Answer:
b.The IRR is equal to 25.85%
Explanation:
Firstly we are given that i consider investing $100000 which will in this problem be our Cinitial which is the initial investment for the project.
Then now given the risk of this project, my cost of capital is 20% so then we will compare this to the IRR and see if i can accept the project or not if the cost of capital is greater than the IRR than its not good to invest on the project but if the cost of capital is less than the IRR then the this will be a good investment as the cost of capital also checks the opportunity cost.
The future payment cash flows which is $500000 so we will use the following formula:
NPV = (cash flow)/(1+IRR)^n - initial investment
so we find the present value of the cash flow of the investment and subract the initial investment which will give us a zero cause the present value of the cash flow is equal to the initial investment therefore( n is the period of cash flows):
0= $500000/(1+IRR)^7 - $100000 transpose the initial investment and solve for IRR.
$100000(1+IRR)^7= $500000 then divide both sides by $100000
(1+IRR)^7 = 5 then find the 7nth root of both sides to eliminate the exponent of 7
1+ IRR = ![\sqrt[7]{5}](https://tex.z-dn.net/?f=%5Csqrt%5B7%5D%7B5%7D)
1+IRR = 1.258498951 then subtract 1 both sides to solve for IRR
IRR = 0.258498... then multiply by 100 as IRR is a percentage
IRR= 25.85 % rounded off to two decimal places which is the answer b
Answer:A. LN, JQ, RQ
Explanation:
To know the current profitability, we need to determine the contribution margin unit by the minutes on the constraints .
a) For LN
Contribution by unit = Selling price per unit- Variable cost per unit
$ 161.88 -$116.12 = $45.76
Contribution by the minutes = Contribution by unit / Minutes on the constraint
= $45.76/ 2.60 = 17.60
B) For JQ
Contribution by unit = Selling price per unit- Variable cost per unit
$ 350.41 -$279.11 = $71.3
Contribution by the minutes = Contribution by unit / Minutes on the constraint
= $71.3/ 4.60 = 15.50
c) For RQ
Contribution by unit = Selling price per unit- Variable cost per unit
$ 446.71 -$338.71 = $108
Contribution by the minutes = Contribution by unit / Minutes on the constraint
= $108/ 7.50 = 14.40
In order of their current profitability from most profitable to least profitable, We have LN with 17.60, next JQ with 15.50 and the least RQ with 14.40
Answer:
b) People who operate and function within the control system.
Explanation:
Internal controls are the process and mechanisms that an organization puts in place to ensure the integrity of its accounting and financial information. Internal control helps a business achieve operational efficiency and effectiveness. It ensures that a company financial reporting complies with the relevant laws, policies, and regulations.
The people working in internal control determines whether the mechanisms will succeed or fail. Employees assigned in internal control must be of high integrity and be able to discharge their duties without fear or favor. Internal control protects company resources from theft, wastage, or misuse. For internal control to achieve its purpose, the Individuals in that department must not comprise in any situation.
Answer:
The answer is that the net income under absorption costing would be higher than the net income under variable costing.
Explanation:
Absorption costing and variable costing are terms used in accounting contexts. Absorption costing, also known as full costing, incurs overhead costs when the product is sold; not before it. Variable costing, also referred to as direct costing, would include overhead costs during the period the costs occurred. In this condition, net income would be higher using absorption since overhead costs would not be included until the product is sold.
