A letter representing a specific number that never changes is called a

Quad Enterprises is considering a new three-year expansion project that requires an initial fixed asset investment of $2.18 mill

andre [41]

Answer:

See the explanation below

Explanation:

1. If the tax rate is 24 percent, what is the project’s Year 0 net cash flow?

A. Year 1.

B. Year 2.

C. Year 3

Year 0 cash flow = - initial fixed asset investment - initial investment in net working capital = $2,180,000 + $290,000 = $2,470,000

Annual depreciation expenses = 2,470,000 / 3 = $823,333

A. Year 1 cash flow = (Sales - costs - depreciation)(1 - tax) + depreciation = (1,730,000 - 636,000 - 823,333)(1 - 0.24) + 823,333 = $1,029,039.92

B. Year 2 cash flow = $1,029,039.92

C. Non operating year 3 cash flow = Market value + Net working capital - tax(market value - book value) = 240,000 + 290,000 - 0.24(240,000 - 0) = $472,400

Year 3 cash flow = $472,400 + $1,029,039.92 = $1,501,439.92

2. If the required return is 12 percent, what is the project's NPV?

NPV = -2,470,000 + (1,029,039.92 / (1 + 0.12)^1 + 1,029,039.92 / (1 + 0.12)^2 + 1,501,439.92 / (1 + 0.12)^3 = $337,825.25

5 0

4 years ago

Flaxco purchases inventory from overseas and incurs the following costs: the cost of the merchandise is $50,000, credit terms ar

erastovalidia [21]

Answer:

$52,000

Explanation:

The computation of the cost of inventory is shown below:

= Cost of merchandise + freight charges + insurance during transit + import duties - discount

= $50,000 + $1,500 + $500 + $1,000 - $1,000

= $52,000

The discount is computed below:

= Cost of merchandise × given percentage

= $50,000 × 2%

= $1,000

The advertising and the sales commission should not be considered. Hence, ignored it

6 0

4 years ago

Gambarini Corporation is a wholesaler that sells a single product. Management has provided the following cost data for two level

Neporo4naja [7]

Answer:

$541,800

Explanation:

Total cost of 6,000 units = $486,600 + $612,600 = $1,099,200

Total cost of 7,000 units = $567,700 + $624,400 = $1,192,200

Change in total cost = $1,192,200 - $1,099,200 = $92,900

Change in unit = 7,000 - 6,000 = 1,000

Variable cost per unit = Change in total cost/Change in unit = $92,900 / 1000 = $92.90

Using information on either 7,000 units or 6,000 units to calculate the variable cost, we have:

Total monthly Fixed Cost = Total Cost - Variable Cost = $1,099,200 - ($92.90 * 6,000) = $541,800

8 0

3 years ago

Which determinant of demand changes in the personal computer market as more individuals become interested in "surfing the intern

Usimov [2.4K]

The determinant of demand is the Number of buyers. The number of buyers is one of five request determinants that move the request bend when they change. The other four are purchasers' salary, purchasers' inclinations, different costs, and purchasers' desires. The quantity of purchasers willing and ready to purchase a decent influences the general request.

3 0

3 years ago

Faith Cassen has recently been hired as the manager of Gibraltar Coffee Shop. Gibraltar Coffee Shop is a national chain of franc

IrinaK [193]

Answer:

a. I Disagree with Faith's method of handling this situation because she has not followed the internal control principle of safeguarding of assets. Stealing is a serious issue. An employee who can justify taking a box of tea bags can probably justify “borrowing” cash from the cash register.

b. I Agree with Faith's method of handling this situation because Faith has followed the internal control principle of assignment of responsibility by making one employee responsible for the cash drawer and followed the internal control principle of segregation of duties (preparing the orders) from the accounting (taking orders and payments).

c. I disagree with Faith's method of handling this situation because Faith has not followed the internal control principle of segregation of duties. It is true that faith has made one employee responsible however after cash counting another employee or Faith himself remove the cash register tape and compare the balance with cash drawer for effective internal control. Also, Faith’s standard of no mistakes may encourage the cashiers to overcharge a few customers in order to cover any possible shortages in the cash drawer.

6 0

3 years ago