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
chubhunter [2.5K]
4 years ago
9

Empire Industries is considering adding a new product to its lineup. This product is expected to generate sales for four years a

fter which time the product will be discontinued. What is the project's net present value if the firm wants to earn a 13 percent rate of return?
Year. Cash Flow
0 --- -62,000
1 --- 16.500
2 --- 23,800
3 --- 27,100
4 --- 23,300

a. $3,505.52
b. $3,767.24
c. $4,312.65
d. $4,519.58
e. $4,902.71
Business
2 answers:
Andreyy894 years ago
7 0

Answer:

The project's net present value if the firm wants to earn a 13 percent rate of return is c. $4,312.65

Explanation:

The Net Present Value of a Project is Calculated by Taking the Present Day (Discounted) Value of All future Net Cashflows based on the <em>Business Cost of Capital</em> and <em>Subtracting</em> the initial Cost of the Investment.

Using A Financial Calculator Cf Function:

Cf0 = -62,000

Cf1 =   16.500

Cf2 =  23,800

Cf3 =  27,100

Cf4 =  23,300

IRR = 13 %

NPV = 4,312.65

shepuryov [24]4 years ago
7 0

Answer: C. $4,312.65

Explanation:

Given the following;

Cashflow :

Year 0 --- -62,000

Year 1 --- 16,500

Year 2 --- 23,800

Year 3 --- 27,100

Year 4 --- 23,300

Net present value(NPV)

Internal Rate of Return(IRR) = 13% = 0.13

Using the formula ;

NPV = year 0 + (year 1 ÷ (1+IRR)) + (year 2 ÷ (1+IRR)^2) + (year 3 ÷ (1+IRR)^3) + (year 4 ÷ (1+IRR)^4)

NPV = - $62,000 + ($16,500 ÷ (1.13)) + ($23,000 ÷ (1.13)^2) + ($27,100 ÷ (1.13)^3) + ($23,300 ÷ (1.13)^4)

NPV = -$62,000 + $14,601.77 + $18,638.89 + $18,781.66 + $14,290.33 = $4,312.65

You might be interested in
Suppose that you enter into a short futures contract to sell July silver for $17.20 per ounce. The size of the contract is 5,000
ivanzaharov [21]

Answer:

$0.20

Explanation:

For computing the change in future price, first we have to determine the loss which is shown below:

Loss = Initial Margin - Maintenance Margin

        = $4,000 - $3,000

        = $1,000

Now the change in future price would be

= Loss ÷ size of the contract

= $1,000 ÷ 5,000 ounces

= $0.20

The future price is increased by $0.20

And, if the margin call is not meet than the broker will stop at best price so that he cannot suffer more loss

7 0
3 years ago
Read 2 more answers
Create a bulleted list of four possible interests a person could have.
LUCKY_DIMON [66]

Answer:

  • Volunteer Work/Community Involvement
  • Child Care
  • Club Memberships
  • Traveling

8 0
3 years ago
A miner working for a mining company requests the purchasing agent of the company to buy a particular brand of high powered LED
sesenic [268]

Answer:

The correct answer is letter "B": users.  

Explanation:

We can identify seven (7) roles members of a company can play in the organizational purchasing process: <em>initiators, users, buyers, influencers, deciders, approvers, </em>and <em>gatekeepers</em>. The users are the characters who are likely to benefit directly from the purchase since the products bought will be provided to them. Sometimes they play the role of the <em>initiators </em>requesting what is necessary.

7 0
3 years ago
Levi Strauss has some of its jean stone-washed under a contract with independent U.S. Garment Corp. If U.S. Garment's operating
Damm [24]

Answer:

C  $ 57,282.803

Explanation:

We solve for a growing annuity at arithmetic increases of 5,000

(a_1+\frac{d}{r} +d \times n) \times \frac{1-(1+r)^{-time} }{rate} - \frac{d \times n}{r}

a1 = 30,000

d = 5,000

r = 0.10

time = n = 10

(30,000+\frac{5,000}{0.1} +5,000 \times 10) \times \frac{1-(1+0.1)^{-10}}{0.10} - \frac{5,000 \times 10}{0.10}

PV $298,793.72

Now, we calculate the installment of this which is the equivalent uniform annual cost

PV \div \frac{1-(1+r)^{-time} }{rate} = C\\

PV 298,793.72

time 10

rate 0.14

298793.723741609 \div \frac{1-(1+0.14)^{-10} }{0.14} = C\\

C  $ 57,282.803

5 0
3 years ago
Daniela is a 25% partner in the JRD Partnership. On January 1, JRD makes a proportionate distribution of $16,000 cash, inventory
ololo11 [35]

Answer: The answer is as follows:

Explanation:

Given that,

Cash = $16,000

Inventory = $16,000 fair value (inside basis $8,000)

Accounts receivable with a fair value = $8,000 (inside basis of $12,000) to Daniela

Daniela's basis = $20,000

JRD basis = cash + inventory + accounts receivables

                = 16,000 +  2,000 + 2,000

                =$20,000

Out of $20,000,

Pending amount for inventory and accounts receivable allocation:

= JRD basis - Cash basis

= $20,000 - $16,000

= $4,000

This pending amount is allocated equally among the inventory and accounts receivable i.e, $2,000 is allocated to inventory and $2,000 is allocated to accounts receivable.

8 0
3 years ago
Other questions:
  • How do oligopolies influence market inefficiencies?
    10·1 answer
  • The Technix Computer Corp recently finished construction of a customer service phone center in New Dehli, India. Phone center ag
    5·1 answer
  • What is the economic problem
    8·1 answer
  • What is a general advantage of setting promotion budgets to whatever level companies believe they can afford? Does not acknowled
    10·1 answer
  • When entering variables in a spreadsheet function (or in a financial calculator) the "sign convention" can be critical to achiev
    6·2 answers
  • A store and a bank would both charge fees for _____.
    9·1 answer
  • A project has 70% probability of doubling your investment in a year and 30% probability of halving your investment in a year. Wh
    10·1 answer
  • Kava Inc. manufactures industrial components. One of its products, which is used in the construction of industrial air condition
    8·1 answer
  • The WBS includes all the elements included and excluded as described in the Scope
    12·1 answer
  • simon and jeffrey are a married couple. they had taken title of a condo before they married with simon owning 30% and jeffrey ow
    7·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!