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Trava [24]
3 years ago
8

Tangerine Inc. is evaluating a capital project for investment. The initial cash outflow in Year 0 is $1,500 followed by cash inf

low of $500 each year for four years. Which of the following is the terminal value of the project? Assume the required rate of return is 12%. (Round off the answer to two decimal places.) a. ​$1,889.45 b. ​$1,626.57 c. ​$3,336.78 d. ​$2,486.23 e. $2,389.66​
Business
1 answer:
irina [24]3 years ago
8 0

Answer:

Terminal value

= 500(1+0.12)3 + 500(1+0.12)2 + 500(1+0.12)1+ 500(1+0.12)0

= 500(1.12)3 + 500(1.12)2 + 500(1.12)1 + 500(1.12)0

= 702.464 + 627.2 + 560 + 500

= $2,389.66

The correct answer is E

Explanation:

Terminal value is a function of number of years cashflow for each year can be re-invested at the appropriate discount rate. The cashflow for year 1 can be re-invested for 3 years since the life of the project is 4 years. cashflow for year 2 can be re-invested for 2 years, cashflow for year 3 can be re-invested for 1 year and cashflow for year 4 can be re-invested for 0 year.

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Presented here are liability items for Skysong, Inc. at December 31, 2017. Accounts payable $298,300 FICA taxes payable $14,820
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Answer:

Explanation:

The preparation of the liabilities section of Skysong's balance sheet is shown  below:

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Discount on bonds payable           $77,900

Total Non -Current Liabilities                                 $1,939,900

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7 0
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Berkshire Inc. uses a periodic inventory system. At the end of 2017, it missed counting some inventory items, resulting in an in
ziro4ka [17]

Answer:

d. Assets understated by $670.000, liabilities understated by $234,500 and shareholders' equity understated by $435,500

Explanation:

Assets in Inventory will be understated by $670.000, this will also understate the tax payable to authorities by $234,500 because profits will be understated and equity will be understated by $435,500.

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A cost associated with renting would be:
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A group formed by people seeking friendship or pursuing common interests that has no official leader or specific organizational
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Answer:

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I hope you find this information useful and interesting! Good luck!

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