The expression, "there's no such thing as a free lunch" implies that:

Chapman Machine Shop is considering a 4-year project to improve its production efficiency. Buying a new machine press for $576,0

DIA [1.3K]

Answer:

The Firm should not Buy and Install the press as it delivers a negative NPV of -$24,924 at 11% discount rate over its 4 year operations

Explanation:

The General rule is to appraise the investment based on various appraisal techniques.

A technique that should be considered must have special focus on the time value of money, the required rate of returns expected by the firm and other Cashflow considerations.

The Net Present Value (NPV) approach will be the best method to proceed with.

The NPV approach typically falls under the following decision tree:

a. If NPV is negative (Reject the proposal)

b. If NPV is positive (Accept if it's a singular project, Accept the highest positive NPV if it's for mutually exclusive Projects)

c. If Zero (this is the breakeven line at which the Project covers all its cost but does not return a profit.) Also referred to as the IRR

Kindly refer to the attached for detailed workings

6 0

3 years ago

A 4.30 percent coupon municipal bond has 15 years left to maturity and has a price quote of 97.85. The bond can be called in fou

yanalaym [24]

Answer:

Bond's Current Yield 4.39%

Explanation:

The bond's current yield is calculated as below:

Bond's Current Yield = Annual Coupon Payment/Current Bond Price*100

Substituting values in the above formula, we get,

Bond's Current Yield = (100*4.30%)/97.85*100 = 4.39%

6 0

2 years ago

The income statement is reconstructed on a cash basis from top to bottom when the ________ method is used to prepare the operati

Elodia [21]

Answer:

Direct method

Explanation:

There are three types of activities in the cash flow statement under the direct method

1. Operating activities: It records those transactions which are related to the cash receipts and cash payments.

Like:

Cash flow from Operating activities

Collections from customers

Less: Cash paid to suppliers and employees

Less: Interest and taxes paid

Net Cash flow from Operating activities

2. Investing activities: It records those activities which include purchase and sale of the long term assets

3. Financing activities: It records those activities which affect the long term liability and shareholder equity balance.

4 0

3 years ago

A poll asked adults in a certain country whether immigration was a good thing or a bad thing for the country. out of 10871087 r

Lubov Fominskaja [6]

A

395395/10871087 x 100%= 3.64% of people said it was a good thing

7 0

2 years ago

An accountant agreed to perform a compilation of a company's financial statements under Statements of Standards for Accounting a

LekaFEV [45]

Answer: The following would the accountant do related to the compilation engagement: Issue a compilation report even though review procedures were performed on the engagement.

Under Statements of Standards for Accounting and Review Services (SSARS), the accountant decided to perform some analytical procedures.

Therefore, the correct option is (d)

5 0

2 years ago