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Alja [10]
3 years ago
14

Haroldsen Corporation is considering a capital budgeting project that would require an initial investment of $350,000. The inves

tment would generate annual cash inflows of $133,000 for the life of the project, which is 4 years. At the end of the project, equipment that had been used in the project could be sold for $32,000. The company’s discount rate is 14%. The net present value of the project is closest to: Click here to view Exhibit 7B-1 and Exhibit 7B-2, to determine the appropriate discount factor(s) using the tables provided. Multiple Choice $214,000 $37,429 $56,373 $406,373
Business
2 answers:
meriva3 years ago
7 0

Answer:

The answer is: $56,373.

Explanation:

The project net present value is equals to the sum of:

+ Initial cash outflow: $(350,000);

+ Present value of the annuity lasting for 4 years, with annual cash inflow of 133,000, discounted at required return rate of 14%; calculated as: 133,000/14% * [ 1 - 1.14^(-4) ] = $387,524;

+ Present value of equipment recovery at the end of year 4: 32,000/1.14^4 = $18,946.

=> Project net present value = -350,000 + 387,524 + 18,946 = $56,470.

So, its net present value is closest to $56,373.

rjkz [21]3 years ago
3 0

Answer:

The correct answer is option C.

Explanation:

Giving the following information:

The initial investment of $350,000. The investment would generate annual cash inflows of $133,000 for the life of the project, which is 4 years. At the end of the project, equipment that had been used in the project could be sold for $32,000. The company’s discount rate is 14%.

We need to use the following formula:

NPV= -Io + [Cf/(1+i)^n]

Io= 350,000

1= 133,000/1.14

2= 133,000/1.14^2

3= 133,000/1.14^3

4= 165,000/1.14^4

NPV= $56,470.31

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If a company would still have a cash flow item even if they rejected potential new Project A, should this particular cash flow i
FrozenT [24]

Answer: No

Explanation:

When computing a project analysis for a project, only relevant cash flow should be included in the Project's cash flow analysis. Relevant cash-flow are those that will only occur if the project was embarked on.

If the cash flow in question is still going to occur even if the project wasn't initiated as is the case with Project A, it is not a relevant cash-flow and should not be included in the cash-flow analysis.

8 0
3 years ago
Sales $ 2,000,000 100 % $ 500,000 100 % $ 2,500,000 100 % Variable expenses 800,000 40 % 250,000 50 % 1,050,000 42 % Contributio
Sonja [21]

Answer:

$1.5 million

Explanation:

The computation of break even sales in dollars is shown below:

= (Fixed expenses) ÷ (profit volume ratio)

where,  

Contribution margin  = Sales  - Variable expense

= $2,500,000 - 1,050,000

= $1,450,000

And, Profit volume ratio = (Contribution) ÷ (sales) × 100

So, the Profit volume ratio = ($1,450,000) ÷ ( $2,500,000) × 100 = 58%

And, the fixed expenses is $870,000  

Now put these values to the above formula  

So, the value would equal to  

= ($870,000) ÷ (58%)  

= $1.5 million

3 0
3 years ago
The chapter's "Continuity and Change" section mentions religious societies that advocated a return to strict and uncompromising
pogonyaev

Answer:

The Jesuits.

Explanation:

The Jesuits are a member of the Society of Jesus, a Roman Catholic order of priests founded by St. Ignatius Loyola, St. Francis Xavier, among others in 1534, to do missionary work. The order was opposed the Reformation. It has retained an important influence in Catholic thought and education, even though it has suffered periodic persecution.

The basic continuity in any human endeavor is found in the goals that it pursues, and in how we cope with the intentions of pursuing them. A society or a profession is recognizably one and the same throughout a long history because its pursuit of a goal is always the same. These goals may be looked at from two points of view, abstract values or as concrete embodiments of those values. The kind of change that we are experiencing today and the sort of adaptation that we are making seem to fall largely into the most profound kind of adaptation, both in the Church and in the Society of Jesus.

3 0
3 years ago
Michael is the new department head at his company. he expects everyone to agree with his restructuring plan for the department,
Aleksandr [31]

Michael is creating an atmosphere in which his department members are so afraid of conflict and so eager for harmony that their decision making becomes uncritical, irrational, and dysfunctional. This psychological phenomenon is known as groupthink.

5 0
3 years ago
"Paco is considering the purchase of a used car. Paco currently has excess monthly cash flow of $490 available for vehicle payme
kobusy [5.1K]

Answer:

Paco will have 335 dollars available for the car-loan

Explanation:

fromthe $490 cash flow

we should subtract the cash cost as once we obtain it through a loan we will have to handle with them as well:

 490

 - 60 gas

  - 70 insurance

   - 15 maintenance

<u>    - 10 repairs    </u>

 335  net monthly savings after the purchase of the car.

7 0
3 years ago
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