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Lerok [7]
2 years ago
14

The Pan American Bottling Co. is considering the purchase of a new machine that would increase the speed of bottling and save mo

ney. The net cost of this machine is $56,000. The annual cash flows have the following projections. Use Appendix B and Appendix D for an approximate answer but calculate your final answer using the formula and financial calculator methods.
Year Cash Flow
1 $23,000
2 23,000
3 25,000
4 28,000
5 16,000

Required:
a. If the cost of capital is 10 percent, what is the net present value of selecting a new machine?
b. What is the internal rate of return?
Business
1 answer:
yawa3891 [41]2 years ago
6 0

Answer and Explanation:

The computation is shown below;

a. the net present value is

Year   cash flow        factor at 10%     Discounted cash flows

0         -$56,000         1                         $56,000

1           $23,000         0.9091               $20,909.09

2         $23,000          0.8264              $19,008.26

3         $25,000         0.7513                 $18,782.87

4         $28,000         0.6830               $19,124.38

5        $16,000          0.6209               $9,934

Net present value                               $31,759.34

b. The internal rate of return is

Here we apply the formula

= IRR()

After this, the irr is 30.75%

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Answer:

b. employee job satisfaction

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6 0
3 years ago
What is the average of gross income for domestic movies (in mln)?
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The average gross income for domestic movies (in mln) is 180

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Most of the Weekly Loss is weekend cashiers. Historically, this has been reported as box office revenue from Friday to Sunday, and holidays close to weekends. Day numbers from Friday to Sunday are also now used.

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5 0
1 year ago
The budgeted income statement presented below is for Burkett Corporation for the coming fiscal year. If Burkett Corporation achi
nata0808 [166]

Answer:

Margin Of Safety= $275,862

Explanation:

We can calculate the margin of safety easily by the formula given below

Formula: Margin of safety = Budgeted sales - Breakeven sales

As breakeven sales are not given in the data Firstly we need to find out break even sales in order to calculate margin of safety

Breakeven sales=  \frac{Total fixed cost}{Contribution margin ratio}

As you can see in the data fixed cost s given but contribution margin ratio is not

Contribution margin(Sales revenue - All variable cost)= $1,000,000 - ($270,000 + $240,000 + $150,000 + $50,000) = $1,000,000 - $710,000 = $290,000

Sales price per unit = Total sales/Number of units sold

Sales price per unit=  $1,000,000/50,000 = $20

Budgeted contribution margin= $290,000/50,000 = $5.80

Contribution margin ratio = Budgeted contribution margin per unit/Sales price per unit

Contribution margin ratio = $5.80/$20 = 29%

Lets put values in breakeven formula to find breakeven sales

Breakeven sales=  \frac{Total fixed cost}{Contribution margin ratio}

Breakeven sales=\frac{210000}{0.29}

Breakeven sales= $724,138

Now we have both budgeted sales and breakeven sales, we can  easily calculate e of safety

Margin of safety = $1,000,000- $724,138

Margin of safety = $275,862

7 0
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SSSSS [86.1K]

Answer:

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Pretend you have $10 and something you want is $10 it is easier to buy it when the value of money is higher and if the money is lower than it'll be harder to get $10 to buy the item you want

7 0
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