Answer:
a. $ 82, 063
b. - $ 19,206
c. 11.24%
Explanation:
Net Present Value is calculated by taking the Present Day (Discounted) value of all future Net Cash flows based on the company`s Cost of Capital and subtracting the Initial Cost of the Investment.
<em>Using a Financial Calculation</em>
a.
Cash flow Amount
Cf0 = ($665,000)
Cf1 = $130,000
Cf2 = $130,000
Cf3 = $130,000
Cf4 = $130,000
Cf5 = $130,000
Cf6 = $130,000
Cf7 = $130,000
Cf8 = $130,000
i = 8%
NPV = $ 82, 063
b.
Cash flow Amount
Cf0 = ($665,000)
Cf1 = $130,000
Cf2 = $130,000
Cf3 = $130,000
Cf4 = $130,000
Cf5 = $130,000
Cf6 = $130,000
Cf7 = $130,000
Cf8 = $130,000
i = 12%
NPV = - $ 19,206
c.
Internal Rate of Return = P + ((N-P)×p/(p+n))
= 8% + ((12%-8%)×$ 82, 063/($ 82, 063+ $ 19,206))
= 11.24%
Answer:
Following Becky's estimation, the bad debt expense must be equal than the 8% of the total credit, less the value already booked in the balance sheet accounts (doubtful accounts).
Explanation:
In this case, 2,000,000*8%=160,000. Then this 160,000 must be subtracted to 2,200 (160,000-2,200=157,800). Finally, the bad debt expense to be reported is $157,800
Answer:
[b] = $ 2500
[c] = $ 7500
[d] = Gross margin = 22500 – 15000 = $ 7500
Net Income = 7500 – 4000 = $ 3500
[e] = $ 3500
Explanation:
Here the solution is given as follows,
Answer:
Total of Xavier's share = $49750
Explanation:
The allocation of net income to both Xavier and Yolonda will be as follows,
Net Income 90000
<u>Interest on Capital:</u>
Xavier(0.15 * 100000) 15000
Yolonda(0.15 * 50000) <u> 7500</u> <u> (22500)
</u>
67500
<u>Salary:</u>
Xavier 22000
Yolonda <u>20000</u> (<u>42000)</u>
25500
<u>Share of remaining profit:</u>
Xavier 12750
Yolonda <u>12750</u> <u>25500
</u>
<u />
Total of Xavier's share = 15000 + 22000 + 12750 = $49750
