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
Anton [14]
3 years ago
13

Winston Clinic is evaluating a project that costs $52, 125 and has expected net cash inflows of $12,000 per year for eight years

. The first inflow occurs one year after the cost outflow, and the project has a cost of capital of 12 percent. What is the project's payback? What is the project's NPV? Its IRR? Its MIRR? Is the project financially acceptable? Explain your answer.
Business
1 answer:
kvv77 [185]3 years ago
5 0

Answer:

Payback period (years):  4.23  years

NPV: $6,685  

IRR: 16%

MIRR: 14%

The project is financially acceptable because IRR and MIRR is greater than cost of capital

Explanation:

Payback period is calculating the number of year when cash inflow can cover cash outflow (regardless the present value of cash inflow).

As we can easily estimate, cash inflow in 5 year can cover the investment.

Then payback period = 4 years + 12000/52,125 = 4.23 years

We can use excel to calculate NPV, IRR, MIRR in the formula as below

Net present value of project: NPV=(discounting rate, cash outflow, cash inflow) = (12%, -52125,12000,12000......,12000) = $6,685

Internal rate of return: IRR= (cash outflow, cash inflow) = ( -52125,12000,12000,......,12000) = 16%

Modified internal rate of return: MIRR = (cash outflow, cash inflow, IRR, cost of capital) = (-52125,12000,12000......,12000,16%,12%) = 14%

<em>Please see attachment for more details.</em>

Download xlsx
You might be interested in
Question 7 of 10
slega [8]

Answer:

b because I would say in am 72% sure I am right

4 0
2 years ago
Which of the following headings should be included in your résumé?
Evgesh-ka [11]
D. all of the above
hope this helped:)
6 0
3 years ago
Read 2 more answers
Monetary policy is made by which part of the federal reserve? the board of governors. the federal open market committee. the fed
aliya0001 [1]
<span>Monetary Policies in the United States are regulated by the Federal Open Market Committee (FOMC) which is a sister arm of the Federal Reserve Board and it says which direction the financial bearings and adjustment of the united state financial conditions sway towards A vote to transform the financial outcome of United States by this FOMC through it's monetary policies can either purchasing or offering US government securities in the open market to build up the advancement of the country.</span>
3 0
3 years ago
Describe at least four factors that affect the demand for a particular commodity.
MrMuchimi

Answer with Explanation:

There are so many factors affecting the demand for a particular commodity. Four of these are: the price of the complements, the income of buyers, changes in trend and advertisements.

1. The price of the complements - Some commodities are complementary with each other, just like cars and gas. If the <em>price of cars decreases</em>, then many people will purchase their own cars, which also follows that <em>the demand for gas will increase.</em>

2. The income of buyers - If the income of a person increases, then he will most likely purchase a particular commodity because he can afford it and has an extra money to purchase goods.

3. Changes in trend - Many people purchase goods because they're on trend. For example, if flare pants are fashionable this year, then the demand for it will increase. Once they're no longer on trend, the demand will drop.

4. Advertisements - The more advertisements a company spends on, the more likely buyers will purchase a specific commodity.

5 0
3 years ago
MicroTech Corporation maintains a capital structure of 40 percent debt and 60 percent common equity. To finance its capital budg
timama [110]

Answer:

weighted cost of capital for next year is 10.27 %.

Explanation:

Weighted cost of capital = Ke × (E/V) + Kd × (D/V)

Ke = Cost of Equity

    = Dividend Yield + Expected growth rate

    = $1.30 / $30.00 + 0.07

    = 0.11333 or 11.33 %

Kd = Cost of Debt

     = Interest × (1 - tax rate)

     = 11% × ( 1 - 0.21)

     = 8.69 %

Weighted cost of capital =  11.33 % × 60% + 8.69 % × 40%

                                         = 10.27 %

5 0
3 years ago
Other questions:
  • Whereas decision-making is perceived as ______ within the finding approach, decision-making is thought to be ______ in the build
    6·1 answer
  • How do Equal Employment Opportunity laws protect job applicants?
    5·1 answer
  • Software that streamlines and automates business processes and enables organizations to use data effectively is called _______ s
    15·1 answer
  • Aria has a credit card that gives a 5% discount on every purchase and free shipping when used online. The annual percentage rate
    6·1 answer
  • Gig Harbor Boating is the wholesale distributor of a small recreational catamaran sailboat. Management has prepared the followin
    9·1 answer
  • If oregon passed a statue that prohibited liquor stores
    11·1 answer
  • Who is the preaident of India​
    7·1 answer
  • Kevin decided that he wanted to buy a $32,000 new car. He paid $1,000 for a down payment
    14·1 answer
  • Which of the following statements describes the most likely reason why
    13·1 answer
  • Where do financial institutions get the funds that they lend to customers?
    8·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!