Answer:
The right solution is "31892.12".
Explanation:
The given values are:
Future value,
FV = $70,000
rate of return,
r = 14%
Time,
T = 6
Now,
The company afford to spend,
= [tex]\frac{FV}{(1+r)^T}[/tex]
On putting the given values, we get
= [tex]\frac{70000}{(1+14 \ percent)^6}[/tex]
= [tex]\frac{70000}{(1+0.14)^6}[/tex]
= [tex]\frac{70000}{(1.14)^6}[/tex]
= [tex]\frac{70000}{2.1949}[/tex]
= [tex]31892.12[/tex]
If the monopolist can engage in perfect price discrimination, what is the marginal revenue from selling the 5th shirt
Answer:
Hello your question is incomplete, the missing part is attached below
answer : $120
Explanation:
In a perfect price discrimination situation the price( revenue ) attached to the quantity of goods is = the marginal revenue gotten
From the attached table
The price for the quantity demanded ( 5 ) = marginal revenue
i.e. Marginal revenue from selling the 5th shirt = $120
Brand [X] has tasked you with looking at various KPIs for their recent campaign. Below are the results for the campaign. Using the provided KPI calculations, your own research and intuition.
Amount spent (USD) CPM Impression Clicks Click- Through Rate
Campaign Total $2783 $1.55 1,801,348 26,048 1.45%
Required:
Do you believe this campaign performed well?
Answer:
Yes, the campaign performed well.
Explanation:
Recent campaign by Brand X has performed really well. The results obtained are analyzed against the Key Performance Indicators set by the company. The amount spent on the campaign is $2783 whereas the Clicks per minute is $1.55 which indicates that customers are impressed by the campaign and they are gaining attraction in the campaign details so the CPM impression is high.
Condensed balance sheet and income statement data for Jergan Corporation are presented here.
Jergan Corporation
Balance Sheets
December 31
2020 2019 2018
Cash $ 30,600 $ 17,300 $ 17,300
Accounts receivable (net) 50,900 44,500 48,600
Other current assets 90,100 94,800 64,900
Investments 54,700 70,600 44,600
Plant and equipment (net) 500,600 370,000 358,700
$726,900 $597,200 $534,100
Current liabilities $85,600 $79,000 $70,700
Long-term debt 144,200 85,000 50,900
Common stock, $10 par 384,000 319,000 308,000
Retained earnings 113,100 114,200 104,500
$726,900 $597,200 $534,100
Jergan Corporation
Income Statement
For the Years Ended December 31
2020 2019
Sales revenue $736,500 $605,600
Less: Sales returns and allowances 40,200 31,000
Net sales 696,300 574,600
Cost of goods sold 424,600 372,000
Gross profit 271,700 202,600
Operating expenses (including income taxes) 181,181 150,886
Net income $ 90,519 $ 51,714
Additional information:
1. The market price of Jergan’s common stock was $7.00, $7.50, and $8.50 for 2018, 2019, and 2020, respectively.
2. You must compute dividends paid. All dividends were paid in cash.
(a) Compute the following ratios for 2019 and 2020. (Round Asset turnover and Earnings per share to 2 decimal places, e.g. 1.65. Round payout ratio and debt to assets ratio to 0 decimal places, e.g. 18%. Round all other answers to 1 decimal place, e.g. 6.8 or 6.8%.)
