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gladu [14]
2 years ago
8

A company is considering investing in a new machine that requires a cash payment of $38,198 today. The machine will generate ann

ual cash flows of $15,904 for the next three years. What is the internal rate of return if the company buys this machine?
Business
1 answer:
PolarNik [594]2 years ago
6 0

Answer:

Internal rate of return = 12%

Explanation:

Below is the calculation of internal rate of return:

The new machine requires cash payment = $38198

Annual cash flows = $15904

Time period = 3 years

First divide the cash payment with the annual cash flow and then look at the factor table to find the interest rate at 3rd year.

Factor = 38198 / 15904 = 2.40

Now look the value 2.40 in the table:

Thus Internal rate of return = 12%

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Ganezh [65]

Answer:

Instructions are listed below

Explanation:

Giving the following information:

The son will enter college 10 years from now. An annual amount of $40,000 in constant dollars will be required to support the son's college expenses for four years.

The future general inflation rate is estimated to be 6% per year, and the market interest rate on the savings account will average 8% compounded annually

A) We need to find the present value for each 40,000-year expense.

Formula= FV/(1+i)^n

1: PV= 40,000/(1.06)^10= 22,335.80

2: PV= 40,000/(1.06)^11= 21,071.50

3: PV= 19,878.77

4: PV= 18,753.56

B) Total final value= 160,000

PV= 160,000/1.06^10= $89,343.16

C) We need to use the following formula:

FV= {A*[(1+i)^n-1]}/i

A= annual deposit

Isolating A:

A= (FV*i)/{[(1+i)^n]-1}

A= (160,000*0.06)/[(1.06^10)-1]= $12,138

5 0
3 years ago
The straight-line depreciation method and the double-declining-balance depreciation method: A. Produce the same depreciation exp
Artemon [7]

The relationship between the straight-line and double-declining-balance method is that they D. Produce the same total depreciation over an asset's useful life.

<h3>How are the straight-line and double-declining-balance methods related?</h3>

While they do not produce the same depreciation every year, they will eventually depreciate an asset in the same way overtime.

What this means is that both methods will depreciate an asset by the same amount at the end of the asset's life. However, the depreciation amounts will vary by method on an annual basis.

In conclusion, option D is correct.

Find out more on depreciation methods at brainly.com/question/26948130.

6 0
2 years ago
what is the accounting measurement of an insurance company's future obligations to its policy owners?
zvonat [6]

Answer:

provisions / accruals

Explanation:

see above in the answer, both mean basically the same but in insurance terms accrual is more correct

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3 years ago
Splish Brothers Inc. sold its accounts receivable of $70,300. What entry should Splish Brothers make, given a service charge of
Bingel [31]
Please help me! This is due tomorrow and I really need some help! Thank you.
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3 years ago
a country that can sell its products at a lower cost because it has lower standards for emissions from manufacturing facilities
MA_775_DIABLO [31]

A country that can sell its products at a lower cost because it has lower standards for emissions from manufacturing facilities is making use of predatory dumping .

What Is Predatory Dumping?

  • A form of anti-competitive behavior known as predatory dumping involves a foreign corporation underpricing its goods in an effort to stifle domestic competition.
  • The corporation may eventually establish a monopoly in its chosen market by outpricing competitors.

What is an example of predatory dumping?

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  • A glaring example is the onslaught of Chinese goods entering numerous international markets via physical storefronts, online, and marketplaces like E - Commerce company .

Learn more about predatory dumping

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