Identifying your sources will help you to establish credibility.

You are analyzing a project with an initial cost of £130,000. The project is expected to return £20,000 the first year, £50,000

Mashutka [201]

Answer: Net Present Value = -$19,062

Explanation:

First, we'll compute the PV for the respective years

Present Value (Year-1)

= $0.6211 \times [1 + (0.055 - 0.06)]^{1}$

=0.6179945

Present Value (Year-2)

= $0.6211 \times [1 + (0.055 - 0.06)]^{2}$

=0.614904528

Present Value (Year-3)

= $0.6211 \times [1 + (0.055 - 0.06)]^{3}$

=0.611830005

Now, we'll compute the Cash Flow for the respective years

Cash Flow (Initial)

= $-130,000\times (\frac{1}{0.6211} )$

= -$209,306.07

Cash Flow (Year-1)

= $20,000\times (\frac{1}{0.61799} )$

=$32,362.75

Cash Flow (Year-2)

= $50,000\times (\frac{1}{0.61490} )$

=$81,313.44

Cash Flow (Year-3)

= $90,000\times (\frac{1}{0.611830} )$

=$147,099.68

Net Present Value:

= -$209,306.07 + ($32,362.75/1.141)+ ($81,313.44/1.142) +($147,099.68/1.143)

= -$209,306.07 +$28,388.38 + $62,568.05 + $99,288.10

= -$19,062

3 0

4 years ago

The Optical Scam Company has forecast a sales growth of 20 percent for next year. The current financial statements are shown her

Stolb23 [73]

Answer:

The external financing needed for next year is $1,766,004.

Explanation:

The external financing needed for next year can be calculated using the following formula:

External financing needed = ((Total assets / Sales) * Change in sales) - ((Short-term liabilities / Sales) * Change in sales) - ((Projected sales * Profit margin) * (1 - Dividend payout ratio)) ................... (1)

Where;

Total assets = $24,705,000

Sales = $30,500,000

Change in sales = Sales * Sales growth rate = $30,500,000 * 20% = $6,100,000

Short-term liabilities = Accounts payable = $6,405,000

Projected sales = Sales * (1 + Sales growth rate) = $30,500,000 * (1 + 20%) = $36,600,000

Profit margin = Net income / Sales = $2,630,550 / $30,500,000 = 0.0862475409836066

Dividend payout ratio = Dividends / Net income = $1,052,220 / $2,630,550 = 0.40

Substituting all the values into equation (1), we have:

External financing needed = (($24,705,000 / $30,500,000) * $6,100,000) - (($6,405,000 / $30,500,000) * $6,100,000) - (($36,600,000 * 0.0862475409836066) * (1 - 0.4))

External financing needed = $1,766,004

Therefore, the external financing needed for next year is $1,766,004.

8 0

3 years ago

During December of Year 1, Nile Co. incurred special insurance costs but did not record these costs until payment was made durin

o-na [289]

Answer:

The omission of this entry understated accrued liabilites. given that the related inventory was sold in year 1, it aslo overstated net income and retained earnings by understating cost of goods sold, the same effects would occur if the insurance costs were chargeable to expense as a period cost

Explanation:

Rules specify that contingent liabilities should be recorded in the accounts when it is probable that the future event will occur and the amount of the liability can be reasonably estimated. This means that a loss would be recorded (debit) and a liability established (credit) in advance of the settlement.

4 0

3 years ago

Analysts say visitors stay an average of how many seconds on any webpage?

Luda [366]

The answer is c. 10-20 seconds

3 0

3 years ago

Read 2 more answers

You pay 20% down on a home with a purchase price of $180,000. Your bank will loan the remaining balance at 7% APR. You have an o

Mariulka [41]

The difference between the annuity payment paid under the annual plan and that under the monthly plan is $11,496.43.

The Annuity Difference

An annuity is a series of payments made at equal intervals such as monthly, quarterly, or annually.

The annuity payment under each of the two plans in the question can be calculated using the formula for calculating the present value of an ordinary annuity as follows:

PV = P * ((1 - (1 / (1 + r))^n) / r) …………………………………. (1)

For the annual plan, the annuity payment can be calculated using equation (1) as follows:

PV = Present value = Loan from bank = Purchase price * (100% - Percentage of down payment) = $180,000 * (100% - 20%) = $144,000

PA = P = Annuity payment under annual plan = ?

r = APR = 7%, or 0.07

n = number of periods or years = 30

Substitute the values into equation (1) and solve for PA, we have:

$144,000 = PA * ((1 - (1 / (1 + 0.07))^30) / 0.07)

$144,000 = PA * 12.4090411835059

PA = $144,000 / 12.4090411835059

PA = $11,604.44

For the monthly plan, the annuity payment can be calculated using equation (1) as follows:

PV = Present value = Loan from bank = $144,000

PM = Annuity payment under monthly plan = ?

r = APR / 12 = 7% /12 = 0.07 / 12 = 0.00583333333333333

n = number of periods or months = 30 * 12 = 360

Substitute the values into equation (1) and solve for PM, we have:

$144,000 = PM * ((1 - (1 / (1 + 0.00583333333333333))^360) / 0.00583333333333333)

$144,000 = PM * 150.307567947822

PM = $144,000 / 150.307567947822

PM = $958.04

The difference between the annuity payment paid under the annual plan and that under the monthly plan can therefore be calculated as follows:

Difference = PA – PM = $11,604.44 - $958.04 = $11,496.43

Therefore, the difference between the annuity payment paid under the annual plan and that under the monthly plan is $11,496.43.

Learn more here: brainly.com/question/13405769.

4 0

2 years ago