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
Law Incorporation [45]
3 years ago
12

initial cash investment of $388,000. The project will produce no cash flows for the first two years. The projected cash flows fo

r years 3 through 7 are $69,000, $88,000, $102,000, $140,000, and $160,000, respectively. How long will it take the firm to recover its initial investment in this project?
Business
1 answer:
Sedaia [141]3 years ago
8 0

Answer:

6.92 years

Explanation:

The payback period measures how long it takes for the amount invested in a project to be recovered.

The total cost of the project is $388,000.

Because the project generates no cash flow in the first and second year , the amount recovered would be 0.

In the third year, the amount recovered of $388,000 is $69,000. This reduces the cost of the project to $319,000.

In the fourth year , the amount recovered is $88,000. This reduces the cost of the project to $231,000.

In the fifth year, the amount recovered is $102,000. This reduces the cost of the project to $129,000.

In the sixth year, the amount recovered is $140,000. This covers the cost of the project and generates a profit of $11,000.

The amount is recovered in the 6th year + 129000/ 140,000 = 6.92 years

I hope my answer helps you

You might be interested in
During 2018, P Company discovered that the ending inventories reported on its financial statements were incorrect by the followi
const2013 [10]

Answer:

D. $30,000 overstated

Explanation:

Understatement of ending Inventory overstate the value of cost of Goods sold and understate the value of Net income and retained earning as well.

Overstatement of ending Inventory understate the value of cost of Goods sold and overstate the value of Net income and retained earning as well.

In 2016 the net income and retained earning was understated by $120,000.

In 2017 the net income and retained earning was overstated by $150,000.

Net Effect of both event in Retained earning at January 1, 2018

$150,000 overstated - $120,000 understated = $30,000 overstated

4 0
3 years ago
In which stage would you typically expect to see large negative Financing Cash Flows?
kvasek [131]

Answer:

a. Startup

Explanation:

  • The negative cash flows are when the firms are having more cash outflow than the cash inflow and spending of the company is more than the earning and thus experiencing a negative cash flow.
  • This is a situation is found in the growth phase as they demand more money to generated and spend money to fuel growth and acquire the new customers and that may be set up by the distribution channels.
  • Thus startup of the company or industry can show more negative cash flows.
4 0
3 years ago
Of all the types of managers, managers of global social media campaigns are the ones who need not be aware of the cultures of th
Eduardwww [97]

Answer:

False

Explanation:

Of all the managers, managers of global social media campaigns are the ones who need to be most aware of the cultures in the countries in which they operate.

6 0
3 years ago
Lincoln, Inc., which uses a volume-based cost system, produces cat condos that sell for $90 each. Direct materials cost $15 per
pogonyaev

Answer:

The gross profit margin for the cat condo is 50%

Explanation:

Since the gross profit per unit is not given, so first we have to find it. The calculation is shown below:

= Selling price per unit - Direct materials cost per unit - direct labor costs per unit - Manufacturing overhead per unit

= $90 per unit - $15 per unit - $10 per unit - $20 per unit ( $10 per unit × 200%)

= $45 per unit

Now apply the Gross profit formula which is shown below:

= (Gross profit per unit ÷ selling price per unit) × 100

= ($45 per unit ÷ $90 per unit) × 100

= 50%

7 0
3 years ago
The promotional mix consists of:a. public relations, direct marketing, personal selling, and publicityb. advertising, personal s
Ira Lisetskai [31]

Answer: B

Explanation:

7 0
3 years ago
Other questions:
  • If staff salaries were $32,000/month last year and $47,000/month this year, what is the total yearly labor cost increase?
    12·1 answer
  • Linda and Richard are married and file a joint return for 2019. During the year, Linda, who works as an accountant for a nationa
    11·1 answer
  • Rankin Corp. common stock is priced at $74.20 per share. The company just paid its $1.10 quarterly dividend. Interest rates are
    7·1 answer
  • Megan, a human resource manager, recently approved the hiring of five summer interns. She will use ________ to decide which depa
    14·1 answer
  • The county supervisor is considering building a community pool and has gathered data on how much residents are willing to pay. H
    7·1 answer
  • Why must people make choices in economic situations?
    15·1 answer
  • suppose company has a 32% income tax rate, a contribution margin ratio of 45% and fixe costs of 664,000. what sales volume is ne
    13·1 answer
  • Variable manufacturing overhead is applied to products on the basis of standard direct labor-hours. If the labor efficiency vari
    11·1 answer
  • Taking stock of where the firm or product has been recently, where it is now, and where it is headed in terms of the organizatio
    10·1 answer
  • 1. Critical analysis Q2 Suppose that college students in your town persuaded the town council to enact a law setting the maximum
    9·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!