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insens350 [35]
3 years ago
6

Heap Corporation is considering an investment in a project that will have a two year life. The project will provide a 10% intern

al rate of return, and is expected to have a $40,000 cash inflow the first year and a $50,000 cash inflow in the second year. What investment is required in the project? (Ignore income taxes.) Click here to view Exhibit 13B-1 and Exhibit 13B-2, to determine the appropriate discount factor(s) using the tables provided. Multiple Choice $74,340 $77,660 $81,810 $90,000
Business
1 answer:
Vlad1618 [11]3 years ago
6 0

Answer:

$77,660

Explanation:

IRR signifies the interest rate where the net present value equals zero.

In order to reverse work the investment, the present values of the cash flow from this new project - when discounted at 10% should equal the amount of investment.

IRR signifies that Initial outlay - PV Cash flows @ 10% = 0

We calculate the present values as,

PV = 40,000 * (1 / 1+0.10)     +      50,000 * [1 / ((1+0.10)^2)}

PV = $77,685.9 (rounded off)

This is closest to $77,660, which is the initial outlay required to to generate above mentioned pc vash flows and an irr of 10%.

Hope that helps.

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Product A is normally sold for $9.60 per unit. A special price of $7.20 is offered for the export market. The variable productio
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Answer:

A. Reject (Alternative 1) $0.00

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B. Accepted (Alternative 2)

Explanation:

a. Preparation of a differential analysis dated March 16 on whether to reject (Alternative 1) or accept (Alternative 2) the special order.

DIFFERENTIAL ANALYSIS

Reject (Alternative 1) or Accept (Alternative 2)

March 16

Reject Accept Differentials Effect on income

(Alternative 1) (Alternative 2) (Alternative 2)

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b. Based on the above differential analysis

the special order should be ACCEPTED (Alternative 2).

5 0
3 years ago
Exercise 5-17 (Algorithmic) (LO. 4, 8) Rover Corporation would like to transfer excess cash to its sole shareholder, Aleshia, wh
CaHeK987 [17]

Answer:

The correct answer that a dividend is a better choice is . a. Regarding taxes, which would benefit Aleshia the most? The $114,000 dividend because after taxes she would have $ from the dividend and $ 86,640 from the bonus.

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A dividend is a payment made by a corporation to its shareholders, usually as a distribution of profits. When a corporation earns a profit or surplus, the corporation is able to re-invest the profit in the business and pay a proportion of the profit as a dividend to shareholders.

A tax (from the Latin taxo) is a compulsory financial charge or some other type of levy imposed upon a taxpayer (an individual or legal entity) by a governmental organization in order to fund various public expenditures. A failure to pay, along with evasion of or resistance to taxation, is punishable by law.

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most reasonable answer

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