1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
olasank [31]
3 years ago
10

Merrill Corp. has the following information available about a potential capital investment: Initial investment $ 1,700,000 Annua

l net income $ 190,000 Expected life 8 years Salvage value $ 250,000 Merrill’s cost of capital 10 % Assume straight line depreciation method is used. Required: 1. Calculate the project’s net present value. 2. Without making any calculations, determine whether the internal rate of return (IRR) is more or less than 10 percent. 3. Calculate the net present value using a 15 percent discount rate. 4. Without making any calculations, determine whether the internal rate of return (IRR) is more or less than 15 percent.
Business
1 answer:
Jobisdone [24]3 years ago
6 0

Answer:

1./

INITIAL INVESTMENT

= $1600000

ANNUAL NET CASH FLOW

= NET INCOME + DEPERICATION

= $250000 + [($1600000 - $350000) / 8]

= $250000 + $156250

= $406250

SALVAGE VALUE

= $350000

NPV

= -$1600000 + $406250 * PVIFA 10%, 8 PERIODS + $350000 * PVIF 10% *PERIOD

= -$1600000 + $406250 * 5.3349 + $350000 * 0.4665

= -$1600000 + 2167303.13 + $163275

= $730578.13

2./

AS THE NPV IS GREATER THAN 0 OR POSITIVE THE IRR IS GREATER THAN 10%

3./

INITIAL INVESTMENT

= $1600000

ANNUAL NET CASH FLOW

= NET INCOME + DEPERICATION

= $250000 + [($1600000 - $350000) / 8]

= $250000 + $156250

= $406250

SALVAGE VALUE

= $350000

NPV

= -$1600000 + $406250 * PVIFA 20%, 8 PERIODS + $350000 * PVIF 20% *PERIOD

= -$1600000 + $406250 * 3.8372 + $350000 * 0.2326

= -$1600000 + $1558862.5 + $81410

= $40272.5

4./

AS THE NPV IS GREATER THAN 0 OR POSITIVE THE IRR IS GREATER THAN 20%

Explanation:

You might be interested in
In the private sector, only agricultural workers, domestic workers, and _____ are exempt from taft-hartley or railway labor act
LUCKY_DIMON [66]
<span>The answer is "supervisors and independent contractors." These workers are exempt from the labor law protections because they have more leverage in deciding their working conditions, or in the case of domestic workers, have an occupation that by its nature requires certain hours.</span>
5 0
3 years ago
Read 2 more answers
it is often said that managers often make decisions without all the necessary information. Why is this so?
Elena L [17]

Managers usually make decisions without all the necessary information because they are not aware of the alternatives that they've and aren't able to predict the consequences of the decision.

  • In management, decision-making is vital. Decision-making is important in the planning process. During planning, the manager decides on the goals that an organization wants to pursue.

  • In certain cases, a manager may not have all the required information regarding a particular issue but despite that still makes such decisions. Also, there are some decisions that require urgent attention, and delaying such decisions can further complicate such issues.

Read related link on:

brainly.com/question/9075718

8 0
3 years ago
Describe all business activities from the time a customer arrives to the time that customer departs your favorite fast-food rest
3241004551 [841]

Answer: The answer is provided below

Explanation:

1. The following are the business activities that takes place from the moment a customer arrives to the moment the customer leaves my favorite fast-food restaurant.

The first thing is welcoming the customer to the restaurant, after the customer sits down, a waiter for to the customer and gives the menu to the customer for him or her to choose the kind of meal he or she wants. After the customer has chosen the meal, the order is received and then filled. The food is then brought to the customer with an accompanying bill for the customer to make payment. Lastly, when the customer has finished eating, the waiter and security at the gate thanks him or her on their way out.

2. The costs are:

i. The salary of the staffs at the restaurant. This include the waiter, cook, security, manager, cleaners etc.

ii. Utility bills such as electricity and water.

iii. Rent of the building.

iv. Cost of the ingredients for the meals.

3. Fixed cost is a cost which doesn't vary with the production output while variable costs are the costs that varies with output. For the (ii) above, the fixed costs are: salary of staffs, rent, utility bills because these costs doesn't usually change while the variable cost is the cost of the ingredients for the meals.

7 0
4 years ago
A research study showed that adolescents who watched more than 4 hours of TV per day were more than five times as likely to star
Bogdan [553]

Answer:

peer pressure

Explanation:

when your friend is convincing u in doing some thing wrong

3 0
3 years ago
A company accepts a customer's order on November 30 and immediately delivers the goods to the customer. On December 1, the compa
Step2247 [10]

Answer:

A) November 30

Explanation:

Based on accrual principle of accounting, revenue is recognized when it is earned and not necessarily when cash is received.

Revenue is said to be earned when the obligation of the delivery of service or goods sold has been met.

As such, where a company accepts a customer's order on November 30 and immediately delivers the goods to the customer, revenue is said to be earned (and will be recognized ) on the day of delivery.

6 0
3 years ago
Other questions:
  • THIS IS A 2 ANSWER QUESTION Throughout your job search, you’ll find that
    6·2 answers
  • Some economists suggest that the fed should follow an explicit rule or formula for monetary policy. for​ example, the rule would
    15·1 answer
  • Schlictor company sells cordless razors for $50. Variable costs are 40% of sales and total fixed costs are $40,000. What is the
    14·1 answer
  • Wiskurv Inc. is a large electronics supplier that does not rely exclusively on traditional financial measures for organizational
    13·1 answer
  • Which of the terms below is often used in addition to the words "writing" and "record", and thus recognizes that UCC contracts a
    12·1 answer
  • Process X has fixed costs of $10,000 and variable costs of $2.40 per unit. Process Y has fixed costs of $9,000 and variable cost
    6·1 answer
  • Europa Company manufactures only one product. Presented below is direct labor information for November.Standard direct labor hou
    11·1 answer
  • Which industry is an example of monopolistic competition
    11·1 answer
  • On October 1, 2020 Waterway Industries issued 6%, 10-year bonds with a face value of $8150000 at 104. Interest is paid on Octobe
    15·1 answer
  • Dont answer please no
    15·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!