Read the excerpt from "If" by Rudyard Kipling.

The conventional payback period ignores the time value of money, and this concerns Green Caterpillar's CFO. He hwas now asked yo

Cerrena [4.2K]

Answer: $‭1,645,379.41‬

Explanation:

The deficiency attached to the Discounted Payback period is that it stops recognizing cashflows after the project is paid off.

Year 1 discounted cash flow = 2,000,000/(1 + 10%) = $1,818,181.82

Year 2 discounted cashflow = 4,250,000 / (1 + 10%)² = $3,512,396.69

Year 3 discounted cashflow = 1,750,000/( 1 + 10%)³ = $1,314,800.90

Amount that Discounted Payback period will not recognize is;

= Cumulated discounted cash flow - Initial cost

= 1,818,181.82 + 3,512,396.69 + 1,314,800.90 - 5,000,000

= $‭1,645,379.41‬

6 0

3 years ago

In the year, 2005 Janice Quinn sells a five-year-old car to Used Car, Inc. for $3,000. In the same year, Used Car, Inc. resells

Fittoniya [83]

Answer:

$500

Explanation:

The computation is shown below:

Data provided in the question

Sale value of five year old car to used car = $3,000

Now in the same year, the resales value to Ima Goner = $3,500

So, the contribution made in the GDP for the year 2005 is

= Resales value to Ima Goner - Sale value of five year old car to used car

= $3,500 - $3,000

= $500

5 0

3 years ago

Assume that microbrewery beer is a normal good. Prices of microbrewery beer have risen steadily in recent years. Over this same

Shkiper50 [21]

Answer:

The correct answer is option D.

Explanation:

Microbrewery beer is a normal good. Its prices have increased recently in recent years. The prices for fermenting vats used in beer have also risen and the consumer income has fallen.

Since beer is a normal good an increase in its price and decrease in the consumer income will decrease its demand. As a result, the demand curve will move to the left, decreasing the price of the product.

At the same time, the increase in the price of fermenting vats will increase the cost of producing beer. This will cause the supply of beer to decrease.

This will cause the supply curve to shift to the left. If the leftward shift in the supply curve is more than the leftward shift in demand, the price of beer will increase.

4 0

3 years ago

Kaluzniak Corporation leased equipment to Moeller, Inc. on January 1, 2020. The lease agreement called for annual rental payment

frozen [14]

Solution :

a). Fair value of the leased asset $ 7000

Less: $\text{Present value}$ of unguaranteed residual $ 3778.29

value [4500 x PV(6,3%)]

Amount to be recovered through lease payment $ 3221.71

Three periodic lease payment $ 1137.05

Rental payments $ 1137.00

b). Journal entries in the books of Kaluzniak.

Date Particulars Debit($) Credit($)

2020 Jan 1 Cash account 1137

To unearned lease revenue 1137

Jan 1 Unearned lease revenue 1137

To lease revenue 1137

Dec 31 Depreciation expense 714.29

To accumulated depreciation equipment 714.29

c).

Date Particulars Debit($) Credit($)

Jan 1, 2020 Legal fee 700

To cash 700

Jan 1 Advertisement 500

To cash 500

3 0

3 years ago

Seneca owns an interior painting service. Seneca promises Fran, a homeowner, that Seneca will paint the outside of Fran’s house.

MArishka [77]

Answer:

Promissory fraud.

Explanation:

In this scenario, Seneca owns an interior painting service. Seneca promises Fran, a homeowner, that Seneca will paint the outside of Fran’s house. Seneca knows that all of the painter-employees are busy for the next two months and really does not intend to paint Fran’s house. In this case, Seneca’s tortious behavior is known as promissory fraud.

Promissory fraud can be defined as a promise made by an individual or business entity (promisor), when in actual fact they have absolutely no intention to perform the actions or fulfil the promise when it was made the other party.

<em>Hence, Seneca exhibited a promissory fraud because he is aware that all of the painter-employees are busy for the next two months and really does not intend to paint Fran’s house. </em>

7 0

3 years ago