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
ycow [4]
3 years ago
8

Emann Systems is considering a project that has a cash flow as: (1,000), 450, 450, 450 for the years 0, 1, 2, 3 respectively. If

WACC: 10 %, What is the project's MIRR?
Business
1 answer:
Jet001 [13]3 years ago
4 0

Answer:

the project's MIRR is 14,20%.

Explanation:

The First Step is to Calculate the Terminal Value at end of year 3.  

Terminal Value (FV) = Sum of (PV x (1 + r) ^ 3 - n)

                                 = 450 x (1.10) ^ 2 + 450 x (1.10) ^ 1 + 450 x (1.10) ^ 0

                                 = 544.50 + 495.00 + 450.00

                                 = 1,489.50

The Next Step is to Calculate the MIRR using a Financial Calculator :

(1,000)         CFj

0          CFj

0          CFj

1,489.50  CFj

Shift IRR/Yr 14,2037 %

Therefore, the MIRR is 14,20%.

You might be interested in
American Hat has $1,000 face value bonds outstanding with a market price of $1,150. The bonds pay interest semiannually, mature
Aneli [31]

Answer:

Current Yield of bond is 3.53%

Explanation:

Current yield is the ratio of coupon payment of a bond to its current market price.

Formula for Current yield is as follow

Current Yield = Annual Coupon payment / Current market price

First we need to calculate the coupon payment by using following formula

YTM = [ C + ( F - P ) / n ] / [ ( F + P ) / 2 ]

5.8%/2 = [ C + ( $1,000 - $1,150 ) / 16 ] / [ ( $1,000 + $1,150 ) / 2 ]

2.9% = [ C + ( $1,000 - $1,150 ) / 16 ] / [ ( $1,000 + $1,150 ) / 2 ]

2.9% = [ C - $9.375 ] / $1,075

1,075 x 2.9% = C - $9.375

31.175 = C - 9.375

C = 31.175 + 9.375 = $40.55 annually

Current Yield = Annual Coupon payment / Current market price

Current Yield = $40.55 / $1,150 = 0.0353 = 3.53%

7 0
3 years ago
Read 2 more answers
An author just signed a lucrative contract with a publisher that offers to pay her the amount of $500 at the end of year 9 when
solong [7]

Answer:

Ans. The annuity that will be equivalent to the publisher´s advance would be $26.40 per year, for 9 years at 7% interest rate.

Explanation:

Hi, first, let´s bring that $500 to be paid in 9 years to present value, we need to use the following formula.

PresentValue=\frac{FutureValue}{(1+r)^{n} }

Where: r is our discount rate (7%) and n the periods from now when she will receive that $500 amount. This should look like this.

PresentValue=\frac{500}{(1+0.07)^{9} } =271.97

Ok, so the equivalent amount of money today of those $500 in nine years is $271.97, but the author wants $100 today so the remaining amount has to be used to find the equal annual payments to be made in order to be equivalent to re remaining balance ($171.97). We now need to use the following equation.

Present Value=\frac{A((1+r)^{n}-1 )}{r(1+r)^{n} }

And we solve for "A" like this

171.97=\frac{A((1+0.07)^{9}-1 )}{0.07(1+0.07)^{9} }

171.97=\frac{A(0.838459212 )}{0.128692145}

171.97=A(6.515232249)

A=\frac{171.97}{6.515232249} = 26.40

Therefore, the equivalent amount of money of $500 in 9 years is $100 today and $26.40 every year, at the end of the year, for nine years.

Best of luck.

4 0
3 years ago
Zigzag Manufacturing has just hired a new controller, Leslie Demorest. During her first week on the job, Leslie was asked to est
Marizza181 [45]

Answer:

Zigzag Manufacturing

The Effectiveness of Leslie Demorest's Budgeting Strategy

The strategy of adjusting the previous year's operating expenses with inflation is not an effective way of strategic budget planning.  Leslie's budgeting strategy does not take advantage of forecasts of unexpectedly good performance and fails to provide any reaction that can occur when there are downturns in cash flow.

An effective budgeting strategy should provide the standard for the effective use of financial resources of Zigzag Manufacturing in its business operations.  There are no clear goals to be achieved and an evaluation of how the goals will be achieved through the budget implementation.

Explanation:

An effective budget should be able to forecast and track revenues and expenses, which are received and incurred in pursuit of business goals and projections.  An effective budget ensures that those who implement the projections contained in the budget remain motivated.  The idea of adjusting previous expenses with inflation is not an effective budgeting strategy.

3 0
3 years ago
A company currently sells products in the United States and is considering expanding to China or Vietnam. Expanding won't impact
mariarad [96]

Answer: Company should not expand to either.

Explanation:

Find the expected values of expanding to either country and pick the country with the highest expected value:

China:

= ∑(Probability of outcome * Outcome)

= (20% * 2,000,000) + (30% * 1,000,000) + (50% * -2,000,000)

= -$300,000

Vietnam:

= (70% * 1,000,000) + (30% * -2,500,000)

= -$50,000

<em>Both countries result in an expected loss so company should not expand to either of them. </em>

3 0
3 years ago
Which of the following is an example of a hard skill?Working well as part of a team Knowing how to prepare financial statements
Aleksandr [31]

Answer:

B. Knowing how to prepare financial statements

Explanation:

Hard skills are teachable and measurable abilities in an office writing, reading, or the ability to use computer programs are hard skills

6 0
3 years ago
Other questions:
  • When originally purchased, a vehicle costing $23,040 had an estimated useful life of 8 years and an estimated salvage value of $
    10·1 answer
  • The employees of eco engineering inc. share company-related resources among multiple computers without requiring a central netwo
    12·1 answer
  • In the long run, if the firm decides to keep output at its initial level, what will it likely do? stay on but decrease to the po
    11·1 answer
  • The Volt Battery Company has forecast its sales in units as follows: January 2,900 February 2,750 March 2,700 April 3,200 May 3,
    14·1 answer
  • What is your view of abortion?
    5·1 answer
  • Harry and Sally formed the Evergreen partnership by contributing the following assets in exchange for a 50 percent capital and p
    11·1 answer
  • George invested $1,000 in large U.S. stocks at the beginning of 2012. This investment earned 16.35 percent in 2012, 31.50 percen
    15·1 answer
  • At the beginning of the year, a company predicts total overhead costs of $810,900. The company applies overhead using machine ho
    8·1 answer
  • This is where labor and other factors of production are sold in the circular flow model of income in economic theory *it’s for e
    14·1 answer
  • Anybody do FLVS? If so do you think its boring that you don't see anybody and you can't interact. :|
    8·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!