Answer:
E. If Projects S and L have the same NPV at the current WACC, 10%, then Project L, the one with the lower IRR, would have a higher NPV if the WACC used to evaluate the projects declined.
Explanation:
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
Answer:
B) $114,000
Explanation:
To calculate the operating cash flows using the top down approach we can use the following equation:
operating cash flow = increase in total sales - increase in total expenses - increase in taxes paid
operating cash flow = $975,000 - $848,000 - ($154,000 - $141,000) = $975,000 - $848,000 - $13,000 = $114,000
I didn't include depreciation since it is normally included to calculate the increase in taxes but taxes were already given.
Answer: Asset: Left; Increased
Explanation:
<em>Equipment is an </em><u><em>asset </em></u><em>account. It is reported on the </em><em>l</em><u><em>eft</em></u><em> side of the accounting equation and is </em><em>i</em><u><em>ncreased</em></u><em> when equipment is purchased.</em>
Equipment is a fixed asset because it lasts more than a year in the service of a company. As an asset, it will be reported on the left side of the accounting equation which means that when it increases it is to be debited.
It increases when more equipment is acquired.
<span>Bargaining may be different in business setting compared to interpersonal because of many different reasons. In business you can bargain with purchasing power of a company. you can use future large purchases to lower the cost, where a person wouldn't have the funds to do so.</span>
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