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schepotkina [342]
3 years ago
10

Purple Turtle Group is analyzing a project with the following cash flows: Year Cash Flow 0 -$795,000 1 $375,000 2 $-500,000 3 $6

00,000 4 $400,000 This project has cash flows. Purple Turtle Group’s WACC is 5.50%. Calculate this project’s modified internal rate of return (MIRR).
Business
1 answer:
Phantasy [73]3 years ago
6 0

Answer:

MIRR = 4.32%

Explanation:

year           cash flow

0               -$795,000

1                 $375,000

2               -$500,000

3                $600,000

4                $400,000

Since there are 2 cash outflows, the IRR calculation would result in two different answers (1 for every cash outflow), that is why we use the MIRR function in excel.

=MIRR (cash flows, finance rate, reinvestment rate)

=MIRR (-795000 to 400000, 5.5%, 5.5%)

Since we are only given one interest rate, we will use it as our finance rate and our reinvestment rate.

MIRR = 4.32%

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Liz Mulig earns 52,000 per year as a philosophy professor. She receives a raise of 2.5% in a year in which CPI increases by 3.8%
Sindrei [870]

Answer:

She lost $754.05.

Explanation:

Giving the following information:

Liz Mulig earns 52,000 per year as a philosophy professor. She receives a raise of 2.5% in a year in which CPI increases by 3.8%.

<u>The rise in her salary allows her to increase her purchasing power. On the contrary, inflation decreases purchasing power. We need to calculate the differences between both effects and determine whether she can buy more or less.</u>

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Increase in salary= 52,000*1.025= $53,300

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3 years ago
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4 years ago
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On January 1, 2021, the general ledger of TNT Fireworks includes the following account balances:
ivolga24 [154]

Answer:

TNT Fireworks

1. Adjusting Entries on January 31:

Accounts                              Debit         Credit

a. Depreciation Expense     $375

Accumulated Depreciation                $375

b. Uncollectible Expense   $5,620

Allowance for Uncollectible Accounts $5,620

c. Accrued interest revenue $120

Interest Revenue                                 $120

d. Salaries Expense           $34,000

Salaries payable                                 $34,000

e. Income Tax Expense     $10,400

Income tax payable                            $10,400

2. Adjusted Trial Balance as of January 31, 2021:

Accounts                              Debit         Credit

Cash                                   $ 2,600

Accounts Receivable       238,400

Allowance for Uncollectible Accounts $9,220

Inventory                            12,600

Notes Receivable

(5%, due in 2 years)        28,800

Land                                169,000

Equipment                       20,900

Accumulated Depreciation                      375

Depreciation Expense         375

Salaries Expense           65,200

Utilities Expense             17,900

Income Tax Expense     10,400

Uncollectible Expense   5,620

Accounts Payable                             102,200

Salaries Payable                                34,000

Income Taxes Payable                      10,400

Common Stock                              234,000

Retained Earnings                           69,600

Sales Revenue                              234,000

Interest Revenue                                  120

Accrued Interest

Receivable                      120

Cost of Goods Sold 122,000

Total                      $693,925  $693,915

3. Multi-step Income Statement for the period ended January 31, 2021:

Sales Revenue                              234,000

Cost of goods sold                        122,000

Gross profit                                  $112,000

Interest Revenue                                 120

Total revenue                              $112,120

Depreciation Expense         375

Salaries Expense           65,200

Utilities Expense             17,900

Uncollectible Expense   5,620  $89,095

Income before tax                      $23,025

Income Tax Expense                    10,400

Net Income                                 $12,625

Retained Earnings, January 1     69,600

Retained Earnings, January 31 $82,225

4. Classified Balance Sheet as of January 31, 2021:

Assets:

Cash                                                   $ 2,600

Accounts Receivable       238,400

Uncollectible Accounts       9,220   229,180

Accrued Interest Receivable                   120

Inventory                                             12,600

Current assets                              $244,500

Notes Receivable

(5%, due in 2 years)         28,800

Land                                  169,000

Equipment            20,900

Accumulated Dep.     375 20,525  218,325

Total assets                                  $462,825

Liabilities:

Accounts Payable           102,200

Salaries Payable               34,000

Income Taxes Payable     10,400 $146,600

Equity:

Common Stock             234,000

Retained Earnings          82,225  $316,225

Total liabilities and Equity           $462,825

5. Closing Journal Entries:

Accounts                              Debit         Credit

Income Summary             $221,495

Depreciation Expense                                  375

Salaries Expense                                    65,200

Utilities Expense                                      17,900

Income Tax Expense                              10,400

Uncollectible Expense                             5,620

Cost of Goods Sold                             122,000

To close temporary accounts to the income summary.

Sales Revenue                 234,000

Interest Revenue                     120

Income Summary                              $234,120

To close temporary accounts to the income summary.

Cash                                   $ 2,600

Accounts Receivable       238,400

Inventory                             12,600

Notes Receivable

(5%, due in 2 years)         28,800

Accrued Interest

Receivable                             120

Land                                169,000

Equipment                       20,900

Allowance for Uncollectible Accounts $9,220

Accumulated Depreciation                        375

Accounts Payable                               102,200

Salaries Payable                                   34,000

Income Taxes Payable                         10,400

Common Stock                                 234,000

Retained Earnings                              82,225

To close permanent accounts to the balance sheet.

Explanation:

a) Data and Calculations:

Accounts                              Debit         Credit

Cash                                 $ 60,100

Accounts Receivable         27,800

Allowance for

 Uncollectible Accounts                       $ 3,600

Inventory                            37,700

Notes Receivable

 (5%, due in 2 years)        28,800

Land                                 169,000

Accounts Payable                                  16,200

Common Stock                                   234,000

Retained Earnings                                69,600

Totals                          $ 323,400   $ 323,400

See workings attached.

Download docx
8 0
3 years ago
according to adam smith, the process that turns self-directed gain into social and economic benefits for all is the
Semmy [17]

Answer:invisible hands

Explanation:

6 0
2 years ago
Beautiful Lawns Company estimates its doubtful accounts by aging its accounts receivable and applying percentages to various age
mr_godi [17]

Answer:

$3,000

Explanation:

Calculation to determine How much bad debts expense will Beautiful Lawns report in 2016

Using this formula

Bad debts expense=Estimated doubtful accounts -Allowance for Doubtful Accounts credit balance

Let plug in the formula

Bad debts expense=$3,600-$600

Bad debts expense=$3,000

Therefore The amount of bad debts expense that Beautiful Lawns will report in 2016 is $3,000

8 0
3 years ago
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