50 points, please get this done ASAP

We are evaluating a project that costs $1.68 million, has a six-year life, and has no salvage value. Assume that depreciation is

zvonat [6]

Answer:

Best-Case Worst-Case

NPV NPV

PV of cash inflows $2,897,706 $3,187,477

PV of project cost $1,680,000 $1,848,000 ($1,680,000 * 1.1)

NPV $1,217,706 $1,339,477

Explanation:

a) Data and Calculations:

Initial project cost = $1.68 million

Project's estimated life = 6 years

Salvage value = $0

Depreciation expense = $280,000 ($1.68 million/6)

Income Statement:

Sales revenue (90,000 * $37.95) = $3,415,500

Cost of goods sold:

Variable cost (90,000 * $23.20) = 2,088,000

Gross profit = $1,327,500

Fixed costs = 815,000

Income before tax = $512,500

Income tax (21% of $512,500) = 107,625

Net income = $404,875

Add depreciation expense 280,000

Annual cash inflows = $684,875

PV annuity factor for 6 years at 11% = 4.231

PV of annual cash inflows of $684,875= $2,897,706 ($684,875 * 4.231)

Annual cash inflows = $753,363 ($684,875 * 1.1)

PV of annual cash inflows of $753,363 = $3,187,477 ($753,363 * 4.231)

3 0

3 years ago

The following information applies to the questions displayed below.] In each of the cases below, assume Division X has a product

Dmitry [639]

Answer:

$12

Explanation:

Calculation to determine the lowest acceptable transfer price from the perspective of selling division

Using this formula

Lowest Transfer Price = Variable Costs per unit - Internal Savings + Opportunity Cost

Where,

Variable Costs per unit = $12

Internal Savings = $0

Opportunity Cost = $0

Let plug in the formula

Lowest Transfer Price = $12-$0+$0

Lowest Transfer Price = $12

Therefore the lowest acceptable transfer price from the perspective of selling division is $12

7 0

3 years ago

ABC stock has just closed at $70.50. A customer has an open order on the Specialist's book (DMM's book) to sell short 100 shares

Rudiy27

Answer:

A) Sell short 100 ABC at 69.45 Stop

Explanation:

When an order is placed below the market (OBLOSS - Open Buy Limits Open Sell Stops) it will be adjusted on the specialist's book for distributions on ex date. This open sell stop order = $70 - $0.55 (dividend) = $69.45

So the adjusted order will be: Sell short 100 ABC at 69.45 stop.

7 0

3 years ago

Oil wells and seasonal resorts will often shut down temporarily because Multiple Choice variable costs for pumping oil and opera

SVETLANKA909090 [29]

Answer:

Oil wells and seasonal resorts will often shut down temporarily because prices for their output temporarily fall below their average variable costs of production.

Explanation: If the price is below the minimum average variable cost, the firm would lose less money by shutting down. In contrast, in scenario 3 the revenue that the center can earn is high enough that the losses diminish when it remains open, so the center should remain open in the short run.

7 0

3 years ago

For its first year of operations, Tringali Corporation's reconciliation of pretax accounting income to taxable income is as foll

Effectus [21]

Answer:

Tringali corporation should report $ 88,288 as the deferred tax liability as of the end of the first year of its operations.

Explanation:

This type of income tax is a liability which a corporation records on its balance sheet because of the difference in revenue recognition between the corporation's accounting practices and the tax laws.

Here for calculating the deferred income tax we will simply calculate the tax rate given on the taxable income of the income and also on the temporary difference in the depreciation.

DEFERRED INCOME TAX LIABILITY =

TAXABLE INCOME X TAX RATE + TEMPORARY DIFFERENCE X TAX RATE

= $256,200 X 32% + $ 19,200 X 32%

= $81,984 + $6,304

= $ 88,288

6 0

3 years ago