1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
tangare [24]
3 years ago
5

Fox Co. has identified an investment project with the following cash flows. Year Cash Flow 1 $ 1,250 2 1,180 3 1,570 4 1,930 a.

If the discount rate is 12 percent, what is the present value of these cash flows? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. What is the present value at 15 percent? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) c. What is the present value at 21 percent? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Business
1 answer:
yulyashka [42]3 years ago
3 0

Answer: a. $4400.81

b. $4114.99

c. $3625.60

Explanation:

Present value of money is the worth of money at a particular period of time.

a. If the discount rate is 12 percent, what is the present value of these cash flows?

Present value at 12% will be:

= 1250/1.12 + 1180/1.12^2 + 1570/1.12^3 + 1930/1.12^4

= $4400.81

b. What is the present value at 15 percent?

Present value at 15% will be:

= 1250/1.15 + 1180/1.15^2 + 1570/1.15^3 + 1930/1.15^4

= $4114.99

c. What is the present value at 21 percent?

Present value at 21% will be:

= 1250/1.21 + 1180/1.21^2 + 1570/1.21^3 + 1930/1.21^4.

= $3625.60

You might be interested in
D.v.g. (a minor) was injured in a one-car auto accident in hoover, alabama. the vehicle was covered by an insurance policy issue
diamong [38]

Answer:

Yes, the court ruled in favor of D.V.G.'s mother, because of the principle that contracts entered by minors are not void, but voidable, and that they do have an effect on the parties, but if voided, they cannot be enforced.

In this case, the minor died before the contract was ratified by the court, but the minor hadn't voided the contract, so it was still good at the moment of his death. The minor had the chance of either approving or rejecting the contract while still living, and decided not to revoke it.

Explanation:

NATIONWIDE MUTUAL INSURANCE COMPANY and State Farm Mutual Automobile Insurance Company v. Barbara Walker WOOD, as administratrix of the estate of D.V.G., a minor, deceased, and K.C.T., a minor, by and through Earnest T., his father and next friend.  1111486. Decided: February 22, 2013

As this Court has stated, <em>“ ‘[i]t is well settled by the authorities that infants are not liable on any of their contracts, except for necessaries. With the exception, all other contracts of infants, whether executory or executed, may be avoided or ratified at the election of the infant.’ ”</em>

The final ruling was:

<em>"Under Alabama law, an insurance company is bound to a settlement agreement negotiated on behalf of an injured minor, even if that minor dies before the scheduling of the court hearing that all parties agreed was necessary to obtain approval of the settlement agreement. In accordance with the parties' understanding, such a hearing is still required, and the minor's death does not render that hearing impossible. We thus answer in the affirmative the question certified to this Court."</em>

6 0
3 years ago
QRM, Inc.'s marginal tax rate is 35%. It can issue 10-year bonds with an annual coupon rate of 7% and a par value of $1,000. Aft
puteri [66]

Answer:

4.87%

Explanation:

In this question , we are asked to calculate the appropriate after-tax cost of new debt for the firm to use in capital budgeting analysis.

PMT = 1000*7% = 70 (indicates the amount of interest payment)

Nper = 10 (indicates the period over which interest payments are made)

PV = 966 (indicates the present value)

FV = 1000 (indicates the future/face value)

Rate = ? (indicates the cost of debt)

After Tax Cost of Debt = Rate(Nper,PMT,PV,FV)*(1-Tax Rate) = Rate(10,70,-966,1000)*(1-.35) = 4.87%

6 0
3 years ago
High-Low Method
frozen [14]

Answer:

Requirement 1

<em>High Point = March</em>

<em>Low Point = January</em>

Requirement 2

<em>Variable rate for tanning $0.41 per tanning appointment </em>

<em>Fixed cost per month $1,457</em>

Requirement 3

<em>Total Cost = $1,457 + $0.41 × Activity Level</em>

Requirement 4

<em>Total predicted cost for September $ 2,482</em>

<em>Total fixed cost for September $1,457</em>

<em>Total predicted variable cost for September $1,025</em>

Explanation:

Requirement 1

High Point = March

Low Point = January

Requirement 2

<em>Variable Cost = Difference in Overhead Cost (High - Low)/ Difference in Activity (High - Low)</em>

                       = $2,810 - $1,744 / 3,300 - 700

                       = $1,066/ 2,600

                       = $0.41

<em>Fixed Cost Component = Total Overhead Cost - Variable Cost × Selected Activity.</em>

Lets Select, January 700 $1,744

Fixed Cost Component = Total Overhead Cost - Variable Cost × Selected Activity.

                                       =  $1,744 - $0.41 × 700

                                       =  $1,457

Requirement 3

Cost formula for tanning services

<em>Total Cost = Fixed Cost + Variable Cost</em>

thus,

Total Cost = $1,457 + $0.41 × Activity Level

Requirement 4

Total Cost = $1,457 + $0.41 × Activity Level

                 =  $1,457 + $0.41 × 2,500

                 = $ 2,482

6 0
2 years ago
In the context of the​ firm's supply​ curve, as the firm produces more of a​ good, the cost of producing each additional u
Flura [38]

Answer:

decrease

Explanation:

Marginal cost is a concept that explains the cost a company has to produce one more unit of good. This is a measure that is associated with the productivity of the inputs used in the production process. When a company increases production, marginal cost tends to decrease as inputs are better utilized. This is because the company specializes in production in order to streamline inputs and increase productivity.

5 0
3 years ago
Armstrong industries has a contribution margin of $300,000 and a contribution margin ratio of 30%. how much are total variable c
ozzi
<span> $300,000 / 30% = 1,000,000 - 300,000 = $700,000 </span>
5 0
3 years ago
Other questions:
  • Which type of financing source performs the most strict, rigorous review of business records before guaranteeing financing?
    10·1 answer
  • The area of accountancy that is focused on arranging company financial information to give to managers to make decisions is
    12·1 answer
  • Company X had net income of $200,000 in the year 2016. At the beginning of 2016, there were 500,000 shares of outstanding common
    7·1 answer
  • gain or loss on the disposal of assets is determined by comparing the disposed asset's book value to the value of any assets rec
    14·1 answer
  • The price a property will bring when neither the buyer nor the seller is acting under duress and it has been on the market for a
    12·1 answer
  • Last year real GDP in the imaginary nation of Oceania was 561.0 billion and the population was 2.2 million. The year before, rea
    6·1 answer
  • David contributes investment land with a basis of​ $24,000 and an FMV of​ $40,000 to a partnership for a​ 10% interest in partne
    10·1 answer
  • Appalachian Ski Shop signs a three-month note payable to help finance increases in inventory for the winter ski season. The note
    9·1 answer
  • Trainers at Lako Systems try to maximize the transfer of learning by demonstrating processes on the manufacturing floor rather t
    7·1 answer
  • Interest payable, income tax payable and salary payable are all examples of _______.
    11·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!