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Investment methods, such as net present value and internal rate of return, ________

Likurg_2 [28]

Investment methods, such as net present value and internal rate of return, and Net present value (NPV).

Net present value is the distinction between the prevailing fee of cash inflows and the prevailing fee of coin outflows over a time period. NPV is utilized in capital budgeting and funding making plans to analyze the profitability of a projected investment or task.

Net present value is the present fee of the coins flows at the specified rate of going back of your challenge in comparison for your preliminary funding,” says Knight. In sensible terms, it is a technique of calculating your go-back on funding, or ROI, for a venture or expenditure.

The net present price or internet gift really worth applies to a chain of coin flows going on at different instances. The existing value of a cash drift depends on the c programming language of time among now and the coins flow. It also depends on the bargain rate. NPV accounts for the time value of cash.

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7 0

1 year ago

Cushenberry Corporation had the following transactions.1. Sold land (cost $11,360) for $14,200.2. Issued common stock at par for

miss Akunina [59]

Explanation:

The journal entries are shown below:

1. Cash A/c Dr $14,200

To Gain on land A/c $2,840

To Land $11,360

(Being the land is sold)

2. Cash A/c Dr $18,900

To Common stock A/c $18,900

(Being the common stock is issued for cash)

3. Depreciation Expense A/c Dr $15,730

To Accumulated Depreciation - Buildings A/c $15,730

(Being depreciation expense is recorded)

4. Salaries expense A/c Dr $8,080

To Cash A/c $8,080

(Being the salaries expense is paid for cash)

5. Equipment A/c Dr $8,420

To Common stock A/c $1,170

To Additional paid-in capital in excess of par value A/c $7,250

(Being the equipment is purchased)

6. Cash A/c Dr $1,236

Accumulated depreciation - Equipment A/c Dr $7,210

Loss on sale of equipment A/c Dr $1,854

To Equipment A/c $10,300

(Being the equipment is sold)

7 0

3 years ago

The board of directors of Capstone Inc. declared a $0.90 per share cash dividend on its $2 par common stock. On the date of decl

Bas_tet [7]

Answer:

A. Dividends 11,700 Dividends Payable 11,700

Explanation:

The journal entry to record the dividend declared is shown below:

Dividend A/c Dr $11,700

To Dividend payable $11,700

(Being the dividend is declared)

The computation is shown below:

= (Number of shares issued - treasury stock) × cash dividend per share

= (20,000 shares - 7,000 shares) × $0.90

= 13,000 shares × $0.90

= $11,700

6 0

3 years ago

What is the present value on January 1, 2016, of $30,000 due on January 1, 2021, and discounted at 12% compounded annually?What

ale4655 [162]

Answer:

1. Future Value = 30,000

Rate = 0.12

Annual period, NPER = 5

Present value, PV = PV(0.12, 5,0,-30,000 ,0)

Present value, PV = $17,022.81

2. Future value = 8,000

Quarterly rate = 16%/4 = 4%

Number of quarters, Nper = 4.5*4 = 18

Present value, PV = PV (4% , 18, 0, -8,000 , 0)

Present value, PV = $3,949.02

3. Future value = 8,000

Annual rate = 0.1

Annual period, Nper = 5

Present value, PV = PV(0.1, 5, 0, -8000, 0)

Present value, PV = $4,967.37

Present value Discount = 8,000 - 4,967.37

Present value Discount = $3,032.63

5 0

3 years ago

Read 2 more answers

Fischer Company uses 12,000 units of a part in its production process. The costs to make a part are: direct material, $15; direc

Trava [24]

Answer:

Difference= $60,000 in favor of buying

Explanation:

Giving the following information:

Number of units= 12,000

Make in-house:

Direct material, $15

direct labor, $27

variable overhead, $15

applied fixed overhead, $32

Buy:

Buying price= $60

If Fischer buys the part, 75 percent of the applied fixed overhead would continue.

First, we will calculate the avoidable fixed overhead per unit:

Avoidable fixed overhead= 32*0.25= $8

Now, the total differential cost of making in-house:

Total cost of production= 12,000*(15 + 27 + 15 + 8)

Total cost of production= 12,000*65

Total cost of production= $780,000

Total cost of buying= 60*12,000= $720,000

Difference= $60,000 in favor of buying

4 0

2 years ago