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almond37 [142]
3 years ago
15

A project will produce an operating cash flow of $136,000 a year for three years. The initial cash outlay for equipment will be

$274,000. The net aftertax salvage value of $15,000 will be received at the end of the project. The project requires $61,000 of net working capital up front that will be fully recovered. What is the net present value of the project if the required rate of return is 10 percent? corporate finance
Business
1 answer:
pashok25 [27]3 years ago
3 0

Answer:

     NPV  =$ 60,311.80

Explanation:

<em>The net present value (NPV) of a project is the present value of cash inflow  less the present value of cash outflow of the project.</em>

NPV = PV of cash inflow - PV of cash outflow

We can set out the cash flows of the project using the table below:

                                                  0                  1                   2                 3          

Operating cash flow                                136,000     136,000    136,000

Initial cost                              (274,000)

Working capital                     (61,000 )                                          61,000

Salvage value                        <u>               </u>    <u>             </u>      <u>           </u>      1<u>5000  </u>              

Net cashflow                     <u> (335,000)  136,000      136,000      212,000.</u>

PV  inflow= (136000)× (1.1)^(-1) + (136,000× (1.1)^(-2) + (112,000)× (1.1)^(-3)

       =  395,311.80

NPV =395,311.80 -335,000

       =$ 60,311.80

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goldenfox [79]

Answer:

$6.30

Explanation:

For computing the unit price, first we have to determine the difference in cost which is shown below:

= $150,000 - $120,000

= $30,000

Now the break even price would be

= Variable cost + cost difference

= $600,000 + $30,000

= $630,000

So, the unit price would be

= Break even price ÷ number of unit produced

= $630,000 ÷ 100,000 units

= $6.30

8 0
3 years ago
Last week at a​ festival, a man sold 5 times as many​ tie-dyed T-shirts as​ silk-screened shirts. He sold 234 shirts altogether.
Kipish [7]

Answer:

The tie-dyed t-shirts is 195

Explanation:

Let us assume the silk-screened shirts be X

And, the tie-dyes t-shirts would be = 5X

And, the total value equals to

silk-screened shirts + tie-dyes t-shirts

X + 5X = 234

6X = 234

X = 234 ÷ 6 = 39 shirts

So, the silk-screened shirts are 39 and, the tie-dyed t-shirts is 5 time of silk-screened shirts.

After total of the silk-screened shirts and  the tie-dyed t-shirts, the total number of shirts would be same i.e 234 t-shirts.

Therefore, the tie-dyed t-shirts is 195

6 0
3 years ago
g The Blue Utilities Company paid Sue $2,000 for the right to lay an underground electric cable across her property anytime in t
Ksenya-84 [330]

Answer:

B. Sue is not required to recognize gross income from the receipt of the funds, but she must reduce her cost basis in the land by $2,000

Explanation:

4 0
3 years ago
A 10-year $1,000 bond pays a nominal rate of 9% compounded semi-annually. If the market interest rate is 12% compounded annually
skelet666 [1.2K]

Answer:

a) actual dollar = $60

b) Constant dollar of the 15th payment = $38.710

Explanation:

Facts from the question:

The Face value of the bond = $1,000

Nominal Interest rate = 12% and it compounded annually

General inflation rate = 6%

The question: Determine the 15th interest payment on the bond.

Step 1: The coupon for the amount of semi annual payment is as follows:

Coupon= (Interest rate/ Number of compounding times in a year) x face value of the bond

= (0.12/2) x 1000

= $60 -= Actual dollar amount

Step 2: Determine the 15th payment and this will represent the middle of the 8th year or (7 1/2) year.

To calculate this=

Constant dollar amount of the 15th interest payment

= Actual dollar amount (above) / (1 + inflation rate)∧n

where n= the number of years = 7.5 years

= $60 / (1 + 0.06) ∧7.5

= $60/1.55

= $38.710

This means the constant dollar amount on that 15th payment = $38.710

3 0
3 years ago
What is process capability analysis used to do? a. Verify that the supplier's production process is capable of consistently prod
Naily [24]

Answer:

C

Explanation:

Process capability is an evaluation tool that is used to assess that a set process is able to meet up with specification.

In order to determine process capability , sample data  are taken from a particular process for further evaluation and analysis.

The tools used for process capability are

As estimate of the defects per million opportunity

One or more capability indices

An estimate of the Sigma quality level at which the process operates.

3 0
3 years ago
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