Answer:
IRR = 13.05%
Explanation:
using an excel spreadsheet, the cash flows are:
year 0 = -$3,200,000
year 1 = $425,000
year 2 = $425,000 x 1.08 = $459,000
year 3 = $459,000 x 1.08 = $495,720
year 4 = $535,378
year 5 = $578,208
year 6 = $624,464
year 7 = $674,422
year 8 = $728,375
year 9 = $786,645
year 10 = $849,577
year 11 = ($849,577 x 1.08) - $480,000 = $917,543 - $480,000 = $437,543
IRR = 13.05%
The internal rate of return (IRR) is the discount rate at which a project's NPV (net present value) would equal $0.
Exactly, when someone buys an insurance policy that person is making sure that whatever happens to him/her, there is the policy to compensate for something that will be lost. He/she is transferring the risk away and pass it on to the insurance company for safekeeping.
Answer:
$284,000
Explanation:
ABC Corporation
Consolidate Income Statement
For the year ended, 31 December, 20XX
Particulars ABC XYZ
Sales $500,000 320,000
Less: Expenses <u>$(280,000) $(240,000)</u>
Net Income $220,000 $80,000
Consolidated Income for the year under the proprietary theory approach for ABC corporation = $220,000 + (80,000 × 80%) = $220,000 + 64,000
= $284,000
According to the proprietary theory approach, the wholly-owned company will get the same percentage it owns the proportionate of that subsidiary company or companies.
