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Yakvenalex [24]
3 years ago
12

project water has an initial cost of 639,700 and projected cash flow of 288,000 319,000 and 165,000 for years 1 through 3 respec

tevely project aqua has an initial cost of 411,200 and projected cash flows of 186,000 178,000 and 145,000 for years 1 through 3 respectevely what is the incremental IRR of these two mutually exclusive project
Business
1 answer:
Hatshy [7]3 years ago
5 0

Answer:

IRR = 8.77%

Explanation:

Internal rate of return is the discount rate that equates the after-tax cash flows from an investment to the amount invested

IRR can be calculated with a financial calculator  

Incremental IRR can be determined by subtracting the cash flows of the project with the smaller cost from the cash flows of the project with the higher initial cost

Incremental cash flows

Cash flow in year 0 = 639,700 -  411,200 = -228,500

Cash flow in year 1 = 288,000 -  186,000 = 102,000

Cash flow in year 2 = 319,000 - 178,000 = 141,000

Cash flow in year 3 =  165,000 -  145,000 = 20,000

IRR = 8.77%

 

To find the IRR using a financial calculator:

1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.

2. After inputting all the cash flows, press the IRR button and then press the compute button.  

3. Press compute

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Mr. Hopper expects to retire in 30 years, and he wishes to accumulate $1,000,000 in his retirement fund by that time. If the int
Karo-lina-s [1.5K]

Answer:

Annual deposit = $4100

Explanation:

Annual deposit = $4100

Number of years for retirement = 30 years

Future value of money = $1000000

Interest rate = 12%

Now use the below formula to find the annuity amount.

Annual deposit = Future value (A/F, r, n)

Annual deposit = 1000000 (A/F, 12%, 30)

Annual deposit = 1000000(0.0041)

Annual deposit = $4100

3 0
3 years ago
Which of the following types of inventory describes inventory that has been purchased but not​ processed?
PtichkaEL [24]

Answer:

A. raw material inventory

Explanation:

Inventory materials are basically of 3 types namely; Raw materials, semi-finished goods and finished goods.

Raw materials are inventory materials yet to be processed. It is usually referred to as material cost.

Inventory items that have been processed but yet to be finished are called semi finished goods. Such items are also called ​work-in-process inventory.

Finished goods are inventory items ready to be sold.

Based on the above statements, the right option is A. raw material inventory.

3 0
3 years ago
The Regal Cycle Company manufactures three types of bicycles—a dirt bike, a mountain bike, and a racing bike. Data on sales and
Cloud [144]

Answer: (1) From the income statement it is clear that the racing bike cannot meet its fixed cost because it cannot provide a contribution towards meeting the fixed cost (2) it should be discontinued since it cannot provide a contribution towards meeting its fixed cost (3)A Dirk bike has a profit of $26,700, A mountain bike has a profit of $39,600, A racing bike has a loss of ($25,000) Total profit for the product line is $41,300

Explanation:

Income statement

Dirk bike mountain bike. Racing bike. Total

$ $ $ $

Sales. 264,000. 407,000 256,000 927,000

Less :Variablecost 114,000. 200,000 157,000. 471,000

----------- -------------- ------------- ------------

Contribution margin 150,000 207,000 99,000 456,000

Less: Fixed cost

Fixed Advertising. 8,900. 40,300. 20,400 69,600

Depreciation of equipment 20,700 7,300 15,900 43,900

Salary of product line manager 40,900. 38,400 36,500 115,800

Allocated common fixed expenses 52,800 81,400 51,200. 185,400

----------- ------------- ---------- -------------

Total Fixed Expenses 123,300 167,400. 124,000 414,700

Net operating income(loss) 26,700 39,600 (25,000) 41,300

(1) From the income statement it is clear that racing bike cannot meet its fixed cost because it cannot provide contribution towards meeting its fixed cost

(2) it should be discontinued since it cannot provide a contribution towards meeting its fixed cost

(3) A Dirk bike has a profit of $26,700, A mountain bike has a profit of $39,600, A racing bike has a loss of ($25,000) Total profit for the product line is $41,300

7 0
3 years ago
Anthony’s rate of pay is $8.36 per hour. Last week, Anthony worked 33 hours, What is the gross pay for the week for Anthony?
velikii [3]
First to get the answer your self all you need to do is divide 7 in to how many hours then boom you got the answer
3 0
3 years ago
Laurel, Inc., and Hardy Corp. both have 6 percent coupon bonds outstanding, with semiannual interest payments, and both are curr
stealth61 [152]

Answer:

A. If interest rates suddenly rise by 2 percent, what is the percentage change in the price of these bonds?

Laurel, Inc. = -8.11%

Hardy Corp. = -18.91%

B. If interest rates were to suddenly fall by 2 percent instead, what would the percentage change in the price of these bonds be then?

Laurel, Inc. = +8.98%

Hardy Corp. = +25.49%

Explanation:

bonds with 6% semiannual coupons, sold at par $1,000

Laurel, Inc. bond maturity in 5 years

Hardy Corp. bond maturity in 18 years

the current price of a bond is the sum of the present value of its face value and coupons. I will use an annuity table to calculate PV of face value and an ordinary annuity table for the coupons:

Laurel, Inc.

market rate 4% = ($1,000 x 0.8203) + ($30 x 8.9826) = $820.30 + $269.48 = $1,089.78, % change = 89.78/1,000 = 8.98%

market rate 8% = ($1,000 x 0.6756) + ($30 x 8.1109) = $675.60 + $243.33 = $918.93, % change = -81.07/1,000 = -8.11%

Hardy Corp.

market rate 4% = ($1,000 x 0.4902) + ($30 x 25.489) = $490.20 + $764.67 = $1,254.87, % change = 254.87/1,000 = 25.49%  

market rate 8% = ($1,000 x 0.2437) + ($30 x 18.908) = $243.70 + $567.24 = $810.94, % change = -189.06/1,000 = -18.91%  

3 0
3 years ago
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