the south african government is not providin enough welfare or subsidies to the poor and underprivileged

Savanna Company is considering two capital investment proposals. Relevant data on each project are as follows: Project Red Proje

liberstina [14]

Answer:

(a) Cash payback period:

Project Red = 5.5 years

Project blue = 4.6 years

(b) Net present value for project Red = $19,760

Net present value for project Blue =$164,580

(c) Annual rate of return:

Project Red =11.36%

Project Blue =18.75%

(d) Project Blue

Explanation:

Given Data;

Project Blue Capital investment = $640,000

Project Red Capital investment = $440,000

Project Red Annual Net income = $ 25,000.

Project Blue Annual Net income = $ 60,000

Annual depreciation Project Red = (440000/8)

= 55,000

Annual depreciation Project Blue = (640000/8)

= 80,000

Annual cash inflow project A = $ 80,000

Annual cash inflow project B = $140,000

(a)

Cash payback period = Initial investment/cash flow per period

Project Red = 440000 /80000

= 5.5 years

Project blue = 640000/ 140000

= 4.6 years

(b)

Project Red Present value of cash inflows = 80000 ×5.747

= $459,760

Project Blue Present value of cash inflows =140000×5.747

= 804580

Net present value for project Red = $459,760 - $440,000

= $19,760

Net present value for project Blue = 804580 - $640,000

=$164,580

(c) Annual rate of return:

Project Red = $25,000 / ($440000)/2

=11.36%

Project Blue = $60000/(640000/2)

=18.75%

(d) Savanna should select Project Blue because it has a higher positive NPV and a higher annual rate of return. AND Project Blue has early cash back period also

6 0

3 years ago

What is company culture? what role does it play a small company's success? what threats does rapid growth pose for a company's c

attashe74 [19]

The way a company goes about their business and their mission statement has a lot do with how company culture is set up.In basic terms it is the way things are done

4 0

3 years ago

(Consider This) In the middle ages, the French government auctioned off monopoly rights to the sale of salt. Economic theory pre

ollegr [7]

Babbabababooeeeeeeeeeee

6 0

2 years ago

Phillip is a senior journalist at a news agency. He goes on a temporary leave for six months and travels around different parts

Gelneren [198K]

Answer:

Sabbatical

Explanation:

a period of paid leave granted to a university teacher or other worker for study or travel, traditionally one year for every seven years worked.

8 0

3 years ago

Prepare a classified year-end balance sheet, (Note: A $9,000 installment on the long-term note payable is due within one year.)

Katarina [22]

Answer:

Blessinger Co.

Classified Balance Sheet as at December 31, 2017

ASSETS

Non- Current Assets

Office equipment $38,000

Accumulated depreciation-Equipment ($3,200) $34,800

Building $288,000

Accumulated depreciation-Building ($42,000) $246,000

Land $700,000

Total Non Current Assets $980,800

Current Assets

Accounts receivable $27,000

Prepaid Prepaid $15,000

Insurance $9,000

Office supplies $3,300

Cash $112,000

Total Current Assets $166,300

TOTAL ASSETS $1,157,100

EQUITY AND LIABILITIES

LIABILITIES

Current Liabilities

Accounts payable $25,800

Salaries payable $14,500

Interest payable $2,500

Note Payable $9,000

Total Current Liabilities $51,800

Non-Current Liabilities

Long-term note payable ($72,000 - $9,000) $63,000

Total Non- Current Liabilities $63,000

TOTAL LIABILITIES $114,800

EQUITY

P.Blessinger, Capital $910,000

P. Blessinger, Withdrawals ($200,500)

Profit for the Year $332,800

TOTAL EQUITY $1,042,300

TOTAL EQUITY AND LIABILITIES $1,157,100

Explanation:

A Balance Sheet shows the Balance of Assets, Liabilities and Equity as at the Reporting date.

Calculation of Profit for the year :

$ $

Service fees earned 430,800

Less Expenses

Salaries expense 90,000

Insurance expense 5,200

Rent expense 5,000

Depreciation expense-Equipment 800

Depreciation expense-Building 7,000 (108,000)

Profit for the year 332,800

7 0

3 years ago