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Over [174]
3 years ago
7

A firm is considering an investment in a new advertising project. The project will produce a cash flow of $1,000 in one year and

it will produce a cash flow of $15,000 two years from now. The firm has a required return of 11%. You are the manager of the advertising department and you estimate that the cost of this project is $13,000 today. Do you recommend that the firm accept this project
Business
1 answer:
timofeeve [1]3 years ago
6 0

Answer:

The fact the investment opportunity has a positive cash flow means that the project should be accepted since it is value-adding

Explanation:

We can evaluate the acceptability of the project using the net present value approach. The net present value is the present value of future cash flows discounted at the 11% required rate of return.

Present value=future cash flow/(1+required rate of return)^n

n is the year in which the cash flows are expected, it is 1 for year 1 cash flow and 2 for year 2 cash flow

NPV=$1,000/(1+11%)^1+$15,000/(1+11%)^2-$13,000

NPV=$75.24

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Prepare journal entries to record each of the following sales transactions of EcoMart Merchandising. EcoMart uses a perpetual in
Rudik [331]

Answer:

Oct 1

Debit  : Accounts Receivable $2,600

Debit : Cost of Sales $1,450

Credit : Sales Revenue $2,600

Credit : Merchandise $1,450

Oct 6

Debit : Sales Revenue $260

Debit : Merchandise $145

Credit : Accounts Receivable $260

Credit : Cost of Sales $145

Oct 9

Debit  : Accounts Receivable $1, 250

Debit : Cost of Sales $1,450

Credit : Sales Revenue $1, 250

Credit : Merchandise $1,450

Oct 11

Debit  : Cash $2,340

Credit : Accounts Payable $2,340

Explanation:

The perpetual method ensures that the cost of sales and inventory values are calculated after every transaction made.

Therefore, remember to show the cost of sale journal and the resulting decrease in inventory after every sale.

8 0
2 years ago
Which is an example of a person who is ambitious?
DerKrebs [107]

Answer:C. someone who is content to accept whatever comes their way

Explanation:

It's because the definition is perfectly helptful.having or showing a strong desire and determination to succeed.

6 0
2 years ago
Beaver Construction purchases new equipment for $50,400 cash on April 1, 2015. At the time of purchase, the equipment is expecte
mariarad [96]

Answer:

Beaver Construction

1. Journal Entry:

April 1, 2015:

Debit Equipment $50,400

Credit Cash Account $50,400

To record the purchase of new equipment for cash.

2. December 31, 2015:

Debit Depreciation Expense-Equipment $5,400

Credit Accumulated Depreciation - Equipment $5,400

To record the depreciation expense for the period.

3. Adjusted balances of Accumulated Depreciation and Depreciation Expense at December 31, 2015:

a) Accumulated Depreciation - Equipment

Beginning balance       $0

Depreciation Expense $5,400

Ending balance            $5,400

b) Depreciation Expense-Equipment $5,400

Explanation:

The depreciation expense for equipment is $5,400 ($600 x 9) since the depreciation charge for each month is $600.  The equipment was used from 9 months from April 1 to December 31 in 2015.  This implies that only $5,400 will be charged to Income Statement for the period.

7 0
3 years ago
A monopolist can sell 26,000 units at a price of $30 per unit. lowering price by $1 raises the quantity demanded by 1,000 units.
Nutka1998 [239]
If he sells the shares at 30 per unit, the equation would be:
30*26000=780000

If he lowers the price to 29 per unit and ups the demand by 1k, it would be:
29*27000=783000

The resulting change would net him an additional 3000 dollars, so your answer would be B.
7 0
3 years ago
You recently bought a used car and it breaks down. You take it to the repair shop, which will charge $400. You don’t have that m
notka56 [123]

Answer:

My Guest is P2P or Debit Card

Explanation:

3 0
2 years ago
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