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oee [108]
3 years ago
6

"The internal rate of return method differs from the net present value method in that it results in finding the" _______________

____ of the potential investment.
Business
1 answer:
Elenna [48]3 years ago
4 0

Answer: profitability

Explanation: The internal rate of return method differs from the net present value method in that it results in finding the profitability of the potential investment.

In capital budgeting which is the process by which companies determine whether a new investment or expansion opportunity is worthwhile and if undertaken, could either yield net profits or losses for the company, both the net present value (NPV) (present value of cash inflows minus the present value of cash outflows over a given period time) and the internal rate of return (IRR) methods are employed.

How does the IRR method determine profitability? - This it does by using a percentage value rather than a dollar amount and therefore is advantageous in representing the possible returns of investments by comparing it with other alternative investments.

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Justus Motor Co.has a WACC of 11.50%, and its value of operations is $25.00 million. Justus's free cash flow is expected to grow
lakkis [162]

Answer:

FCF_0=1.05

So option (b) is correct option

Explanation:

We have given value of operation PV = $25.00

WACC, that is Ke = 11.50% = 0.1150

It is grow at a constant rat of 7 % so g = 0.07

We have to find the value of FCF_0

We know that value of operation is given by

PV=\frac{FCF_0(1+g)}{Ke-g}

So 25=\frac{FCF_0(1+0.07)}{0.1150-0.07}

FCF_0=1.05

So option (b) is correct option

4 0
3 years ago
Parker Corporation has a job-order costing system and uses a predetermined overhead rate based on direct labor-hours to apply ma
AnnyKZ [126]

Answer:

Unitary cost= $62.5

Explanation:

Giving the following information:

Predetermined overhead rate based on direct labor-hours to apply manufacturing overhead to jobs. At the beginning of the year, manufacturing overhead and direct labor-hours for the year were estimated at $50,000 and 20,000 hours.

Materials costs on the job totaled $4,000 and labor costs totaled $1,500 at $5 per hour.

First, we need to determine the allocated MOH:

Estimated manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base

Estimated manufacturing overhead rate= 50000/20000= $2.5 per direct labor hour

Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base= 2.5* (1500/5)= $750

Total cost= 4000 + 1500 + 750= $6,250

Unitary cost= 6250/100= $62.5

3 0
3 years ago
For Gundy Company, units to be produced are 5,280 in quarter 1 and 6,400 in quarter 2. It takes 2.0 hours to make a finished uni
Lorico [155]

Answer:

Total cost= $350,400

Explanation:

Giving the following information:

For Gundy Company, units to be produced are 5,280 in quarter 1 and 6,400 in quarter 2. It takes 2.0 hours to make a finished unit, and the expected hourly wage rate is $15 per hour.

Quarter 1:

Direct labor cost= 5,280*2= 10,560 hours

Quarter 2:

Direct labor cost= 6,400*2= 12,800 hours

Total cost= (10,560 + 12,800)*15= $350,400

7 0
3 years ago
The following events apply to Lewis and Harper, a public accounting firm, for the Year 1 accounting period: Performed $64,500 of
charle [14.2K]

Answer:

a) I used an excel spreadsheet since there is not enough room here.

b) $69,000

c) $14,500

d) $14,000

f) $57,800

g) $59,500  

Download pdf
8 0
3 years ago
Once the outputs are identified in a work flow analysis, the next step involves: identifying the materials needed to generate th
hichkok12 [17]

Answer:

taking an inventory of the special equipment, facilities, and systems needed for production.

Explanation:

7 0
3 years ago
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