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lara [203]
3 years ago
9

Consider the following cash flows for two mutually exclusive capital investment projects. The required rate of return is 7%. Use

this information for the questions. Year Project A Cash Flow Project B Cash Flow 0 -$32,400 -$14,400 1 9,720 4,320 2 9,720 4,320 3 9,720 4,320 4 4,860 2,160 5 4,860 2,160 6 2,430 2,160 Calculate the net present value of project A.?
1.1.117
2.0.94
3.1.128
4.1.09
5.1.06
Business
1 answer:
konstantin123 [22]3 years ago
3 0

Answer:

$1,900.35

Explanation:

Net present value is the present value of after tax cash flows from an investment less the amount invested.

The npv can be calculated using a financial calculator:

Cash flow in year 0 = -$32,400

Cash flow in year 1 = $9720

Cash flow in year 2 = $9720

Cash flow in year 3 = $9720

Cash flow in year 4 = $ 4,860

Cash flow in year 5 = $ 4,860

Cash flow in year 6 = $2,430

I =7%

NPV = $1,900.35

To find the NPV using a financial calacutor:

1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.

2. After inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.

3. Press compute

I hope my answer helps you

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4 0
1 year ago
Solve the problem using 6.2%, up to $128,400 for Social Security tax and using 1.45%, no wage limit, for Medicare tax.
bekas [8.4K]

$3878.55

Explanation:

Step 1 :

It is given that Kristy has a biweekly gross earnings of $1950.

Since it is bi-weekly payments there are 26 payments in the year.

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Step 2 :

It is given that the social security tax is 6.2% up to $128,400. Kristy's earnings of 50,700$ does not exceed the threshold $128,400, hence 6.2% of her entire income is subject to social security withholding.

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