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Yakvenalex [24]
2 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]2 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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Performance Products Corporation makes two products, titanium Rims and Posts. Data regarding the two products follow: Direct Lab
alina1380 [7]

Answer:

Machine setups= $173.8 per setup

Special processing= $136.67 per machine hour

General factory= $13 per direct labor hour

Explanation:

<u>To calculate the activities cost rates, we need to use the following formulas:</u>

Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base

Machine setups= 34,760 / 200= $173.8 per setup

Special processing= 136,670 / 1,000= $136.67 per machine hour

General factory= 819,000 / 63,000= $13 per direct labor hour

5 0
2 years ago
Martinez, Inc. reported net income of $2.5 million in 2007. Depreciation for the year was $160,000, accounts receivable decrease
n200080 [17]

Answer:

$2,730,000

Explanation:

Operating activities: It includes those transactions which affect the working capital after net income. The increase in current assets and a decrease in current liabilities would be deducted whereas the decrease in current assets and an increase in current liabilities would be added.  

These changes in working capital would be adjusted. Moreover, the depreciation expense is added to the net income

The preparation of the Cash Flows from Operating Activities—Indirect Method is shown below:

Cash flow from Operating activities - Indirect method

Net income $2,500,000

Adjustment made:

Add : Depreciation expense $160,000

Add: Decrease in accounts receivable $350,000

Less: Decrease in accounts payable -$280,000

Total of Adjustments $230,000

Net Cash flow from Operating activities             $2,730,000

8 0
2 years ago
An investor purchased 50 shares of stock in a company in 2015. At the time the investor purchased the stock, the value of the st
frutty [35]

Answer:

$75

Explanation:

$5 to $6.5 is a 1.3% increase and if the investor bought 50 shares of $5 he bought a total of $250 worth of stock. If you multiply the $250 by 1.3% it will be $325. But the question asks for the capital gain so you would subtract $325 and $250 which is $75.

3 0
2 years ago
On a timeline, a goal that will be achieved in __________ years will be to the right of one that will be achieved in __________
kari74 [83]

Answer: D. 14;10

Explanation: The answer is D. 14;10 because a date to the right on a number line is older. This means that the first number has to be larger than the second number, and only D has this.

7 0
2 years ago
Read 2 more answers
In its​ year-end income​ statement, Black Knights Company reported cost of goods sold of​ $450,000. Changes occurred in several
torisob [31]

Answer:

The answer is $330,000

Explanation:

Cash paid to suppliers is the total amount of cash paid to its creditors.

We can find that through:

Cost of sold

Minus: Decrease in inventory

Plus: Decrease in accounts payable

=Cash paid to suppliers.

Now let's start:

Cost of sold - $450,000

Decrease in inventory - $160,000

Decrease in accounts payable- $40,000

$450,000 - $160,000 + $40,000

=$330,000

Therefore, Cash paid to suppliers is $330,000

5 0
2 years ago
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