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yulyashka [42]
3 years ago
8

A 4-year project has an annual operating cash flow of $42,000. At the beginning of the project, $6,000 in net working capital wa

s required, which will be recovered at the end of the project. The firm also spent $21,900 on equipment to start the project. This equipment will have a book value of $5,460 at the end of the project, but can be sold for $6,920. The tax rate is 21 percent. What is the Year 4 cash flow?
Business
1 answer:
OLEGan [10]3 years ago
3 0

Answer:

Total cash flow $54,613

Explanation:

The computation of the year 4 cash flow is given below:

Selling price of equipment $6,920

Book value at year 4 end $5,460

Capital gain $1,460

Tax on capital gain at 21% $306.6

So,  net cash flow from the sale of equipment  

= $6,920 - $307

= $6,613

Now year 4 cash flow is  

Annual operating cash flow $42,000

Release of working capital  $6,000

Net cash flow form sale of equipment $6,613  

Total cash flow $54,613

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viva [34]

Answer:

B. Commercial impracticability

Explanation:

Commercial impracticabilty occurs when the actions under a contract is impractical and cannot be accomplished or achieved. It is triggered when actions or performance of a contract by a party has become impracticable and hence unfeasible or maybe just too difficult or costly to accomplish. The best defense for the florist in this case is commercial impracticabilty as the disease sweeping through the type of rose Belinda ordered has made it difficult and costly to accomplish or achieve.

5 0
3 years ago
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Determine the capitalized cost of a permanent roadside historical marker that has a first cost of $75,000 and a maintenance cost
densk [106]

Answer:

The capitalized cost is $ 84,667.20

Explanation:

First of all please note that the cost of $ 75,000 is already the present cost.

The cost of $3200 which occurs every 3 years can be converted into a value using factor A/F for one life cycle.

The capitalized cost then can be calculated as follows :

CC = $ 75,000 + $ 3200(A/F, 10%, 3 years)/interest

CC = $ 75,000 + $ 3,200(0.3021)/0.1

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CC = $ 84,667.20

6 0
3 years ago
In communication, what is purpose?
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C.

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The purpose for communication is whatever the reason you would want to communicate in the first place.

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A new business owner would want to know the competition’s strengths for all the following reasons EXCEPT
Rudiy27

Answer:

Option D

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3 years ago
Neuman Corporation Convertible Bonds The following data apply to Neuman Corporation's convertible bonds: Maturity: 10 Stock pric
Natalija [7]

Answer:

A. The bond’s conversion ratio is 28.57

B. The bond’s conversion value is $857.14

C. The bond’s straight debt value is $798.70

D. The minimum price at which Neuman’s bonds should sell is $857.14

Explanation:

A. In order to calculate the bond’s conversion ratio we would have to calculate the following formula:

bond’s conversion ratio=par value/conversion price

According to the given data:

par value=$1,000

Conversion price=$35

Therefore, bond’s conversion ratio=$1,000/$35

bond’s conversion ratio=28.57

B. To calculate the bond’s conversion value we would have to make the following calculation:

bond’s conversion value=bond’s conversion ratio*Stock price

bond’s conversion value=28.57*$30.00

bond’s conversion value=$857.14

C. To calculate the bond’s straight debt value we would have to calculate the following formula:

bond’s straight debt value=PV(0.08,10,50,1,000)

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D. The minimum price at which Neuman’s bonds should sell is $857.14

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3 years ago
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