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Crazy boy [7]
3 years ago
9

West Street Automotive is considering adding state safety inspections to its service offerings. The equipment necessary to perfo

rm these inspections will cost $551,000 and will generate cash flows of $193,000 over each of the next five years. If the cost of capital is 17 percent, what is the MIRR on this project
Business
1 answer:
Over [174]3 years ago
6 0

Answer:

19.7%

Explanation:

The modified internal rate of return is a capital budgeting method used to determine the profitability of an investment. The MIRR assumes that cash inflows are reinvested at the firm's cost of capital and outflows are financed at the firm's financing cost.

MIRR = (Future value of a firm's cash inflow / present value of the firm's cash outflow)^ (1/n)  - 1

Future value = payment x[ (1 + interest rate)^n - 1 ] / interest rate

$193,000 x (1.17^5) - 1 / 0.17 = 1353779.24

1353779.24 / $551,000) ^0.2 - 1 = 19.7%

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Creswell Corporation's fixed monthly expenses are $29,000 and its contribution margin ratio is 56%. Assuming that the fixed mont
lions [1.4K]

Answer:

the company will have an operating income of $24,200 at sales level of $95,000

Explanation:

<u>Target profit formula:</u>

Fixed cost 29,000

Sales revenue  95,000

Contribution Margin Ratio 56% = 0.56

from each dollar of sales 56 cents remains to afford fixed cost and make a gain:

95,000 x 0.56 = 53,200 contribution

less 29,000 fixed cost = 24,200

6 0
3 years ago
It's advisable to start saving and investing as early as possible in order to A. allow for more spending later. B. take advantag
Dmitry_Shevchenko [17]

Answer: It's advisable to start saving and investing as early as possible in order to take advantage of compound interest.

Explanation:

<u><em>C IS THE ANSWER</em></u>

<u><em></em></u>

<u><em>PLEASE MARK BRAINLIEST THANK YOU!</em></u>

4 0
3 years ago
In the long run, if inputs are increased by 10 percent and output increases by 20 percent, then __________ are said to exist.
SCORPION-xisa [38]

Answer:

I dont know how this works but did u try 30

Explanation:

I thing bc your saying increase your adding on to soo yeah....

8 0
2 years ago
The following data are taken from the financial statements of Sigmon Inc. Terms of all sales are 2/10, n/45. 20Y3 20Y2 20Y1 Acco
sweet [91]

Answer:

X2

AR TO 7.638367347

Days on Inventory 48

X3

Explanation:

\frac{Sales}{Average AR} = $Accounts Receivables Turnover

<u>​where: </u>

$$Average AR=(Beginning AR+ Ending AR)/2

Sales 4,678,500

beginning 645,000

ending         580,000

$$Average AR=645000 + 580000)/2

Avg. AR = 612,500

\frac{4678500}{612500} = $Inventory Turnover

AR TO 7.638367347

\frac{365}{Inventory TO} = $Days in receivables

\frac{365}{7.63836734693878} = $Days in receivables

Days on Inventory 48

X3

Sales      5,653,500

beginning 645,000

ending         700,000

$$Average AR =645000 + 700000)/2

Avg- AR =        672,500

\frac{5653500}{672500} = $Inventory Turnover

AR TO 8.40669145

\frac{365}{8.40669144981413} = $Days in receivables

Days on Inventory 43

7 0
2 years ago
Even though most corporate bonds in the United States make coupon payments semiannually, bonds issued elsewhere often have annua
ohaa [14]

Answer:

892.69

Explanation:

Given the following :

Par value of bond (FV) = 1000

Period (n) = 15 years

Coupon rate (r) = 7.3% annually

Yield to maturity (r) = 8.6% = 0.086

The coupon price = 7.3% of par value

Coupon price (C) = 0.073 * 1000 = 73

Current price of bond can be computed using the relation:

= C * [1 - 1 / (1 + r)^n] / r + (FV / (1 + r)^n)

73 * [1 - 1/(1+0.086)^15]/0.086 + 1000/(1 + 0.086)^15

73*(1 - 1/3.44704)/0.086 + (1000/(1.086)^15)

= 73*8.2546131 + 290.10326

= 602.5867563 + 290.10326

= 892.69

5 0
3 years ago
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