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STALIN [3.7K]
3 years ago
15

Assume again that the cost of capital is 7 percent and the effective tax rate is 40 percent. How would the payback, internal rat

e of return, and net present value change if the capital cost for the project was $750,000 and the cost savings and increased revenue were decreased by 25 percent each year?
Business
1 answer:
vfiekz [6]3 years ago
4 0

Answer:

If the effective tax rate increases then the net savings coming from investments will get lowered as a result the investment will have higher payback period (The increase in effective tax rate would lower demand of the product which means there is decline in net saving arising from the sale of the product). Likewise this decrease in annual net savings will also decrease the internal rate of return which shows that their are increased chances of project rejections. The NPV method is based on cash flows and relevant costing just like IRR and payback method but the only difference is that it assumes that the cash earned would be reinvested at cost of capital. The NPV will also decrease due to increased effective tax rate.

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Accruals recorded in the Salaries and Wages Expense and Salaries and Wages Payable columns of the balance sheet and income state
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Answer:

Incurred but unpaid

Explanation:

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Personal Finance<br> What is a motive?
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The short-run aggregate supply curve shows: a. Changes in output in an economy as the price level changes, holding all other det
Neporo4naja [7]
<h3>The short-run aggregate supply curve shows the relationship between the price level and aggregate expenditure </h3>

Explanation:

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8 0
3 years ago
You are considering two investment alternatives. The first is a stock that pays quarterly dividends of ​$0.38 per share and is t
djyliett [7]

Answer:

The​ 1-year HPR for the first stock is 16.18%

Explanation:

The computation is shown below:

For investment 1 -

The formula is shown below:

= (Income × quarter ) +Value at the end  - Value at the beginning  ÷ (Value at the beginning) × 100

= {($0.38 × 2) + $29.25 - $25.83} ÷ ($25.83) × 100

= ($0.76 +  $29.25 - $25.83) ÷ ($25.83)  × 100

= ($4.18 ÷ $25.83)  × 100

= 16.18%

3 0
3 years ago
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