Physical Trauma
Loud noise
Loss of a loved one
Answer:
DR Cash................................................ $172.8
0
DR Credit card expense.......................$7.2
0
CR Sales.................................................................... $180
Explanation:
The bank will deduct a service charge of 4% before remitting the money so;
Cash = 180 * ( 1 - 0.04)
= $172.80
Credit Card expense
= 180 - 172.80
= $7.20
If the company requires a return of 10 percent for such an investment, calculate the present value of the project.
The present value of the project is $72349.51.
Since we consider only incremental cash flows for a project, we consider $21,600 for year one and calculate a 4% increase for each of the additional years.
We then calculate the Present Value Interest Factor (PVIF) at 10% for four years using the formula :
PVIF = 1 / [(1+r)^n]
Next, we find the product of the respective cash flows and PVIF for each year.
Finally, we find the total of the discounted cash flows for the four years to find the Present Value of the project.
Answer:
Location 1
Payback period
= Cash outflow/Cash inflow
= $255,000/$51,000
5 years
Location 2
Year Cashflow Cumulative cashflow
$ $
0 (255,000) (255,000)
1 82,000 (173,000)
2 61,000 (112,000)
3 41,000 (71,000)
4 33,000 (38,000)
5 20,000 (18,000)
6 18,000 0
7 89,000
8 64,000
Payback period = 6 years
Explanation:
In location 1, we will divide the initial outlay by the annual cash inflows in order to obtain the payback period since the cash inflows are constant
In location 2, we deduct the initial outlay from the cashflow for each year until the cash inflow is fully recovered.
Answer:
b. $1,730,000
Explanation:
Pension expense = $ervice cost component + Opening projected benefit obligation*settlement rate - Opening pension assets*Expected rate of return + Amortization of prior service cost
= $890,000 + ($11,400,000*0.10) - ($6,000,000*0.08) + $180,000
= $890,000 + $1,140,000 - $480,000 + $180,000
= $1,730,000
