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Scrat [10]
3 years ago
6

An airline is considering a project of replacement and upgrading of machinery that would improve efficiency. The new machinery c

osts $350 today and is expected to last for 5 years with no salvage value. Straight line depreciation will be used. Project inflows connected with the new machinery will begin in one year and are expected to be $300 each year for 5 years and project outflows will also begin in one year and are expected to be $135 each year for 5 years. The corporate tax rate is 36% and the required rate of return is 8%. Calculate the project's net present value.
Business
1 answer:
Nikolay [14]3 years ago
6 0

Answer:

$172.25

Explanation:

initial outlay for the project = -$350

cash flow years 1-5 = [($300 - $135 - $70) x (1 - 36%)] + $70 (depreciation expense) = $60.80 + $70 = $130.80

using an excel spreadsheet and the NPV function, we can calculate the project's NPV with an 8% discount rate:

=NPV(8%,130.80,130.80,130.80,130.80,130.80) - $350 = $522.25 - $350 = $172.25

we can also do it manually:

NPV = -$350 + $130.80/1.08 + $130.80/1.08² + $130.80/1.08³ + $130.80/1.08⁴ + $130.80/1.08⁵ = $172.25

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Trout Lumber Yard has a current accounts receivable balance of $447,516. Credit sales for the year just ended were $8,105,305. a
musickatia [10]

Answer:

Trout Lumber Yard

a. The receivables turnover = Net Credit Sales/Average Receivables

= $8,105,305/$447,516

= 18 times per year

b. The Days' Sales in Receivables = Average Receivables/Credit Sales * 365

= $447,516/$8,105,305 * 365

= 20.15 days

c. On the average, it took 20.15 days (365/18.11) for credit customers to pay off their accounts during the past year.

Explanation:

a) Data and Calculations:

Accounts receivable balance = $447,516

Credit sales for the year just ended = $8,105,305

The receivables turnover = Net Credit Sales/Average Receivables

= $8,105,305/$447,516

= 18.11 times

The Days' Sales in Receivables = Average Receivables/Credit Sales * 365

= $447,516/$8,105,305 * 365

= 20.15 days

8 0
2 years ago
What budget item is NOT easy to lower if your salary is decreased?
zubka84 [21]
Well, insurance or taxes! :D
3 0
3 years ago
Jung believed that dreams and "visions"
tatiyna

Answer:

The Correct Option is C.

Explanation:

Vision is which a person see something either having a heavenly perspective or in the person or individual mind. Whereas the dream is what the person or individual see when the person or individual is asleep.

So, Jung believed that the dreams and the vision is important or vital form of communications from another domain.

6 0
3 years ago
Art invested $100 two years ago at 8 percent interest. The first year, he earned $8 interest on his $100 investment. He reinvest
nikitadnepr [17]

Answer:

Option 4- Interest on Interest

Explanation:

Look we earned $8 in the first year which we invested in the same business. Okay now we again earned 8% on this $100 and $8 invested in the second year. The 8% on the $8 is $0.64 which is the interest earned on the interest invested in the previous year.

4 0
3 years ago
W. L. Gore & Associates is organized in such a way that it has no formal job titles, job descriptions, or chains of command.
Harrizon [31]

Answer:

B) a decentralized structure.

Explanation:

In a decentralized organizational structure, many decision making responsibilities are delegated from upper management to middle and lower management. Most normal day-to-day decisions are made by entry level employees and lower management. The company's organizational structure is not rigid and most decisions can be made rather quickly.

5 0
3 years ago
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