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777dan777 [17]
3 years ago
9

Fernando Designs is considering a project that has the following cash flows and WACC data. What is the project's discounted payb

ack period? (6 points) What is the project’s modified internal rate of return?
Business
1 answer:
bezimeni [28]3 years ago
8 0

Answer:

Discounted Payback period 3 years

Modified Internal rate of return 4.833%

Explanation:

Fernando Designs has following cash flows ,

year 1 : -$900

Year 2 : $500

Year 3 : $500

Year 4 : $500

Using 10% discount factor the cashflows will be,

discounted values

Year 1 : -900

Year 2 : 454.54

Year 3 : 445.45

Year 4 : 4132231

Payback period is -900 + 454.54 +445.45 = 3 years.

Modified Internal rate of return; \sqrt[n]{\frac{FV of cash inflows}{PV of cash outflow} }

\sqrt[4]{\frac{1314}{900} } = 4.833%

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The fixed costs of WeBuy&Sell.com, an e-commerce website, make up about 90 percent of the total costs incurred by the compan
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A) horizontal

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3 years ago
Hardy Inc. has two operating departments (1 and 2) and is considering renting a new machine to help automate the printing proces
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Answer:

$6,900

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3 years ago
A firm has the following accounts and financial data for 2007:
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Answer:

The correct answer is $302.40.

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According to the scenario, the computation can be done as:

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