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3 years ago

A project that provides annual cash flows of $18,200 for nine years costs $88,000 today.

Business

1 answer:

Naddik [55]3 years ago

5 0

Answer:

a) the project should be accepted because its NPV is positive ($25,693.36)

b) if the required rate of return is 20%, the NPV = -$14,636.41

c) the project should be rejected because its NPV is negative

Explanation:

initial outlay year 0 -$88,000

cash flows years 1 - 9= $18,200

required rate of return = 8%

NPV = $25,693.36

required rate of return = 20%

NPV = -$14,636.41

the project's IRR = 14.63%

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3 years ago

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attashe74 [19]

Answer:

Explanation:

Before passing the journal entry we have to do the calculations which is shown below:

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3 years ago

"The Federal Reserve raises the reserve requirement from 7 percent to 8 percent. Consequently banks must set aside more money an

joja [24]

Answer: a. Inflation

Explanation:

Inflation refers to the general rise in prices of items in an economy in a certain period of time. Inflation essentially erodes the value of the domestic currency of the economy in question.

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3 years ago

Shawnee Hospital installs a new parking lot. The paving cost $30,000 and the lights to illuminate the new parking area cost $15,

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Explanation:

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3 years ago

Southeastern Bell stocks a certain switch connectorat its central warehouse for supplying field service offices. Theyearly deman

Tomtit [17]

Answer:

a. 300 units

b. $3,750

c. $3,750

d. 100 units

Explanation:

a. The computation of the economic order quantity is shown below:

= $\sqrt{\frac{2\times \text{Annual demand}\times \text{Ordering cost}}{\text{Carrying cost}}}$

= $\sqrt{\frac{2\times \text{15,000}\times \text{\$75}}{\text{\$25}}}$

= 300 units

b. For annual holding cost, first we have to find out the average inventory would equal to

= Economic order quantity ÷ 2

= 300 units ÷ 2

= 150 units

Now the Carrying cost = average inventory × carrying cost per unit

= 150 units × $25

= $3,750

c. For ordering cost, first we have to compute number of orders would be equal to

= Annual demand ÷ economic order quantity

= $15,000 ÷ 300 units

= 50 orders

Now Ordering cost = Number of orders × ordering cost per order

= 50 orders × $75

= $3,750

d. The computation of the reorder point is shown below:

= (Annual demand ÷ total number of days in a year ) × lead time

= (15,000 units ÷ 300 days) × 2 working days

= 100 units

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3 years ago