1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Zinaida [17]
3 years ago
11

The Lunch Counter is expanding and expects operating cash flows of $32,500 a year for seven years as a result. This expansion re

quires $28,000 in new fixed assets. These assets will be worthless at the end of the project. In addition, the project requires $2,800 of net working capital throughout the life of the project. What is the net present value of this expansion project at a required rate of return of 14 percent
Business
1 answer:
storchak [24]3 years ago
8 0

Answer:

$109,688.89

Explanation:

According to the scenario, computation of given data are as follows,

Formula for Net present value are as follows,

NPV = -Investment in fixed asset - Net working Capital + Operating cashflow × ( 1 - (1+r)^{-n}) ÷ r + Net working capital ×(1+r)^{-n}

Where, r = rate of return

n = number of years

By putting the value, we get

NPV = -28,000 - 2,800 + 32,500 × ( 1 - (1+0.14)^{-7}) ÷ 0.14 + 2,800 × (1+0.14)^{-7}

By solving the above equation, we get

NPV = $109,688.89

You might be interested in
The December 31, 2009, balance sheet of Anna’s Tennis Shop, Inc., showed current assets of $2,584 and current liabilities of $1,
Igoryamba

Answer: ($203)

Explanation:

The company’s 2010 change in net working capital will be calculated thus:

Net working capital = current assets - current liabilities

For 2009, net working capital will be:

= $2,584 - $1,191

= $1393.

For 2010, net working capital will be:

= $2,644 - $1,048

= $1596

Change in net working capital will be:

= $1393 - $1596

= ($203)

6 0
3 years ago
Suppose you deposit $116 today, $135 in one year, and $885 in two years in an account that pays an annual rate of interest of 14
olga nikolaevna [1]

Answer:

The answer is $1357.85

Explanation:

Future value= Σ C(1+i)^n

FV = 116(1.141^3) + 135( 1.141^2) + 885(1.141) = $1357.85

7 0
2 years ago
What does the quantity theory speculate about the cause of inflation?
Gala2k [10]
Well the quantity theory is "The hypothesis that changes in prices correspond to changes in the monetary supply" so when inflation happens the price will increase but when that happens the purchases and the value of money will decrease so will its demand. That's the speculation that the prices will not correspond to the monetary supply  
5 0
3 years ago
A salesperson earns $350.25 per week plus 12% of her weekly sales. Which of the following describes the sales necessary for the
Natali5045456 [20]
The equation for problem above is:
350.25+12/100*x=800.5
12/100*x=800.5-350.25
12/100*x=450.25
12x=45025
x=45025/12=3752.08

But the question is "at <span>least" $800.50 so the final answer is

</span>x \geq 3752.08<span>
</span>
3 0
3 years ago
Carol Byrd gets a student rate of $30.00 a month for health insurance. There is a $250 deductible. She recently received treatme
e-lub [12.9K]

The company's payment = $1640,

Carol's total cost = $410.

<u>Step-by-step </u>

<u>Given:</u>

Bill amount = $2300

Amount of deductible = $250

Remaining amount is given by:

                                           =$2300-$250

                                          =$2050

Since Carol's insurance company provided paid 80% of the bill less the deductible.

So, the Company's Payment is given by:

Company Pays 80% which translates to 0.8

       Company Payment   = 0.8*2050

       Company Payment  = $1640

Carol's total cost after the payment of company is given by

                      Carol pays  = $2050 - $1640

                      Carol pays = $410

Hence, the company's payment was $1640, Carol's total cost was $410.

Learn more about Insurance on:

brainly.com/question/25855858

#SPJ4

8 0
2 years ago
Other questions:
  • "at the clearing house, bank x has $300 in checks drawn on bank y and bank y has $200 in checks drawn on bank x. how does the cl
    12·1 answer
  • Chica, a women's clothing store, held a "prize drawing" for a $500 shopping spree on saturday that it had advertised throughout
    14·1 answer
  • This type of restaurant has a relatively large number of employees per customer
    9·2 answers
  • 2) If a country, like the US, can produce all of the goods and services needed by
    14·1 answer
  • Jill’s business has current assets of $50,000 and current liabilities of $25,000. Which statement is true about the company’s cu
    13·1 answer
  • David Ortiz Motors has a target capital structure of 45% debt and 55% equity. The yield to maturity on the company's outstanding
    7·1 answer
  • Current operating income for Bay Area Cycles Co. is $74,000. Selling price per unit is $120, the contribution margin ratio is 30
    15·1 answer
  • Shaw Industries purchased a large piece of equipment from Charles Company on January 1, 2014. Shaw industries signed a note, agr
    9·1 answer
  • Broker A is involved in an exclusive right to sell listing with his seller client, Seller S. After receiving the property condit
    5·1 answer
  • For each cost item, indicate whether it would be variable or fixed with respect to the number of units produced and sold; and th
    8·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!