at least five (5) names of entrepreneurs that you know, may it be from your locality or within the Philippines. Identify wh
    9·1 answer
  • Kohl’s is addressing the increasing importance of technology in the retail experience by investing in.
    9·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!