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Effectus [21]
3 years ago
12

If a company would still have a cash flow item even if they rejected potential new Project A, should this particular cash flow i

tem be included in Project A's cash flow analysis?
Business
1 answer:
FrozenT [24]3 years ago
8 0

Answer: No

Explanation:

When computing a project analysis for a project, only relevant cash flow should be included in the Project's cash flow analysis. Relevant cash-flow are those that will only occur if the project was embarked on.

If the cash flow in question is still going to occur even if the project wasn't initiated as is the case with Project A, it is not a relevant cash-flow and should not be included in the cash-flow analysis.

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Talks-A-Lot, Inc. sells cell phones to customers and expects that 10% of phones sold will be returned for repair under its warra
poizon [28]

Answer:

amount of warranty liability that should be reported at December 31, 2021 is   $3,375

Explanation:

<em>When the Sale was made, the Warrant Liability is recorded as follows:</em>

Warranty Cost $5,625 (Debit)

Warranty Provision $5,625 (Credit)

Warranty Cost =  750 cell phones × $75 × 10% = $5,625

<em>When Warranty Claims were received during the year the records are as follows :</em>

Warranty Provision $2,250 (Debit)

Cash $2,250 (Debit)

Warranty Cost = 30 × $75 = $2,250

<em>At December 31, 2021 the amount of warranty liability should be</em>

Warranty Provision = $5,625 - $2,250 = $3,375

6 0
3 years ago
problem 08-07 (algo) you are the manager of a monopolistically competitive firm, and your demand and cost functions are estimate
Ad libitum [116K]

Demand function: Q = 48 - 2P

a) 2P = 48 - Q

Therefore the inverse Demand function is

P = 24 - Q/2

b) P = 24 - Q/2

Total Revenue = PQ = (24 - Q/2)*Q

TR = 24Q - Q2/2

MR = differentiating TR with respect to Q

MR = 24 - Q

We know a firm will maximize profit at MR = MC

TC = 6 + 3Q + Q2

MC = 3 + 2Q

Putting MR = MC, we have

24 - Q = 3 + 2Q

24 - 3 = 2Q + Q

21 = 3Q

Q = 21/3 = 7

Q = 7

Putting the value of Q in the equation P = 24 - Q/2

P = 24 - 7/2

P = 24 - 3.5

P = 20.5

Therefore the profit-maximizing output is 7 and the price is $20.5

c) TR = PQ = 20.5*7 = $143.5

TC = 6 + 3Q + Q2 = 6 + 3*7 + 7*7 = 6 + 21 + 49 = $76

Profit = TR - TC = 143.5 - 76 = $67.5

Therefore the firm's maximum profit is $67.5

d) a) entry will occur until profits are zero

In the long run, more and more firms will enter the market and the economic profit will be zero in the long run.

In economics, a Demand function is a graph depicting the connection between the price of a sure commodity and the amount of that commodity that is demanded at that fee. call for curves may be used both for the price-amount courting for a person client, or for all purchasers in a selected marketplace.

Learn more about the Demand function here: brainly.com/question/24384825

#SPJ4

5 0
2 years ago
The Jones are a married couple and have always filed joint tax returns. On May 18, 2017, the couple was assessed with tax defici
Katena32 [7]

Answer:

c. May be able to avoid liability to the extent she had no reason to know of the deficiency (and did not have actual knowledge) when filing the return. The burden of proof will be on her.

Explanation:

The doctrine of <em>innocent spouse relief</em> might apply here. Mrs. Jones will have to prove that:

  1. the income that was omitted was earned by her husband, not her.
  2. she must prove that when she signed the tax filings, she was not aware of the omission.
  3. after examining all the facts surrounding the omission, the IRS must decide that blaming her would not be fair.

8 0
3 years ago
Campbell, a single taxpayer, earns $400,000 in taxable income and $2,000 in interest from an investment in State of New York bon
Artist 52 [7]

Answer: Campbell will owe $115,858.25 in federal income tax this year computed as follows:

$115,858.25= $45,353.75+ 33% x ($400,000 - $186,350)).

Campbell's average tax rate is 28.96 percent.

Average Tax Rate = TotalTax / TaxableIncome = $115,858.25 / $400,000 = 28.96

Campbell's effective tax rate is 28.82 percent.

Effective tax rate = TotalTax / TotalIncome = $115,858.25 / ($400,000 + $2000) = 28.82

Campbell is currently in the 33 percent tax rate bracket. Her marginal tax rate on deductions up to $213,650 will be 33 percent. However, her marginal tax rate on the next $5,100 of income will be 33%, and income earned over $405,100 will be 35 percent. Income earned in excess of $406,750 will be taxed at 39.6%.

3 0
3 years ago
Suppose you are evaluating two mutually exclusive projects, A and B. Project A costs $350 and has cash flows of $250 and $250 in
ki77a [65]

Answer:

The answer is 30%

Explanation:

Solution

Given that:

Project A

Project A costs = $350

Cash flows =$250 and $250 (next 2 years)

Project B

Project B costs =$300

Cash flow = $300 and  $100

Now what is the crossover rate for these projects.

Thus

Year Project A    Project B A-B        B-A

0            -350     -300        -50        50

1             250      300        -50        50

2             250      100         150       -150

IRR         27%      26%         30%      30%

So,

CF = CF1/(1+r)^1 + CF2/(1+r)^2

$-50 = $-50/(1+r)^1 + $150/(1+r)^2

r = 30%

CF = CF1/(1+r)^1 + CF2/(1+r)^2

$50 = $50/(1+r)^1 + $-150/(1+r)^2

r = 30%

Hence, the cross over rate for these project is 30%

Note:

IRR =Internal rate of return

CF =Cash flow

r = rate

5 0
3 years ago
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