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UkoKoshka [18]
3 years ago
10

Year Cash Flow 0 –$ 8,300 1 2,100 2 3,000 3 2,300 4 1,700 What is the payback period for the set of cash flows given above? (Do

not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Business
1 answer:
Readme [11.4K]3 years ago
7 0

Answer:

3.53 years

Explanation:

The computation of the payback period is shown below:

In year 0 = $8,300

In year 1 = $2,100

In year 2 = $3,000

In year 3 = $2,300

In year 4 = $1,700

If we sum the first 3 year cash inflows than it would be $7,400

Now we subtract the $7,400 from the $8,300 , so the amount is  $900 as if we added the fourth year cash inflow so the total amount exceed to the initial investment. So, we deduct it

And, the next year cash inflow is $1,700

So, the payback period equal to

= 3 years + $900 ÷ $1,700

= 3.53 years

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The total market value of a municipality is $25,000,000 and the total assessed value of a municipality is $11,250,000. What is t
gulaghasi [49]

Answer: The equalization rate for the municipality is 45%.

Explanation:

Given that,

Total market value of a municipality = $25,000,000

Total assessed value of a municipality = $11,250,000

Therefore,

Equalization rate for the municipality =\frac{Assesed\ value}{market\ value}

= \frac{11250000}{25000000}

= 0.45

= 45%

Hence, the equalization rate for the municipality is 45%.

6 0
3 years ago
Hibiscus Co has a debt-equity ratio of 0.80. The firm is analyzing a new project which requires an initial cash outlay of $300,0
morpeh [17]

Answer:

$321,600

Explanation:

debt equity ratio = debt / equity

since the debt to equity is 0.8, that means that for every $ invested from equity, $0.80 will be borrowed. If the new project requires an initial cash outlay of $300,000:

  • then $300,000 / $1.80 = $166,667 will be new equity
  • and $133,333 will be new debt

total cost of initial outlay including flotation costs = ($166,667 x 1.09) + ($133,333 x 1.0495) = $181,667 +  $139,933 = $321,600

flotation costs include all the costs associated with issuing new stocks or taking new debt.

8 0
3 years ago
Metallica Bearings, Inc., is a young start-up company. No dividends will be paid on the stock over the next nine years because t
Montano1993 [528]

Answer:

$106.02

Explanation:

Div₀ - Div₉ = 0

Div₁₀ = $10 and then will grow by 6% forever

we must first determine the terminal value for year 9 using the dividend growth model:

P₉ = Div₁₀ / (Re - g) = $10 / (10% - 6%) = $10 / 4% = $250

now we shall discount this to present day value:

P₀ = $250 / (1 + 10%)⁹ = $250 / 2.3579 = $106.02

3 0
3 years ago
g If the demand for a product increases proportionately faster than the increase in consumers' incomes, then the income elastici
wlad13 [49]

Answer:

greater than zero.

Explanation:

Income elasticity of demand measures the responsiveness of quantity demanded to changes in income

Income elasticity of demand = percentage change in quantity demanded / percentage change in income.

I hope my answer helps you

5 0
3 years ago
You have decided to renovate your restaurant. You estimate that renovations will result in an extra $125,000 in sales per
lozanna [386]

Answer:

13.33 years

Explanation:

The time it takes for an investment to repay its initial investment if the payback period. For an investment project with regular cash flows, the formula for calculating the payback period is ;

Payback period =Initial investment/cash flows

In this case: Initial investment is $2,000,000.00

cash flow= extras sales per year plus saving on utilities

  = $125,000 + $25,000= $ 150,000

payback period = $ 2,000,000/ $ 150,000

      =13.33 years

5 0
3 years ago
Read 2 more answers
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