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a_sh-v [17]
3 years ago
8

Joanette, Inc., is considering the purchase of a machine that would cost $620,000 and would last for 10 years, at the end of whi

ch, the machine would have a salvage value of $62,000. The machine would reduce labor and other costs by $122,000 per year. Additional working capital of $8,000 would be needed immediately, all of which would be recovered at the end of 10 years. The company requires a minimum pretax return of 16% on all investment projects.
Required: Determine the net present value of the project. (Negative amount should be indicated by a minus sign. Round your intermediate calculations and final answer to the nearest whole dollar amount.)
Business
1 answer:
daser333 [38]3 years ago
3 0

Answer:

$22,484

Explanation:

The computation of net present value of the project is shown below:-

Net present value = Present value of cash inflow - Present value of cash outflow

Net present value = Other cost reduced amount × PVIFA factor at 16% for 10 years + Additional working capital × Discount factor for 10th year + Salvage value × Discount factor for 10th year -  Salvage value + Discount factor for 10th year × 1)

= $122,000 × 4.83322 + $8,000 × 0.2266 + $62,000 × 0.2266 - $62,000 + $8,000 × 1)

= $589,654 + $15,862 - $628,000

= $22,484

Therefore for computing the net present value we simply applied the above formula.

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On January 1, 2021, for $17.9 million, Seashells Company issued 8% bonds, dated January 1, 2021, with a face amount of $19.9 mil
bearhunter [10]

Answer:

Cash A/c Dr.                   $796,000

Discount A/c Dr.            $99,000

To,  Interest Revenue         895,000

Explanation:

According to the scenario, computation of the given data are as follows,

Face value = $19.9 million

Issued bond rate = 8% annually or 4% semi annual

So, Cash = $19,900,000 × 4%

= $796,000

Issued bonds value = $17.9 million

Market yield = 10% annual or 5% semi annual

So, Interest revenue = $17,900,000 × 5%

= $895,000

So, Journal entries are as follows,

Jun.30,2021 Cash A/c Dr.                   $796,000

                       Discount A/c Dr.            $99,000

                          To,  Interest Revenue         895,000

                   (Being interest revenue on June30 is recorded)

5 0
2 years ago
MC Qu. 112 A company is considering... A company is considering the purchase of new equipment for $105,000. The projected annual
Alina [70]

Answer:

Net Present Value =  $660.98  

Explanation:

<em>The Net present value (NPV) is the difference between the Present value (PV) of cash inflows and the PV of cash outflows. A positive NPV implies a good and profitable investment project and a negative figure implies the opposite. </em>

NPV of an investment:  

NPV = PV of Cash inflows - PV of cash outflow  

<em>PV of cash inflow = A× (1- (1+r)^(-n))/r </em>

A- annul cash inflow, r- 8%, n- 3

PV of cash inflow= 41,000× (1- 1.08^(-3))/0.08

=   105,660.98  

Initial cost = 105,000

NPV =  105,660.98  - 105,000

= $  660.98  

3 0
3 years ago
If you started your own company selling iphone applications, what organizational structure would you create? why?
Sladkaya [172]

I will create a combination of functional and project-based organizational structures.  I have selected the combination due to the following rationale.

  1. There are different types and categories of iPhone applications. So, the development of each application is a project. Accordingly, competent professionals will be used and they will move from one project to another project.
  2. Selling of applications as well as taking care of HR operational aspects of the business will require people with expertise in these functional areas also. So, getting good sales as well as HR retention is the top priority for the business.
  3. A combination of these two structures will create a mix of back end and front end without any departmental inclination. So, the company will succeed.

Opting for other structures will either focus on applications or sales. But, it will be ineffective as sales will not happen without applications and applications alone cannot generate good sales without proper marketing.

Besides, there can be role confusion and conflict of interest with other organizational structure such as line only or staff only structures. Even, the selection of project-only or functional-only organizational structures will create problems and employee turnover will also increase.

Learn more about business here: brainly.com/question/24448358

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8 0
2 years ago
During an exit interview, a manager discovers that the reason an employee is resigning is because of unlawful harassment from a
natka813 [3]

Answer:

See explanation below for answer.

Explanation:

The manager should embark on an investigation, in order to get to the bottom of the matter. The accusation must be treated seriously in order to make sure that the root cause of the problem is established, this will be done with the details of the harassment that the employee provides.

Also, the witnesses that the employee has mentioned must be questioned in order to establish the facts of the issue. The matter must be treated with the utmost urgency, in order to stop the issue from repeating itself, because this will affect the productivity of the affected employees if left unchecked.

7 0
3 years ago
Read 2 more answers
the Bailey Brothers want to issue 20-year , zero coupon bonds that yield 9% .what price should it charge for these bonds if the
prohojiy [21]

Answer:

the amount charged is $178.43

Explanation:

The computation of the price charged is  shown below:

As we know that

Future value = Present value × (1 + rate)^number of years

So,

Present value = Future value ÷ (1 + rate)^no of years

= $1,000 ÷ (1 + 0.09)^20

= $1,000 ÷ 1.09^20

= $178.43

Hence, the amount charged is $178.43

6 0
3 years ago
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