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madam [21]
2 years ago
6

An investment project provides cash inflows of $705 per year for eight years. What is the project payback period if the initial

cost is $1,900
Business
1 answer:
attashe74 [19]2 years ago
7 0

Answer:

2 years and 8 months

Explanation:

The payback period is the length of time required for thee total cashflows to equal the Initial Capital Investment.

Payback = $1,900

Therefore,

$1,900 = $705 + $705 + $490

Which is 2 years and 8 months ($490/ $705 × 12)

Conclusion :

The project payback period is 2 years and 8 months

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Sage Hill Inc. Issues $254,000, 10-year, 10% bonds at 97. Prepare the journal entry to record the sale of these bonds on March 1
Mamont248 [21]

To record final annual interest and bond repayment:

2017

Mar 1

Bonds interest expense       $25,400

Bonds payable                      $254,000

          Cash                                                  $279,000

On March 1, 1997, the date of issuance, the entry is:

1997

Mar 1

Cash                                        $254,000

          Bonds payable                                  $254,000

On each March 1 for 10 years, beginning March 1, 1997 (ending March 1, 2017), the entry would be (Remember, calculate interest as Principal x Interest Rate x Time)

Mar 1

Bond Interest Expense ($100,000 x 12% x 1)          $25,400

          Cash                                                                                  $25,400


8 0
3 years ago
Which of the following statements is NOT true concerning the Other Dependent Credit
omeli [17]

Answer:

The incorrect statement is letter "B": Residents of Canada meet the definition as a qualifying person.

Explanation:

Credit for Other Dependent is a tax credit taxpayers can claim for every qualifying dependent that is not considered as a Child Tax Credit (17 years or older and elderly parents). The taxpayer can get up to $500 nonrefundable credit for each of those qualifying dependents. Residents of Canada and Mexico do not meet the definition of qualifying dependent.

8 0
3 years ago
Read 2 more answers
A firm is considering two mutually exclusive projects, X and Y, with the following cash flows:
Murrr4er [49]

Answer: MIRR (project x ) = 3.42% , Project Y = 4.51%

Explanation:

Modified internal Rate of return

Project X

Period (n) = 4

Weighted Average Cost of equity(WACC) = 8.0%

Cash out flow = -$1000

Cash Inflows = $100 year 1 , $280 year 2 , 370 year 3 ,$700 year 4

Present Value Cash Inflows = PVCIF = Cash Inflow/(1+WACC)^n

PVCIF = 100/(1+0.08)^1 + 280/(1+0.08)^2 + 370/(1+0.08)^3 + $700/(1+0.08)^4

PVCIF = 95.592592593 + 240.05486968 + 293.71792918 + 514.5208969

Present Value of Cash inflows (PVCIF) = $1143.8862884

Present Value of Cash out flows(PVCOF) = -$1000

Modified Internal Rate of Return (MIRR) = \sqrt[n]{\frac{PVCIF}{PVCOF} } -1  

Modified Internal Rate of Return (MIRR) = \sqrt[4]{\frac{1143.8862884}{10000} } -1

Modified Internal Rate of Return (MIRR) = 0.034178971

Modified Internal Rate of Return (MIRR) = 3.41789971 = 3.42%

Project Y

Period (n) = 4

Weighted Average Cost of equity(WACC) = 8.0%

Cash out flow = -$1000

Cash Inflows = $1100 year 1 , $110 year 2 , $50 year 3 ,$55 year 4

Present Value Cash Inflows = PVCIF = Cash Inflow/(1+WACC)^n

PVCIF = $1100/(1+0.08)^1 + $110/(1+0.08)^2 + $50/(1+0.08)^3 + $55/(1+0.08)^4

PVCIF = 1018.5185185 + 94.307270233 + 39.691612051 + 40.42641904

Present Value of Cash inflows (PVCIF) = $10192.9438198

Present Value of Cash out flows(PVCOF) = -$1000

Modified Internal Rate of Return (MIRR) = \sqrt[n]{\frac{PVCIF}{PVCOF} } -1  

Modified Internal Rate of Return (MIRR) = \sqrt[4]{\frac{1192.9438198}{10000} } -1

Modified Internal Rate of Return (MIRR) = 0.0450931421

Modified Internal Rate of Return (MIRR) = = 4.50931421 = 4.51%

4 0
3 years ago
Sonny's Super Market has installed a self-service checkout counter, and wishes to understand how this has affected customer serv
valina [46]

Answer:

The Expected time a customer spends in the system is 4

Explanation:

According to the given data we have the following:

Arrival rate A = 1 every other minute = 30/hour or (30/60) per minute

Service rate S = 84 seconds = 60×60/84= 42.86 customers per hour

System utilization factor P = A/S = 30/42.86 = 0.699

Length of the system L = P/(1-P) = 0.699/(1-0.699) = 2.322

Therefore, Expected time a customer spends in the system = L/A = 2.322/(30/60) = 4.644=4

5 0
3 years ago
If in the economy, business saving equals $240 billion, household saving equals $15 billion and government saving equals -$150 b
Marrrta [24]

Answer:

$105 billion

Explanation:

We know that

The national saving equal to

= Private saving + public saving

where,

Private saving = Business saving + household savings

                        =$240 billion + $15 billion

                        = $255 billion

And, the public saving would be -$150 billion

So, the national saving would be

= $255 billion - $150 billion

= $105 billion

6 0
3 years ago
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