Answer:
The answer is B. $66,000
Explanation:
What are the items under investing activities of cash flow? - Sale and purchase of long-term assets or non-current assets. Purchase is an outflow while sale is an inflow.
The book value of the sold equipment was $55,000 and gain was $11,000. Therefore the equipment was sold for:
$55,000 + $11,000
=$66,000.
So there was an inflow of $66,000.
The $11,000 gain will be shown under operating section of the cash flow.
If the bank is now in a position to extend additional loans of $8,000. The legal reserve requirement is: 20 percent.
<h3>Legal reserve requirement</h3>
Using this formula
Legal reserve requirement=( Demand deposit -Additional loans/Demand deposit
Let plug in the formula
legal reserve requirement=($10,000-$8,000)/$10,000
Legal reserve requirement=$2,000/$10,000×100
legal reserve requirement=20%
Therefore the legal reserve requirement is: 20 percent.
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Answer:
A. NPV for A= $61,658.06
NPV for B = $25,006.15
B. 1.36
1.17
Project A
Explanation:
Net present value is the present value of after tax cash flows from an investment less the amount invested.
NPV can be calcuated using a financial calculator
for project A :
Cash flow in
Year 0 = $(172,325)
Year 1 41,000
Year 2 47,000
Year 3 85,295
Year 4 86,400
Year 5 56,000
I = 10%
NPV = $61,658.06
for project B
year 0 = $ (145,960)
Cash flow in
Year 1 27,000
Year 2 52,000
Year 3 50,000
Year 4 71,000
Year 5 28,000
I = 10%
NPV = $25,006.15
profitability index = 1 + NPV / Initial investment
for project A, PI = $61,658.06 / 172,325 = 1.36
For project B, PI = $25,006.15 / 145,960 = 1.17
The project with the greater NPV and PI should be chosen. this is project A.
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
Answer:
The percentage change in quantity demanded is exactly equal to the percentage change in price. The percentage change in quantity demanded is exactly equal to the percentage change in price.