2019 2020
(1) Profit margin % %
(2) Gross profit rate % %
(3) Asset turnover times times
(4) Earnings per share $ $
(5) Price-earnings ratio times times
(6) Payout ratio % %
(7) Debt to assets ratio % %
Answer:
1. 2020
Gross Margin Ratio = Gross Profit/Net Sale
Gross Margin Ratio = $271,700/$696,300
Gross Margin Ratio = 0.3902054
Gross Margin Ratio = 39.02%
2019
Gross Margin Ratio = Gross Profit/Net Sale
Gross Margin Ratio = $202,600/$574,600
Gross Margin Ratio = 0.35259311
Gross Margin Ratio = 35.26%
2. 2020
Profit Margin Ratio = Net Income / Net Sale
Profit Margin Ratio = $90,519/$696,300
Profit Margin Ratio = 0.13
Profit Margin Ratio = 13%
2019
Profit Margin Ratio = Net Income / Net Sale
Profit Margin Ratio = $51,714/$574,600
Profit Margin Ratio = 0.09
Profit Margin Ratio = 9%
3. 2020
Asset Turnover Ratio = Net Sales / Average Assets
Asset Turnover Ratio = $696,300 / [726900+597200)/2]
Asset Turnover Ratio = $696,300 / $662050
Asset Turnover Ratio = 1.05
2019
Asset Turnover Ratio = Net Sales / Average Assets
Asset Turnover Ratio = $574,600 / [(597200+534100)/2}
Asset Turnover Ratio = $574,600 / $565,650
Asset Turnover Ratio = 1.02
4. 2020
Earning per share = Net Income / Weighted Average Share
Earning per share = $90,519 / [(38400+31900)/2]
Earning per share = $90,519 / $35,150
Earning per share = 2.58
2019
Earning per share = Net Income / Weighted Average Share
Earning per share = $51,714 / [(31900+30800)/2]
Earning per share = $51,714 / $31,350
Earning per share = 1.65
5. 2020
Price Earning Ratio = Price/EPS
Price Earning Ratio = $8.50/2.58
Price Earning Ratio = 3.30
2019
Price Earning Ratio = Price/EPS
Price Earning Ratio = $7.50/1.65
Price Earning Ratio = 4.55
6. 2020
Debt Equity Ratio = Debt/Equity
Debt Equity Ratio = $229,800/$497100
Debt Equity Ratio = 0.46
2019
Debt Equity Ratio = Debt/Equity
Debt Equity Ratio = $164,000/$433200
Debt Equity Ratio = 0.38
trade industry short note
An industry is a group of manufacturers or businesses that produce a particular kind of goods or services. ... Industry comes from the Latin industria, which means "diligence, hard work," and the word is still used with that meaning.
Loren is in charge of implementing a wellness program for his organization. In formulating the plans for the wellness program, Loren visits and studies a number of other businesses that have successfully implemented such programs. When it is time to actually start the program in his organization, which of the following services or benefits is Loren LEAST likely to include?
a. Smoking cessation programs
b. Nutrition and weight-loss seminars
c. Cancer treatments including chemotherapy and radiation therapies
d. Stress management workshop sessions
Answer:
c. Cancer treatments including chemotherapy and radiation therapies
Explanation:
A wellness.program is defined as a set of activities.aomed at improving the quality of life of individuals through exercise, proper diet, and stress management.
The main idea behind a wellness program is prevention of illness with a healthy routine.
In the given scenario the other options are wellness initiatives except Cancer treatments including chemotherapy and radiation therapies.
This is excluded because it is study of a full blown illness and not preventive strategies to stay healthy.
To help finance a major expansion, Castro Chemical Company sold a noncallable bond several years ago that now has 20 years to maturity. This bond has a 9.25% annual coupon, paid semiannually, sells at a price of $875, and has a par value of $1,000. If the firm's tax rate is 25%, what is the component cost of debt for use in the WACC calculation
Answer:
8.09%
Explanation:
Semi annual coupon = 1000*(9.25/2)% = 46.25
N = (20*2) = 40
Using Ms Excel to get I/Y
N = 40, PV=-875, PMT = 46.25, FV = 1000
CPT I/Y = I/Y(n, -pv, pmt, fv) * 2
CPT I/Y = I/Y(40, -875, 46.25, 1000) * 2
CPT I/Y = 5.39% * 2
CPT I/Y = 10.78%
After tax cost of debt = 10.78%*(1 - 0.25)
After tax cost of debt = 10.78%*0.75
After tax cost of debt = 0.08085
After tax cost of debt = 8.09%
Computech Corporation is expanding rapidly and currently needs to retain all of its earnings; hence, it does not pay dividends. However, investors expect Computech to begin paying dividends, beginning with a dividend of $1.25 coming 3 years from today. The dividend should grow rapidly - at a rate of 22% per year - during Years 4 and 5; but after Year 5, growth should be a constant 6% per year.
Required:
What is the value of the stock today?
Answer:
$52.75
Explanation:
the discount rate for this question was not provided. the discount rate used is 10%
Value of the stock in year 1 and 2 = 0
value of the stock in year 3 = $1.25
value of the stock in year 4 = ($1.25 x 1.22) / 1.10^4 = $1.04
value of the stock in year 5 = ($1.25 x 1.22^2) / 1.10^5 = $1.16
value of the stock in perpetuality = ($1.25 x 1.22^2 x 1.06) / (0.1 - 0.06) = $49.30
Value of the stock today = $49.30 + $1.16 + $1.04 + $1.25 = $52.75
Pecan acquires Southern in an acquisition reported as a merger. The acquisition results in $50 million in goodwill. The acquisition cost includes an earnings contingency, valued at $1 million at the date of acquisition. Within the measurement period, additional information on Southern's expected future performance at the date of acquisition reveals that the earnout actually had a fair value of $200,000 at the date of acquisition. The entry to record the new information includes a credit of $800,000 to:
Answer:
Dr Earnings contingency liability $800,000
Cr Goodwill $800,000
Explanation:
Based on the information given the appropiate journal entry to record the new information includes a credit of $800,000 to:Dr Earnings contingency liability $800,000 and Cr Goodwill $800,000 reason been that the acquisition cost is lesser.
