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choli [55]
3 years ago
11

Your boss is considering a 5-year investment project. If the project is accepted, it would require an immediate spending of $678

to buy all necessary production equipment. This equipment would be sold at the end of the project and bring your company estimated $144 in sale proceeds after taxes (or after-tax salvage value). Your boss's consulting team estimated that the annual after-tax profits (or operating cash flows) would equal $173. The team also recommends immediately setting aside $58 in cash to cover any unforeseen expenses. The required annual rate of return is 8.1%.
Calculate the Net Present Value of this proposed investment project. (Do NOT use "S" in your answer. Increase decimal places for any intermediate calculations, from the default 2 to 6 or higher. Only round your answer to TWO decimal places. For example, 1,000,23 or -1,000.23) Focus E- 17 786 words English (United States)
Business
1 answer:
marusya05 [52]3 years ago
7 0

Answer:

$50.47

Explanation:

Net present value is the present value of after-tax cash flows from an investment less the amount invested.  

NPV can be calculated using a financial calculator  

Cash flow in year 0 = - ($678 +  $58 ) = -736

Cash flow in year 1 - 4 = $173

Cash flow in year 5 = $173 + $144

I = 8.1

NPV = 50.47

To find the NPV using a financial calculator:

1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.

2. after inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.  

3. Press compute  

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Peavey enterprises purchased a depreciable asset for $28,500 on april 1, year 1. the asset will be depreciated using the straigh
ddd [48]
<span>Answer is $17,325. Since the salvage value of the asset after its four years of useful life is $3,300 while its current purchase value is $28,500; we need to depreciate the difference over 4 years. That us $25,200 to be depreciated over 4 years using a straight line method. At December 31 of year 3, the asset will be 2.75 years old(2 years, 9 months). Hence the accumulated depreciation is $25,500*(2.75/4). This is $17,325.</span>
4 0
3 years ago
Suppose you have won a free ticket to see a Bruce Springsteen concert. This ticket has no resale value. Also suppose that U2 has
steposvetlana [31]

Answer: $72

Explanation:

Opportunity cost is the cost incurred or benefit foregone by selecting some other alternative which gives the some level of satisfaction.

It is totally depend upon the preferences of the consumers or individuals.

The opportunity cost of seeing Bruce Springsteen is $72(= $134 - $62) that is the difference between actual ticket price and willing to pay for U2 concert.

4 0
3 years ago
A certain city reports the following year-end total assets: General Fund $18,400,000 Library Fund (a special revenue fund) 2,900
kolbaska11 [484]

Answer:

B) General Fund and Library Fund

Explanation:

Major funds are those that include revenues, assets, expenditures and liabilities that account for at least 10% of all the government funds.

In this case the total government funds = $26,300,000

so 10% of total funds = $26,300,000 x 10% = $2,630,000

only the general fund ($18,400,000 ≥ $2,630,000) and the library fund (2,900,000 ≥ $2,630,000) are higher than the 10% threshold.

4 0
3 years ago
Read 2 more answers
Tarazzz Company manufactures computers. The following cost information for the manufacture of one computer has been compiled. Di
zalisa [80]

Answer:

Company net income will DECREASE by $2,000 if the order is accepted.

Explanation:

Company net income will DECREASE by $2,000 if the order is accepted.

Additional order will produce additional sales revenue of $150 per unit

The marginal cost for this order = Variable costs (Direct material + Direct labour + variable cost) =$152 per unit

Since the marginal cost ($152) is more than the revenue ($150)per unit, there will be a loss of $2 per unit.

So the net income of the company will DECREASE by $2000 ($2x 1000)

3 0
3 years ago
The following cost data pertain to the operations of Montgomery Department Stores, Inc., for the month of July. Corporate legal
deff fn [24]

Answer:

1.$134,000

2.$183,800

3.$124,050

Explanation:

1. Computation for the total amount of the costs that are direct costs of the Apparel Department

Apparel Department cost of sales - Evendale store $116,100

Apparel Department sales commission-Evendale store $7,950

Apparel Department manager's salary-Evendale store $9,950

Total direct costs for the Apparel Department

$134,000

2. Computation for the total amount of the costs that are direct costs of the Evendale Store

Apparel Department cost of sales - Evendale store $116,100

Store managers salary - Evendale store $18,300

Apparel Department sales commission-Evendale store $7,950

Store utilities - Evendale store $17,800

Janitorial costs - Evendale store $13,700

Apparel Department manager's salary-Evendale store $9,950

Total direct cost for the Evendale store $183,800

3. Computation for the total amount of the Apparel Department's direct costs that are variable costs with respect to total departmental sales

Apparel Department cost of sales - Evendale store $116,100

Apparel Department sales commission-Evendale store $7,950

Total variable cost-Apparel department $124,050

6 0
2 years ago
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