Answer:
The payback period is more than 5 years
Explanation:
Net present value is the Net value of all cash inflows and outflows in present value term. All the cash flows are discounted using a required rate of return.
Year Cash flow PV factor Present Value
0 ($490,000) 1 ($490,000)
1 $40,000 0.909 $36,360
2 $10,000 0.826 $8,260
3 $120,000 0.751 $90,120
4 $90,000 0.683 $61,470
5 $180,000 0.621 <u> $111,780 </u>
Net Present Value ($182,010)
NPV of this Investment is negative so, it is not acceptable.
Payback period
Total Net cash inflow of the investment is $440,000 and Initial investment is $490,000. This investment will take more than 5 years to payback the initial investment.
Answer: $651,000
Explanation:
From the above question, Apple's iPod carries a two-year warranty against manufacturer's defects.
warranty costs are expected to be approximately 3% of sales.
Total sales are $30.7 million, and actual warranty expenditures are $270,000.
Total warranty cost = $30.7 million x 3% = $921,000
During the 1st year only $270,000 of warranty expenses was made.
Therefore the company will carry as liability at the end of the year a total of $921,000 - $270,000 = $651,000
Answer:
The amount of overhead applied during the year is $2,400,000
Explanation:
In determining overheads amounts to be included in product costing, a company uses Budgeted overheads.
Budgeted overheads are used rather than actual overheads because of the delays that are made to obtain Actual data for Actual overhead amounts which will delay product costing.
Therefore Using machine hours as a base, the amount of overhead applied during the year is $2,400,000
Answer:
Payout ratio =1- 12.96%*45%*9/1.4 = 0.6252 or 62.52%
Explanation:
WACC = Weight of Equity * Cost of Equity + Weight of Debt * (1-Tax rate) * Cost of Debt
16% = 45%* Cost of Equity + 55%*(1-40%)*9%
16%-55%*(1-40%)*9% = 45%*Cost of Equity
Cost of Equity = 28.9556%
Current price of Stock = D1/(Cost of Equity - Growth)
25 = 4/(28.9556%-Growth)
Growth = 28.9556%-4/25 = 12.96%
ROE = Net income/Equity = 1.4/(45%*9)
Growth rate = (1- Payout ratio)*ROE
12.96% = (1-Payout ratio)* 1.4/(45%*9)
Payout ratio =1- 12.96%*45%*9/1.4 = 0.6252 or 62.52%
They can do what they want they are millionaire athletes that have a fanbase not saying its right by any means.
