Answer:
NPV = $49,234.16
Explanation:
The Net present value (NPV) is the difference between the Present value (PV) of cash inflows and the PV of cash outflows. A positive NPV implies a good investment project and a negative figure implies the opposite.
NPV of an investment:
NPV = PV of Cash inflows - PV of cash outflow
<em>Present value of cash inflows:</em>
A × 1-(1+r)^(-n)/r
A- annual cash inflow-20,000 r-rate of return-10%, n-number of years-6
PV of cash flow = 20,000 × (1.1)^(-6)/0.1 = 87,105.21399
<em>PV of scrap value</em>
F× (1+r)^(-n)
F- scrap value
= 2,000× 1.1^(-6)= 1,128.94
Initial cost = $39,000
NPV = 87,105.21399 + 1,128.94 -39,000= $49,234.16
NPV = $49,234.16
Explanation:
June 1
Accounts Receivable 50,000
Sales Revenue 50,000
June 12
Cash 48,500*
Sales Discounts 1,500
Accounts Receivable 50,000
= $50,000 - ($50,000 X 0.03)
= $48,500
Answer:
the first one by the website
Explanation:
the websites name is the eustions name
Answer:
$8.30 million approx
Explanation:
The computation of the present value of the interest tax shield is shown below:
Year 0 1 2 3 4
Outstanding debt $100 million $75 million $50 million $25 million $0
Less: Interest $10 million $7.5 million $5 million $2.5 million
Less: Tax shield at 40% $4 million $3 million $2 million $1 million of interest
Discount factor at 10% 0.90909 0.82645 0.75131 0.68301
Present value $3.63 million $2.48 million $1.50 million $0.683 million
So, the present value is $8.30 million approx
The discount factor should be computed below
= 1 ÷ (1 + rate) ^ years
