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3 years ago

Mega Dynamics is considering a project that has the following cash flows:

Business

1 answer:

NeTakaya3 years ago

8 0

Answer:

The NPV of the project is $765.91 and option A is the correct answer.

Explanation:

To calculate the initial outlay or cost of the project, we will use the payback period of the project. The payback period is the time taken by the project's cash flows to cover up the initial cost.

A payback period of 2.5 years means that the initial cost was,

Initial cost = 2000 + 3000 + 3000 * 0.5

Initial cost = $6500

To calculate the NPV of the project, we use the following formula,

NPV = CF1 / (1+r) + CF2 / (1+r)^2 + ... + CFn / (1+r)^n - Initial cost

Where,

CF1, CF2 , ... represents the cash flow in year 1, cash flow in year 2 and so on.
r is the cost of capital

NPV = 2000 / (1+0.12) + 3000 / (1+0.12)^2 + 3000 / (1+0.12)^3 +

1500 / (1+0.12)^4 - 6500

NPV = $765.9137794 rounded off to $765.91

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Maya, who lives in California, just purchased her first home at a Trustee’s foreclosure sale. She was given a deed at the sale.

nevsk [136]

Answer: Trustee's Deed

Explanation: A trust deed in immovable property in the Americas refers to a legal instrument used to develop a significant stake in the immovable property under which legal title in capital assets is diverted to a trustee holding that as security for such a loan between a creditor and perhaps a lender.

From the perspective of the investor, a document of trust has a vital benefit as compared to a mortgage. If a borrower fails to pay on the loan, on part of the lender, the trustee has the right to repossess the land. Thus, from the above we can conclude that Maya would have been given a trustee's deed.

7 0

3 years ago

Miller Corporation has a premium bond making semiannual payments. The bond has a coupon rate of 8 percent, a YTM of 6 percent, a

denpristay [2]

Answer:

Company Price of Bond

Miller Corporation $1,218.32

Modigliani Company $810.92

Explanation:

<em>The value of the bond is the present value (PV) of the future cash receipts expected from the bond. The value is equal to present values of interest payment plus the redemption value (RV). </em>

Value of Bond = PV of interest + PV of RV

The value of bond Miller Corporation can be worked out as follows:

Step 1

PV of interest payments

Semi annul interest payment = 8%× 1000× 1/2 =40

Semi-annual yield = 6%/2 = 3% per six months

Total period to maturity (in months) = (2 × 18) = 36 periods

PV of interest =

40× (1- (1+0.03^(-36)/0.03)= 873.29

Step 2

PV of Redemption Value

= 1,000 × (1.03)^(-36) =345.03

Step 3:

Price of bond

= 873.29 + 345.03= $1,218.32

Modigliani Company

Step 1

PV of interest payments

Semi annul interest payment = 6%× 1000× 1/2 =30

Semi-annual yield = 8%/2 = 4% per six months

Total period to maturity (in months) = (2 × 18) = 36 periods

PV of interest =

30× (1- (1+0.04^(-36)/0.04)= 567.25

Step 2

PV of Redemption Value

= 1,000 × (1.03)^(-36) =243.66

Step 3:

Price of bond

= 567.2484586 + 243.66 = $810.92

Price of bond = $810.92

5 0

3 years ago

On January 1, the first day of the fiscal year, a company issues a $5,000,000, 6%, 10-year bond that pays semiannual interest of

irga5000 [103]

Answer:

Explanation:

The journal entries are shown below:

On Jan 1 - Cash A/c Dr $5,000,000

To Bonds Payable A/c $5,000,000,

(Being bond is issued)

On June 30 - Interest expense A/c Dr $150,000

To Cash A/c $150,000

(Being interest paid for cash)

On December 31, Bonds Payable A/c Dr $5,000,000

To Cash A/c $5,000,000

(Being payment of principal is recorded on the maturity date)

8 0

4 years ago

In order to make your work into a brilliant project, what is the type of thinking that you should focus on improving ? (Choose t

stellarik [79]

Answer:

a) Vertical thinking

Explanation:

Vertical thinking is a type of approach to problems that usually involves one being selective, analytical, and sequential,consists of using more of a conscious approach via rational assessment in order to take in information or make decisions.

5 0

4 years ago

____ describes the average level of ability, experience, personality, or any other factor on a team. A.Team diversity B.Group sy

Masja [62]

The answer would be C .Team Level

Here are some factors that will positively influence team level :
- More Experience
- More Experts in their field
- A hardworking and Positive personalities

Teams with higher level will be more likely to have more capabilities to face wide variety of difficult problems

8 0

4 years ago