Brad's Diner is expanding and expects operating cash flows of $32,000 a year for 4 years as a result. This expansion requires $3
1 answer:
Answer: $57,101.73
Explanation:
First find the present value of the cash inflows. The $32,000 is a constant payment so is an annuity. The net working capital will be realized at the end of the project as well.
Present value of cash inflows = (32,000 * Present value interest factor of an annuity, 4 years, 12%) + 3,000/ (1 + 12%)⁴
= (32,000 * 3.0373) + 1,906.55
= $99,101.73
NPV = Present value of inflows - Outflows
= 99,100.15 - (39,000 + 3,000)
= $57,101.73
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Answer:
annual depreciation expense = $6000
so correct option is d. $6,000
Explanation:
given data
machine costing = $40,000
transportation and installation = $1,000
useful life = 6 years
residual value = $5,000
to find out
How much is the annual depreciation expense
solution
we get here first Cost of machine that is
Cost = $40,000 + $1000
cost = $41000
so depreciable base will be here
Depreciable base = cost - residual value
Depreciable base = 41000 - 5000
Depreciable base = $36,000
so annual depreciation expense is
annual depreciation expense =
annual depreciation expense = $6000
so correct option is d. $6,000
Answer:
594 units
Explanation:
We must apply the logistics growth model, since applying linear or exponential growth will result in numbers which are much higher than the total production capacity of this facility. When we use the logistics growth model, the growth rate decreases as the resource limit approaches.
f(x) = c / (1 + ae⁻ᵇˣ)
initial value = c / (1 + a) = 240
600 = 240 + 240a
360 = 240a
a = 1.5
b = growth rate = (360 - 240) / 240 = 0.5
x = 5
e = 2.71828
f(x) = 600 / [1 + [1.5 x (2.71828⁻⁵) = 600 / 1.010106954 = 593.9965 = 594 units
