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vladimir2022 [97]
3 years ago
5

Mass company is investing in a giant crane. it is expected to cost $6.0 million in initial investment, and it is expected to gen

erate an end-of-year cash flow of $3.0 million each year for three years. at the end of the fourth year, there will be a $1.0 million disposal cost. calculate the irr for the project if the cost of capital is 12%.
Business
1 answer:
alexdok [17]3 years ago
3 0
17.8% is the irr for the project if the cost of capital is 12%. IRR <span>is the interest rate at which the net present value (NPV) of all the cash flows (both positive and negative) from a project or investment equal tgo zero.</span> IRR<span> calculations rely on the same </span>formula<span> as NPV does. To </span>calculate IRR <span>using the </span>formula<span>, one would set NPV equal to zero and </span>solve<span> for the discount rate (r), which is the </span>IRR.  <span>Multiply the net cash flow for each period by its discount factor to obtain its present value. Sum the present values of each cash flow to </span>calculate<span> the </span>NPV. Find the IRR<span>, the discount rate, that makes the </span>NPV<span> zero.</span>
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Lera25 [3.4K]

Answer

The answer and procedures of the exercise are attached in the following archives.

Step-by-step explanation:

You will find the procedures, formulas or necessary explanations in the archive attached below. If you have any question ask and I will aclare your doubts kindly.  

Download xlsx
3 0
3 years ago
When manufacturing overhead costs are assigned to production in a process cost system, it means that
Colt1911 [192]

Answer:

<em>When manufacturing overhead costs are assigned to production in a process cost system, it means that the business uses absorption costing system.</em>

Explanation:

When manufacturing overhead costs are assigned to production in a process cost system, it means that the business uses absorption costing system.

Absorption costing system is that where units of products and inventories are valued using full cost. Full cost implies that each product would be charged for an amount of the<em> fixed production overhead </em>in addition to the variable cost.

The fixed overhead is charged using a predetermined overhead absorption rate.

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3 years ago
What explanation might an economist provide why some people overeat when such behavior can lead to health​ consequences? Some pe
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Answer:

Utility overvalued

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3 years ago
Bruin Company reports current E&amp;P of $200,000 in 20X3 and accumulated E&amp;P at the beginning of the year of $100,000. Brui
Kipish [7]

Answer:

B. $300,000

Explanation:

For computing the dividend, the computation is shown below:

= Current E&P + accumulated E&P at the beginning of the year

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3 years ago
Using the Indirect Method to create the Statement of Cash Flows, which of the following options are correct in describing what m
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Answer:

a) A gain is subtracted from net income.

d) An increase in operating current assets is subtracted from net income.

e) A decrease in operating current liabilities is subtracted from net income.

Explanation:

Operating activities: It involves those transactions that affect the after-net income working capital. It would subtract the rise in current assets and a decrease in current liabilities while add a decrease in current assets and an increase in current liabilities.  

It would modify those changes in working capital. For addition, the depreciation costs are added to the net income and the loss on the sale of assets is applied, while the gain on the sale of assets is excluded

So, the following options are used-

a) A gain is subtracted from net income.

d) An increase in operating current assets is subtracted from net income.

e) A decrease in operating current liabilities is subtracted from net income.

8 0
3 years ago
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