1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
disa [49]
3 years ago
7

Your company has an opportunity to invest in a project that is expected to result in after-tax cash flows of $7,000 the first ye

ar, $9,000 the second year, $12,000 the third year, -$8,000 the fourth year, $19,000 the fifth year, $25,000 the sixth year, $28,000 the seventh year, and -$6,000 the eighth year. The project would cost the firm $47,300. If the firm's cost of capital is 18%, what is the modified internal rate of return
Business
1 answer:
Helga [31]3 years ago
6 0

Answer:

The modified internal rate of return is 15.67%.

Explanation:

Note: See the attached excel file for the calculation of the total present value of the after-tax cash flows.

From the attached excel file, we have:

Total present value of the after-tax cash flows = $40,332.66

The modified internal rate of return (MIRR) can be calculated using the following formula:

MIRR = (PV / Outlay)^(1/n) * (1 + r) - 1……………….. (2)

Where;

PV = Total present value of the after-tax cash flows = $40,332.66

Outlay = Absolute value of cost of the project = $47,300

r = cost of capital = 18%, or 0.18

n = number of years = 8

Substitute the values into equation (1) to have:

MIRR = ($40,332.66 / 47,300)^(1/8) * (1 + 0.18) - 1 =  0.1567, or 15.67%

Therefore, the modified internal rate of return is 15.67%.

Download xlsx
You might be interested in
Determine whether each of the following topics would more likely be studied in microeconomics or macroeconomics. Microeconomics
jeka57 [31]

Answer:

The correct answers are:

A) The effects of the Internet on the pricing of used cars.  (Microeconomics)

B) The effect of government regulation on a monopolist's production decisions . (Microeconomics)

C) The effects of government tax policy on long-term economic growth. (Macroeconomics)

Explanation:

The field of economics is usually broken down into two broad categories: Microeconomics and Macroeconomics. The goal of all economics is to analyze the production and consumption of finite resources like oil, wheat, capital or even labor. Microeconomics observes these issues from an individual or business perspective. Macroeconomics looks at the issues from the perspective of the country as a whole, and the policies affecting the economy. Thus:

A) The effects of the Internet on the pricing of used cars. (Microeconomics)

B) The effect of government regulation on a monopolist's production decisions. (Microeconomics)

C) The effects of government tax policy on long-term economic growth (Macroeconomics)

3 0
3 years ago
A management professor discovers a way for corporate management to operate more efficiently. He publishes his findings in a jour
patriot [66]

A management professor discovers a way for corporate management to operate more efficiently. He publishes his findings in a journal. His findings are common, but not proprietary, knowledge. Corporate management is a crucial component of running a business. It outlines the hierarchy of leadership positions.

The procedure for employees to follow when reporting to their superiors, and the method for rewarding employees for their efforts. Your team can thrive by comprehending corporate management and its function within a business or organization. In this article, we go through the definition and many forms of corporate management.

The stages involved in formulating a plan and advice for developing your own management style. Planning, directing, coordinating, and controlling a company's operations are all part of corporate management.

To learn more about corporate management, click here

brainly.com/question/12238916

#SPJ4

7 0
2 years ago
Analyzing and Reporting Financial Statement Effects of Transactions M.E. Carter launched Carter Company, a professional services
Aleonysh [2.5K]

Answer:

$18,000

Explanation:

To find the Sales Revenue we simply add the $12,000 cash received immediately, and the $30,000 received as partial payment, totalling $42,000.

Then, we simply complete the proposed income statement:

Income Statement for the Month Ended in March 31

Sales Revenue               $42,000

Rent Expense                  $9,600

Wage Expense                $14,400

Net Income                      $18,000

Net Income is equal to Revenue - expenses.

7 0
3 years ago
Sara wants to start her own business. She is not sure if she wants to be a sole proprietor or get a partner. She asks a financia
lorasvet [3.4K]

Answer:

B) She has to share all of the profits with the partner.

Explanation:

A partnership is a business owned by two or more parties while a sole proprietorship is owned by one person. In the former, decisions are made jointly and the process might take long since all partners must consent to it. Another disadvantage is that all profits are shared between or among all partners unlike a sole proprietorship where the owner takes all the profits.

8 0
3 years ago
Read 2 more answers
Codetermination:
aleksandr82 [10.1K]

Answer:D. is the inclusion of a corporation's employees on its board.

Explanation: Codetermination is a term applied in terms of describing the board composition of a corporation to mean the inclusion of the employees of a corporation to form part of the board and also take part in determining the pace and processes of decision making within an organisation.

Codetermination ensure that workers also also part of the decision makers in a corporate entity.

7 0
3 years ago
Read 2 more answers
Other questions:
  • Jason works for a restaurant that serves only organic, local produce. What trend is this business following?
    7·2 answers
  • States in which region receive more of their revenue from the federal government than do most other states?
    12·1 answer
  • in its first month of operations, Waterway Industries made three purchases of merchandise in the following sequence: (1) 370 uni
    11·1 answer
  • What is the Total Cost of a stock purchase if the stock price is $54, shares purchased 150, with a $5 Commission Fee? (See probl
    7·1 answer
  • It ONLY makes sense to implement an ABC system when: A. ABC provides information to make better decisions. B. Its benefits excee
    11·1 answer
  • Marketing in foreign markets can require altering the goods or services offered to meet the taste of local customers. therefore,
    6·1 answer
  • Seamstresses at Rear Gear, a large maker of backpacks, have become more productive due to the firm’s recent purchase of new sewi
    12·1 answer
  • Suppose that Spain and Austria both produce oil and cheese. Spain's opportunity cost of producing a pound of cheese is 4 barrels
    10·1 answer
  • Cagney and Lacey enter into a written contract to open "Tried and True," a store specializing in used guns recovered from murder
    8·1 answer
  • When evaluating service quality, _____ refers to the knowledge and courtesy of employees and their ability to convey trust. a. a
    15·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!