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
kipiarov [429]
3 years ago
8

The following information concerning a proposed capital budgeting project has been provided by Jochum Corporation: Click here to

view Exhibit 13B-1 to determine the appropriate discount factor(s) using tables. Investment required in equipment $ 212,000 Salvage value of equipment $ 0 Working capital requirement $ 34,000 Annual sales $ 670,000 Annual cash operating expenses $ 408,000 One-time renovation expense in year 3 $ 70,000 The expected life of the project is 4 years. The income tax rate is 30%. The after-tax discount rate is 11%. The company uses straight-line depreciation on all equipment and the annual depreciation expense would be $53,000. Assume cash flows occur at the end of the year except for the initial investments. The company takes income taxes into account in its capital budgeting.
The net present value of the project is closest to: (Round discount factor(s) to 3 decimal places, do not round intermediate calculations and round final answer to the nearest dollar amount.)

$170,803

$307,450

$186,067

$299,050
Business
1 answer:
Mekhanik [1.2K]3 years ago
3 0

Answer:

Correct option  $170,803

Explanation:

Consider the following calculation

NPV = -168000 - 24000 + ((640000 - 466000 - 42000)*(1 - .35)+42000)*PVAF(12%, 4 years) - 55000*PVF(12%, 3 year) + 24000*PVF (12%, 4 year)

= -192000 + 127800*3.03735 - 55000*.71178 + 24000*.6355

= 172.277

You might be interested in
Consider a project with free cash flows in one year of $90,000 in a weak economy or $117,000 in a strong economy, with each outc
lozanna [386]

Answer:

B) $90,000

Explanation:

The market value of the unlevered equity can be calculated using the following formula:

Expected value = Σpx

Where:

p = the probability of each outcome =50% in this case for both weak and strong economy.

x = the present value of cash flow for each outcome which is $90,000 in case of weak economy and $117,000 in case of strong economy.

Expected value= 0.50(90,000(1+15%)^-1)+0.50(117,000(1+15%)^-1)

                         =0.50(78,260.87)+0.50(101,739.13)

                         =$90,000

So the answer is B) $90,000

5 0
3 years ago
On August 1, 2018, Deeva, Inc., sold equipment and accepted a six-month, 9%, $50,000 note receivable. Deeva's year-end is Decemb
Bingel [31]

Answer:

$1,875

Explanation:

Given that,

Amount of note receivable = $50,000

Time period = 6 month

Interest rate = 9%

Interest amount:

= Principle amount × Interest rate × Time period

= $50,000 × 0.09 × (6/12)

= $2,250

Interest Accrued from 1 August to 31 December :

= (Interest amount ÷ 6 months) × 5 months

= ($2,250 ÷ 6 months) × 5 months

= $375 × 5 months

= $1,875

4 0
3 years ago
Students will write a thorough explanation of the impact of price ceilings would have on the field of medicine in the United Sta
melisa1 [442]

Answer: Price ceilings are beneficial to society, and are often necessary, in that they make sure that essential goods are financially accessible to the average person, at least in the short run. By lowering costs, price ceilings also have the beneficial effect of helping to stimulate demand, which can contribute to the health of an economy.

However, there can also be downsides to price ceilings. While they stimulate demand, price ceilings can also cause shortages. Where the ceiling is set, there is more demand than at the equilibrium price. This means that the amount of the good or service supplied is less than the quantity demanded.

For example: in agriculture, medicine, and education, many governments set maximum prices to make the needed goods or services more affordable. Producers may respond to such an economic situation by rationing supplies, decreasing production levels or lowering the quality of production, making the consumer pay extra for otherwise free elements of the good (features, options, etc.), and more.

Request: Can I please get brainliest

8 0
2 years ago
Today humans create as much information in _____ as we did from the beginning of civilization to the end of 2003. (1. 48 years (
Archy [21]

4. 48 Hours

We create at least 5 exabytes of data every 2 days. This is contributed by images, emails, social media, and all other internet content.

6 0
3 years ago
Read 2 more answers
Peachtree Company borrows $30,000 from the local bank at 7% interest. The term of the note is five years, and the annual payment
grandymaker [24]

Answer:

B

Explanation:

Here, in this question, we are asked to determine the decrease in notes payable that peachtree should record in the first year.

To determine this, we proceed as follows;

Interest payment for the first year = 30000*7% i.e 2100

Principal amount paid = Total amount paid - Interest amount

= 7317 -2100 i.e 5217

Notes payable should be reduced by 5217

4 0
3 years ago
Read 2 more answers
Other questions:
  • Power Drive Corporation designs and produces a line of golf equipment and golf apparel. Power Drive has 100,000 shares of common
    13·1 answer
  • BSU Inc. wants to purchase a new machine for $40,070, excluding $1,200 of installation costs. The old machine was bought five ye
    14·1 answer
  • 4. What is labeling theory?|
    5·1 answer
  • During the twentieth century, the real income of blue-collar workers in western societies __________ overall, although it has __
    9·1 answer
  • Sam closed the doors to her home-based consulting company only two years after opening because she was tired of working 80-hour
    7·1 answer
  • Proprietorships are by far the most common type of business, yet they account for a very small percentage of all sales compared
    7·1 answer
  • Island Trading Co., a client of your CPA firm, has requested your advice on the following problem. It has three clerical employe
    8·1 answer
  • Fifty people were asked to respond to a survey question regarding how frequently they used their credit card. The categories the
    5·1 answer
  • Potash Corporation acquired the voting stock of Safestyle Company on January 1, 2019 for $50 million. Safestyle's book value at
    10·1 answer
  • Jones, Incorporated acquires 15% of Anderson Corporation on January 1, 2020, for $105,000 when the book value of Anderson was $6
    12·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!