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present value calculation) Dowling Sportswear is considering building a new factory to produce aluminum baseball bats. This proj

STALIN [3.7K]

Answer:

The NPV is $534,819.11

Explanation:

The computation of the Net present value is shown below

= Present value of all yearly cash inflows after applying discount factor - initial investment

The discount factor should be computed by

= 1 ÷ (1 + rate) ^ years

where,

rate is 9%

Year = 0,1,2,3,4 and so on

Discount Factor:

For Year 1 = 1 ÷ 1.09^1 = 0.9174

For Year 2 = 1 ÷ 1.09^2 = 0.8417

For Year 3 = 1 ÷ 1.09^3 = 0.7722

For Year 4 = 1 ÷ 1.09^4 = 0.7084

For Year 5 = 1 ÷ 1.09^5 = 0.6499

For Year 6 = 1 ÷ 1.09^6 = 0.5963

For Year 7 = 1 ÷ 1.09^7 = 0.5470

For Year 8 = 1 ÷ 1.09^8 = 0.5018

So, the calculation of a Present value of all yearly cash inflows are shown below

= Year 1 cash inflow × Present Factor of Year 1 + Year 1 cash inflow × Present Factor of Year 1 + Year 1 cash inflow × Present Factor of Year 1 + Year 1 cash inflow × Present Factor of Year 1 + Year 1 cash inflow × Present Factor of Year 1 + Year 1 cash inflow × Present Factor of Year 1 + Year 1 cash inflow × Present Factor of Year 1 + Year 1 cash inflow × Present Factor of Year 1

= $1,000,000 × 0.9174 + $1,000,000 × 0.8417 + $1,000,000 × 0.7722 + $1,000,000 × 0.7084 + $1,000,000 × 0.6499 + $1,000,000 × 0.5963+ $1,000,000 × 0.5470 + $1,000,000 × 0.5018

= $917,431.19 + $841,679.99 + $772,183.48 + $708,425.21 + $649,931.39 + $596,267.33 + $547,034.24 +$501,866.28

= $5,534,819.11

So, the Net present value equals to

= $5,534,819.11 - $5,000,000

= $534,819.11

We take the first four digits of the discount factor.

6 0

4 years ago

If 1% of the population has 70% of the wealth, while the other 99% of the population has the remaining 30% of the wealth, GDP __

12345 [234]

Answer:

Would not be able to show that disparity

Explanation:

Why the GDP would not be able to show that disparity?

Because GDP is an aggregate indicator of a country's economy, which accounts for the total amount of goods and services produced by that economy, and does not consider how it is formed from different population groups.

One way to calculate the GCP is using the expenditures of the different consumers of the economy:

GDP = Private consumption + Goverment consumption + Investement from privates + Exports - Imports

As you see those are aggregate consumtptions, thus the GDP is not able to show that there is a dispparity in the wealth inside a nation.

4 0

3 years ago

Economists believe that resources should be used as efficiently as possible to:

PilotLPTM [1.2K]

Economists believe that resources should be used as efficiently as possible to: eliminate scarcity

An economist is a British weekly newspaper published in printed and digital demitab format with a focus on the current situation, international business, politics, technology, and culture.

The London-based newspaper is owned by The Economist Group, with major editorial offices in major cities in the United States and the continent of Europe, Asia, and the Middle East. In 2019, the average number of prints worldwide exceeded 909,476. Combined with its digital presence, this is over 1.6 million.

Through her social media platform, she reached 35 million viewers in 2016. Newspapers place a clear emphasis on data journalism and analysis, rather than the original coverage, which has been both criticized and perceived.

Learn more about Micro Economist here: brainly.com/question/17996535

#SPJ4

7 0

2 years ago

A measure of GDP in which quantities produced are valued at the prices of a fixed base year is called:

Furkat [3]

Answer:

Real GDP

Explanation:

A measure of GDP in which quantities produced are valued at the prices of a fixed base year is called "Real GDP"!

Real GDP measures the values of the output adjusted for price changes. It reflects the value of all goods and services which are produced in a particular year.

It is also known as "constant-price" GDP. Mathematically, Real GDP = nominal GDP/ deflator.

7 0

4 years ago

On January 1, 2014, Pert Company purchased 85% of the outstanding common stock of Sales Company for $350,000. On that date. Sale

Alexeev081 [22]

Answer and Explanation:

The journal entries are shown below:

a. For investment related entries

Investment in sales Dr $350,000

To cash $350,000

(being the investment is recorded)

Investment in sales Dr ($148,000 × 85%) $125,800

To Subsidiary income $125,800

(Being the investment in sales is recorded)

Cash Dr $42,500

To Dividend income $42,500

(Being the dividend income is recorded)

b. For work paper eliminating entries

Equity income ($148,000 × 85%) $125,800

To Dividend $42,500

To investment in sales $83,300

(Being the equity income is recorded)

Common stock Dr $100,000

Other contributed capital Dr $40,000

Retained earnings Dr $140,000

Difference between implied and book value Dr $131,765 (Bal figure)

To Investment in S Company $350,000

To Non controlling interest $61,765 ($350,000 ÷ 0.85 × 0.15)

(Being the consolidated items are recorded)

Land Dr $131,765

To Difference between implied and book value Dr $131,765

(Being the land is recorded)

Working note:

Particulars Parent share Non-conrolling interest Total value

Purchase price

& implied value $350,000 $61,765 $411,765

Less:

Book value -$238,000 -$42,000 -$280,000

Difference

amount $112,000 $19,765 $131,765

Less:

Land value -$112,000 -$19,765 -$131,765

Balance $0 $0 $0

4 0

3 years ago