Dr Earnings contingency liability $800,000
Cr Goodwill $800,000
Brandon and Jane Forte file a joint tax return and decide to itemize their deductions. The Fortes' income for the year consists of $120,000 in salary, $1,000 interest income, $1,500 non qualifying dividends, and $1,100 long-term capital gains. The Fortes' expenses for the year consist of $3,000 in investment interest expense and $900 in tax preparation fees. Assuming that the Fortes' marginal tax rate is 32 percent and they make no special elections, what is the amount of investment interest expense deduction for the year
Answer: $2500
Explanation:
The amount of investment interest expense deduction for the year will be calculated thus:
The value of interest expense will be:
= Interest income + Non qualifying dividend
= $1000 + $1500
= $2500
It should be noted that the investment interest expenses will be $2500 due to the fact that thus is lesser than Fortes' expenses for the year which is $3,000 in investment interest expense.
A bank loans Kellie's Print Shop $350,000 to remodel a building near campus to use as a new store. On their respective balance sheets, this loan is
Answer: b. an asset for the bank and a liability for Kellie's Print Shop. The loan does not increase the money supply.
Explanation:
Banks make money by loaning out money to people and companies. This means that loans are an asset to banks because it enables them to generate cash.
Kellie's Print Shop will have to pay back to loan however which means that it is a liability to them because they owe the bank.
This loan will not increase the money supply because if not explicitly stated that it does, we assume that the loan was made from bank deposits by other bank customers which means that it is already part of the money supply.
1. Assume that your company is considering the lease of one of these HP copiers, and you expect that the average price for a color copy for your company would be $0.110 because you would carefully prioritize color copy jobs and reduce the number of copies requiring a large amount of color. You expect that training your copy center staff to properly use the new copier would cost about $6,150 for materials and lost work time. What is the breakeven number of color copies per year that would make you indifferent between the new HP copier and your current copier
Answer: 246,000 color copies
Explanation:
Cost of printing color pages using the old machine is not included so we will infer that.
We shall assume the cost of that to be $0.135.
In using this new copier made by HP, the cost saved per copy is:
= 0.135 - 0.110
= $0.025
The breakeven number of color copies that would make you indifferent would be the number of copies that would lead to a savings of $6,150 incurred on account of training the staff:
= 6,150 / 0.025
= 246,000 copies
A central characteristic of management by objectives (MBO) is that: Group of answer choices employees are given complete freedom to set their own goals as long as they are consistent with guidelines approved by the CEO. it assumes that management must motivate employees, since employees are incapable of motivating themselves. goals are set by top management and followed without question by others within the organization. goals are set through a process involving members of the organization.
Answer:
goals are set through a process involving members of the organization.
Explanation:
Management by objectives (MBO) refers to the management where there is a strategic management model that focuse to improve the organization performance by defining the goals & objectives and the same would be by both management and employees.
so here according to the given options, the last option is correct as it represents the characteristic of the MBO
So the same would be selected
Marriage between individuals who have similar social characteristics
Homogamy is the marriage between individuals who have similar social characteristics.
What is homogamy?Homogamy is the practice that involves individuals marrying each other because they have similar characteristics. It involves marriage between individuals who are, in some culturally important way, similar to each other.
The similar characteristics in homogamy include:
Race/ethnicityReligious backgroundAgeEucation backgroundSocial backgroundTherefore, marriage between individuals who have similar social characteristics is know as homogamy.
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Joseph and Mary, owners of Hotel Christmas have decided to sell their property. Hotel Christmas is a five-star full-service resort and has a trailing 12 months cash flow of $6,118,000. A neighboring limited-service property, The Motel, is valued at $16,000,000. The market cap rate for five-star, full-service properties in this area is 8.5%. Under standard market conditions, approximately how much would the sale price of the Christmas
Answer:
the amount that would be considered for the sale price of the Christmas is $71,976,470.59
Explanation:
The computation of the amount that would be considered for the sale price of the Christmas is given below;
We need to apply the following formula for the same
= Cash flow ÷ cap rate
= $6,118,000 ÷ 8.5%
= $71,976,470.59
By dividing the cash flow from the cap rate we simply determined the sale price
hence, the amount that would be considered for the sale price of the Christmas is $71,976,470.59
Zachary Airline Company is considering expanding its territory. The company has the opportunity to purchase one of two different used airplanes. The first airplane is expected to cost $23,680,000; it will enable the company to increase its annual cash inflow by $6,400,000 per year. The plane is expected to have a useful life of five years and no salvage value. The second plane costs $27,880,000; it will enable the company to increase annual cash flow by $8,200,000 per year. This plane has an eight-year useful life and a zero salvage value. Required Determine the payback period for each investment alternative and identify the alternative Zachary should accept if the decision is based on the payback approach. (Round your answers to 1 decimal place.)
