Answer and Explanation:
The computation of the MIRR is shown below:
But before that terminal cash flow required to calculate
<u> Year Cash Flows FV Factor Formula Terminal Value </u>
<u> (Cash Flow × FV Factor) </u>
0 ($1,000)
1 $450 1.21 (1 +10%)^(2) $545
2 $450 1.1 (1 + 10%)^(1) $495
3 $450 1 1 $450
Terminal Cash Flow $1,490
now the MIRR is
= 14.22%
As it can be seen that the MIRR is more than the WACC so the project should be accepted.
Answer:
1) C=C1+C2...+Cn
2) A=A1+A2...+An
3) Explanation is in the description
Explanation:
First, we have that the information given is incomplete. We need the information of the manufacturing overhead of Orlando Enterprises. Then, we are going to work on the problem without any specific data and give a general answer that will serve for any such data.
The attached table shows a way to represent the information of the manufacturing expenses, where the left column represents the current costs and the right column the allocated costs.
1) Current manufacturing overhead is then given by:
C=C1+C2...+Cn
2) 2) The allocated manufacturing overhead is given by:
A=A1+A2...+An
3) Finally, to determine if manufactured overhead is underallocated or overallocated:
X=C-A
If x>0, the manufactured overhead is udercalled.
