Intellectual property laws deal with

The management of Nebraska Corporation is considering the purchase of a new machine costing $490,000. The company's desired rate

ankoles [38]

Answer:

The payback period is more than 5 years

Explanation:

Net present value is the Net value of all cash inflows and outflows in present value term. All the cash flows are discounted using a required rate of return.

Year Cash flow PV factor Present Value

0 ($490,000) 1 ($490,000)

1 $40,000 0.909 $36,360

2 $10,000 0.826 $8,260

3 $120,000 0.751 $90,120

4 $90,000 0.683 $61,470

5 $180,000 0.621 $111,780

Net Present Value ($182,010)

NPV of this Investment is negative so, it is not acceptable.

Payback period

Total Net cash inflow of the investment is $440,000 and Initial investment is $490,000. This investment will take more than 5 years to payback the initial investment.

6 0

3 years ago

On January 2, 2015, Moser, Inc., purchased equipment for $100,000. The equipment was expected to have a $10,000 salvage value at

OLEGan [10]

Answer:

a. Debit Depreciation expense $6,400

Credit Accumulated depreciation $6,400

b. $33,600

Explanation:

Depreciation is the systematic allocation of cost to an asset. It is given as

Depreciation = (Cost - salvage value)/estimated life

When accumulated over time, it is known as accumulated depreciation which is deducted from the cost to get the carrying amount of the asset.

Depreciation

= (100000 - 10000)/6

=$15,000

Between 2015 and start of 2019 is 4 years hence

accumulated depreciation at start of 2019

= $15,000 × 4

= $60,000

Net book value = $100,000 - $60,000

= $40,000

If the asset life is to be extended by 3 years, the remaining useful life changes from 2 to 5 years.

New depreciation rate

= (40,000 - 8000)/5

= $6,400

To record this for 2019,

Debit Depreciation expense $6,400

Credit Accumulated depreciation $6,400

The book value of the equipment at the end of 2019

= $40,000 - $6,400

= $33,600

4 0

4 years ago

You are planning to save for retirement over the next 30 years. To do this, you will invest $750 per month in a stock account an

Alex

Answer:

The withdrawals will be of $ 11,379.014 per month

Explanation:

Future value of the annuities:

$C \times \frac{1-(1+r)^{-time} }{rate} = PV\\$

C 750.00

time 360(30 years x 12 monhs per year)

rate 0.008333333 (10% / 12 months)

$750 \times \frac{1-(1+0.00833)^{-360} }{0.008333} = PV\\$

PV $1,695,365.9436

$C \times \frac{(1+r)^{time} -1}{rate} = PV\\$

C 250.00

time 360 (30 years x 12 monhs per year)

rate 0.005 (6% / 12 months)

$250 \times \frac{(1+0.005)^{360} -1}{0.005} = PV\\$

PV $251,128.7606

Total 1,695,365.84 + 251,128.76 = 1.946.494,6‬

and from here we withdraw for 25 years:

$PV \div \frac{1-(1+r)^{-time} }{rate} = C\\$

PV 1,946,495

time 300 (25 years x 12 months)

rate 0.004166667 (5% / 12 months)

$1946494.6 \div \frac{1-(1+0.004167)^{-300} }{0.004167} = C\\$

C $ 11,379.014

6 0

3 years ago

MacDonald Products, Inc., of Clarkson, New York, has the option of (a) proceeding immediately with production of a new top-

Romashka-Z-Leto [24]

Answer:

The EMV for option a is $5,679,100

The EMV for option b is $5,719,200

Therefore, option b has the highest expected monetary value.

Explanation:

The EMV of the project is the Expected Money Value of the Project.

This value is given by the sum of each expected earning/cost multiplied by each probability.

So

a) proceeding immediately with production of a new top-of-the-line stereo TV that has just completed prototype testing.

There are these following probabilities:

77% probability of selling 100,000 units at $610 each.

23% probability of selling 70,000 units at $610 each.

So

$EMV = 0.77*E_{1} + 0.23*E_{2}$

$E_{1} = 100,000*610 = 6,100,000$

$E_{2} = 70,000*610 = 4,270,000$

$EMV = 0.77*E_{1} + 0.23*E_{2} = 0.77*(6,100,000) + 0.23*(4,270,000) = 5,679,100$

(b) having the value analysis team complete a study.

There are these following probabilities:

74% probability of selling 85,000 units at $720.

26% probability of selling 70,000 units at $720.

The cost of value engineering, at 120,000. So this value is going to be dereased from the EMV.

$EMV = 0.74*E_{1} + 0.26*E_{2} - 120,000$

$E_{1} = 85,000*720 = 6,120,000$

$E_{2} = 70,000*720 = 5,040,000$

$EMV = 0.74*E_{1} + 0.26*E_{2} - 120,000 = 0.74*6,120,000 + 0.26*5,040,000 - 120,000 = 5,719,200$

4 0

3 years ago

An investor will choose between Asset Q with an expected return of 6.5% and a standard deviation of 5.5%, Asset U with an expect

Alexxx [7]

Answer:

The investor will prefer asset U. So the correct answer is option D

Explanation:

To choose between these stocks, we will calculate the coefficient of variation (CV) which is used to assess the risk per unit of expected return. As most people are risk averse, we assume that the investor is risk averse. We will calculate the CV for all three investments and the stock having lowest CV will be selected.

Coefficient of Variation (CV)

Coefficient of Variation = standard deviation / expected return

Asset Q = 5.5% / 6.5% = 0.846

Asset U = 5.5% / 8.8% = 0.625

Asset B = 6.5% / 8.8% = 0.738

Thus, asset U has the lowest CV and the investor =, being a risk averse, will prefer asset U.

7 0

3 years ago