Answer: See explanation
Explanation:
For the first airplane:
Payback period will be:
= Cost of first airplane ÷ Annual cash inflow
= 23,680,000 / 6,400,000
= 3.7 years
For the second airplane:
Payback period will be:
= Cost of first airplane ÷ Annual cash inflow
= 27,880,000 / 8,200,000
= 3.4 years
Since the decision is based on the payback approach, Zachary Airline should select the second option since it has a lesser payback period.
The net income reported on the income statement for the current year was $212000. Depreciation recorded on plant assets was $35500. Accounts receivable and inventories increased by $2100 and $7900, respectively. Prepaid expenses and accounts payable decreased by $1900 and $12500 respectively. How much cash was provided by operating activities?
Answer:
$226,900
Explanation:
Calculation to determine How much cash was provided by operating activities
Using this formula
Operating activities=Net income+Depreciation-Accounts receivable + inventories increased-Prepaid expenses - accounts payable decreased
Let plug in the formula
Operating activities=$212000 + $35500 - $2100 - $7900 + $1900 - $12500
Operating activities =$226,900
Therefore The Amount of cash that was provided by operating activities is $226,900
If an announcement by a firm causes the price of that firm's stock to suddenly change, that price change will most likely be driven by:________.
a. the unexpected part of the announcement.
b. the expected part of the announcement
c. market inefficiency
d. systematic risk
Answer:
The correct answer is the option A: The unexpected part of the announcement.
Explanation:
To begin with, the stock market is characterized for being completely umpredictable due to the fact that the information available for the common people is not enough to predict the possible behaviors of the prices, so that means that when an unexpected announcement happens and nobody new about it then the market will react depending on how it takes the new so that explains that if something not good happens all the sudden the priece of the stocks of that company will probably go down due to the bad reception of the news.
In 2016, Amazon began charging a 5.75% sales tax on products it sells in the District of Columbia. Holding all else constant, the effect of this tax would be to _____ in the District of Columbia.
Answer:
b. decrease Amazon sales
Explanation:
Note: "Options the question is attached as picture below"
In 2016, Amazon began charging a 5.75% sales tax on products it sells in the District of Columbia. If we hold all else equal, the effect of this tax would be to decrease Amazon Sales In the District of Columbia.
This action will consequentially increase the sales in local Market and then discourage online shopping along with it In Columbia district; it will decrease sales overall.
Capable Golf Cart, Inc. (CGC) manufactures two models of golf cart: LX and EX. The budget data for next month is available. LX EX Total Units produced 50 30 80 Direct labor hours 2,000 3,000 5,000 Machine hours 1,500 1,200 2,700 Direct materials $125,000 $90,000 $215,000 Direct labor 90,000 60,000 150,000 Manufacturing overhead 202,500 Total $567,500 Required: 1. Compute the reported unit cost for each product if direct labor hours are used as the allocation base. 2. Compute the reported unit cost for each product if direct labor costs are used as the allocation base. 3. Compute the reported unit cost for each product if machine hours are used as the allocation base.
Solution :
1. Allocation on the basis of [tex]$\text{Direct labor hours}$[/tex]
LX EX
Direct Material 125000 90000
Direct [tex]$\text{labor}$[/tex] cost 90000 60000
Manufacturing overhead [tex]$81000$[/tex] [tex]$121500$[/tex]
(202500/5000 x 2000) (202500/5000 x 3000)
Total cost 296000 271500
Units produced 50 30
Cost per unit 5920 9050
2. Allocation on the basis of [tex]$\text{Direct labor costs}$[/tex]:
LX EX
Direct Material 125000 90000
Direct labor cost 90000 60000
Manufacturing overhead 121500 81000
(202500/150000 x 90000) (202500/150000 x 60000)
Total cost 336500 231000
Units produced 50 30
Cost per unit 6730 7700
3. Allocation on the basis of [tex]$\text{machine hours}$[/tex]
LX EX
Direct Material 125000 90000
Direct labor cost 90000 60000
Manufacturing overhead 112500 90000
(202500/2700 x 1500) (202500/2700 x 1200)
Total cost 327500 240000
Units produced 50 30
Cost per unit 6550 8000
The board of directors of Capstone Inc. declared a $0.60 per share cash dividend on its $1 par common stock. On the date of declaration, there were 50,000 shares authorized, 20,000 shares issued, and 3,200 shares held as treasury stock. What is the entry for the dividend declaration?
