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Lunna [17]
3 years ago
13

A firm is considering a project with annual cash flows of $300,000. The project would have a five-year life, and the company use

s a discount rate of 12%. What is the amount at which the firm would be indifferent between accepting or rejecting the investment
Business
1 answer:
stealth61 [152]3 years ago
7 0

Answer:

$1,081,434

Explanation:

<em>At indifference point, the present value of cash outflow equals  present value of cash inflow.</em>

Present value of cash inflow = Annual cash inflow * PV annuity factor (12%, 5 years)

Present value of cash inflow = $300,000*3.60478

Present value of cash inflow = $1,081,434

So, the amount at which the firm would be indifferent between accepting or rejecting the investment is $1,081,434.

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A project professional has just been assigned manager of a project to develop a new advertising campaign for an established prod
german

Answer:

<u>Establish project priorities</u>

Explanation:

<em>Remember</em>, we are told the project professional has been assigned to manage a project, therefore going by the guiding steps when defining a project, the next and second step he should take is to establish project priorities.

In other words, he should draft out what tasks should be done first, those for later, and so forth in other to successfully achieve/finish the project's objective.

4 0
3 years ago
The stockholders’ equity accounts of Indigo Corporation on January 1, 2017, were as follows.
Lubov Fominskaja [6]

Answer:

Indigo Corporation

Journal Entries:

Feb. 1:

Debit Cash Account with $60,000

Credit Common Stock with $40,000

Credit Additional Paid-in Capital with $20,000

To record the issue of 10,000 shares of common stock, par $4 at $6 each.

March 20:

Debit Treasury Stock with $8,000

Debit Additional Paid-in Capital with $6,000

Credit Cash Account with $14,000

To record the repurchase of 2,000 shares of treasury stock at $7 each.

October 1:

Debit Dividends - Preferred Stock with $35,000

Credit Dividends Payable with $35,000

To record preferred stock dividends declared.

November 1:

Debit Dividends Payable with $35,000

Credit Cash Account with $35,000

To record cash payment of dividends.

December 1:

Debit Dividends - Common Stock with $249,000

Credit Dividends Payable with $249,000

To record $0.50 per share common stock dividend.

December 31:

Debit Dividends Payable with $249,000

Credit Cash Account with $249,000

To record payment of dividend.

Debit Net Income with $550,000

Credit Retained Earnings with $550,000

To record the transfer of net income to Retained Earnings.

Explanation:

a) Whereas $60,000 cash was received for the issue, only $40,000 (10,000 x $4) is credited to Common Stock.  The additional of $20,000 is credited to Additional Paid-in Capital.  This shows that the shares were issued above their par value.

b) When 2,000 shares of treasury stock were reacquired at a total cost of $7 per share, the Treasury Stock account is debited with the par value of $4 per share ($8,000).  The above par value difference is taken to the Additional Paid-in Capital account as a debit.

c) Dividends on preferred stock was prorated for 10 months, from January to October.  This is because the percentage dividend is for a year.

d) Dividends on common stock would not be prorated since they are based on annual percentages like preferred stock.  Dividends on the common stock is, therefore, calculable on the outstanding balance.  

e) Treasury Stock is a contra account to the Common Stock as it reduces the balance of common stock outstanding.  The outstanding balance of Treasury Stock increased to 12,000 (10,000 + 2,000).

f) Outstanding common stock reduced from 500,000 shares to 498,000 (500,000 + 10,000 - 12,000).  The additional 10,000 represented the new issue and the 12,000 represented the Treasury Stock.

5 0
3 years ago
Which of the following sections of a business plan comes first but should be written last?
8090 [49]

Answer:

B. Executive Summary

Explanation:

Executive Summary is a business plan which comes first and should be written last

3 0
2 years ago
"A customer has an existing short margin account and wants to write five covered puts against 500 shares of stock that are short
Aleksandr-060686 [28]

Answer: 0

Explanation:

From the question, we are informed that a customer has an existing short margin account and wants to write five covered puts against 500 shares of stock that are short in the account.

Based on the above scenario, the margin requirement to write the puts will be zero. This is due to the fact that there is no risk that is attached to the short calls.

8 0
3 years ago
Because of vast differences between different regions, multinational corporations often use ______ departmentalization.
Alexus [3.1K]

Answer:

<u>geographic </u>departmentalization.

Explanation:

It is correct to say that multinational corporations tend to use geographic departmentalization due to the large differences between different regions.

The geographic departmentalization corresponds to a strategy where a company uses a form of structure oriented to a region, that is, it allows the operationalization to be more effective in a region that has greater demand or needs a physical office to better and faster service its customers.

5 0
2 years ago
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