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frosja888 [35]
3 years ago
13

Management of Carla Vista Home Furnishings is considering acquiring a new machine that can create customized window treatments.

The equipment will cost $199,550 and will generate cash flows of $104,750 over each of the next six years. If the cost of capital is 13 percent, what is the MIRR on this project
Business
1 answer:
Nutka1998 [239]3 years ago
5 0

Answer:

MIRR = 27.85%

Explanation:

Below is the calculations:

The cost of equipment, Present value = $199550

Generate cash flow each year = $104750

Time = 6 years

Now find the future value of annual cash flow = 104750 (F/A , 13%, 6)

The future value of annual cash flow =104750 x 8.3227

The future value of annual cash flow = $871802.825

Now find the MIRR = (871802.825 / 199550)^(1/6)-1

MIRR = (4.3688)^(1/6)-1

MIRR = 27.85%

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E-Eyes just issued some new preferred stock. The issue will pay an annual dividend of $18 in perpetuity, beginning 7 years from
barxatty [35]

Answer:

price of preferred stock = $465.65

Explanation:

given data

annual dividend = $18

return = 3.2 percent = 0.032

solution

we know prefer stock price is express as

prefer stock price Vp = \frac{d}{Kp}

here Vp is value of preference share and d is constant dividend and Kp is rate

so

prefer stock in 6th year will be = \frac{18}{0.032} = $562.50

so that price of preferred stock today = \frac{P6}{(1+Kp)^{n-1}}

price of preferred stock = \frac{562.50}{(1+0.032)^{7-1}}

price of preferred stock = $465.65

7 0
4 years ago
An economy has five people: george, sarah, mason, abbot, and jin. george works for plastics, inc., 40 hours a week. sarah works
Katena32 [7]
The unemployed people in this economy are MASON AND ABBOT. 
Unemployment is said to occur in an economy, when people who are in the working age bracket actively search for work for a long time without getting any. There are different types of unemployment. Unemployment rate is usually used to gauge how healthy an economy is. In the scenario given above, it can be seen that both Mason and Abbot are of working age and they are both actively searching for work without finding one. <span />
3 0
3 years ago
Ugh Inc.'s net income for the most recent year was $15,585. The tax rate was 40 percent. The firm paid $3,846 in total interest
Umnica [9.8K]

Answer:

4.71

Explanation:

Cash coverage is a financial tool to calculate the proportion of available cash to interest expenses. It is useful in that it gives a deeper insight into available cash to offset interest expense and guide towards proper investment of cash.

<u>Workings</u>

Cash coverage ratio = cash + cash equivalent / interest expenses.

To arrive at the cash equivalent , depreciation is added back to the net income

Cash equivalent = 15,585+ 2,525 = 18,110

Interest expenses = 3,846

Cash coverage ratio = 18,110 / 3,846 = 4.71

This seems high and it is advisable that cash should be used for some short term investments to earn other profit

7 0
4 years ago
At Upper Limits International, management's expectation for employee creativity is high and employees tend to work with little d
arsen [322]

Answer:

the sky is falling its ok tho im ready to catch it

5 0
3 years ago
The pharmaceutical company Merck's new drug Vioxx was a blockbuster, generating revenues of $2.5 billion a year by 2002 and grow
nalin [4]

Answer:

Core Values

Explanation:

In the given scenario, Merck has deviated from its core values which are dedicated to the healthcare sector and transparency of drug development. It manipulated and didn't made the side effects of the drug public during testing.

4 0
3 years ago
Read 2 more answers
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