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9966 [12]
3 years ago
5

Moepro, Inc. is considering a fiveyear project that has an initial outlay or cost of​ $120,000. The respective future cash inflo

ws from its project for years​ 1, 2,​ 3, 4 and 5​ are: $55,000,​ $45,000, $35,000,​ $25,000, and​ $15,000. Moepro uses the internal rate of return method to evaluate projects. What is the​ project's IRR? A. The IRR is over​ 25.50%. B. The IRR is about​ 17.86%. C. The IRR is less than​ 22.50%. D. The IRR is about​ 19.16%.
Business
1 answer:
Alenkinab [10]3 years ago
8 0

Answer:

B. The IRR is about​ 17.86%.

Explanation:

The Calculation of the Project`s Internal Rate of Return (IRR) can be done using a Financial Calculator as follows ;

-$120,000       CFj

$55,000          CFj

$45,000          CFj

$35,000          CFj

$25,000          CFj

$15,000           CFj

Shift IRR          17,8557 or 17.86 % (2 decimal places)

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Beginning three months from now, you want to be able to withdraw $2,800 each quarter from your bank account to cover college exp
mr Goodwill [35]

Answer:

You will need to have $ 55,006.94

Explanation:

We need first to consider the following details according to the problem

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The multiplier is useful in determining the full-employment unemployment rate level of business inventories change in the rate o
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7 0
3 years ago
Chevron Phillips (CP) has put into place new laboratory equipment for the production of chemicals; the cost is $1,770,000 instal
inessss [21]

Answer:

Chevron Phillips (CP)

a. The gross income or annual savings is:

= $804,846.

b. The income tax for the 1st year assuming a marginal tax rate of 40% is:

= $131,600.

c. The after-tax cash flow for the 1st year is:

= $559,400.

Explanation:

a) Data and Calculations;

Cost of new laboratory equipment = $1,770,000

Borrowed capital = $849,600 ($1,770,000 * 48%)

Borrowing rate = 13.4%

Borrowing interest expense for the first year = $113,846

Depreciation = $362,000

Taxable income = $329,000

Gross savings = $X

$X = $804,846 ($113,846 + $362,000 + $329,000)

Income tax for the 1st year:

Marginal tax rate = 40%

Taxable income = $329,000

= $131,600 ($329,000 * 40%)

After-tax Cash Flows for the 1st year:

Gross savings =    $804,846

Interest expense      113,846

Depreciation          362,000

Taxable income  $329,000

Income tax              131,600

Net income          $197,400

Cash Flows:

Net income               $197,400

Depreciation             362,000

After-tax cash flow $559,400

6 0
3 years ago
Caroline Perfumes is a premium, exotic women's fragrance company. The manufacturers of Caroline Perfumes
mash [69]

Answer:

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3 years ago
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