Answer:
See below
Explanation:
The journal entry is shown below;
Dividend payable $10,080
_________To Cash $10,080
(Being the payment of dividend paid)
The computation is shown below;
= (20,000 shares - 3,200 shares) × $0.6
= $10,080
Dividend payable was debited as it decreases liabilities and credited cash as it reduced the assets.
Wexpro, Inc., produces several products from processing 1 ton of clypton, a rare mineral. Material and processing costs total $62,000 per ton, one-fourth of which is allocated to product X15. Eight thousand three hundred units of product X15 are produced from each ton of clypton. The units can either be sold at the split-off point for $16 each, or processed further at a total cost of $9,800 and then sold for $19 each.
Required:
1. What is the financial advantage (disadvantage) of further processing product X15?
2. Should product X15 be processed further or sold at the split-off point?
Answer:
1) Financial advantage = $15,100
2) X15 should be processed further because it would generate 15,100
Explanation:
A company should process a product further if the additional revenue from the split-off point is greater than than the further processing cost.
Also note that all cost incurred up to the split-off point are irrelevant to the decision to process further .
$
Sales revenue after further processing
(19×8,300) 157,700
Sales revenue at the split-off point
(16×8,300) 132,800
Additional sales revenue from further processing 24,900
Less further processing cost (9,800)
Financial advantage 15,100
Financial advantage = $15,100
X15 should be processed further because it would generate 15,100
The comparative balance sheets of Greenvale Games, Inc. show a net decrease in unexpired insurance of $400 and a net decrease in interest payable of $250. In order to reconcile net income with net cash flow from operating activities, net income should be:
Answer:
$150 increase
Explanation:
According to the scenario, computation of the given data are as follows,
Decrease in unexpired insurance = $400
Decrease in interest payable = $250
So, we can calculate the net income to reconcile by using following formula,
Net income = Decrease in unexpired insurance - Decrease in interest payable
= $400 - $250
= $150 ( Positive means increase)
So, net income should be increased by $150.
Shareholders, customers, suppliers, and employee groups are considered
A. indirect stakeholders
B. convertible stakeholders
C. direct stakeholders
D. formal stakeholders
Answer: its “direcr stakeholders”
Explanation: bcs it is
The accounts in the ledger of Monroe Entertainment Co. are listed below. All accounts have normal balances.
Accounts payable $598 Fees Earned $3,129
Accounts receivable 717 Insurance Expense 543
Supplies 500 Rent expense 1,500
Prepaid insurance 2,195 Land 2,773
Cash 2,002 Wages expense 651
Office equipment 1,800 Retained earnings 5,500
Dividends 701 Common stock 5,855
Unearned rent 1,600
Prepare a trial balance. The total of the debits is:
a. $11,200
b. $13,900
c. $12,700
d. $9,700
A firm is considering taking a project that will produce $13 million of revenue per year. Cash expenses will be $4 million, and depreciation expenses will be $1 million per year. If the firm takes that project, then it will reduce the cash revenues of an existing project by $2 million. What is the free cash flow on the project, per year, if the firm is in the 30 percent marginal tax rate
Answer:
$5.2 million
Explanation:
The computation of the free cash flow is shown below:
We know that
Free cash flow = EBIT × (1 -Tax Rate) + Depreciation & Amortization
Here
EBIT = Revenues - decreased amount of cash revenues - cash expenses - depreciation
= $13 million - $2 million - $4 million - $1 million
= $6 million
Now the free cash flow is
= $6 million × ( 1 - 30%) + $1 million
= $4.2 million + $1 million
= $5.2 million
What kinds of barriers get in the way of "following your dreams"?
Answer: A. Individuals may not have the talents or resources to simply do whatever they dream of doing.
The kind of obstacles that prevent people from "following their ambitions" It's possible that some people lack the skills or resources necessary to pursue their dreams.
What kinds of skills are examples?making excellent choices despite having little knowledge. recognizing other people's viewpoints and interacting with various types of people successfully. Setting objectives, keeping track of progress, and making an effort to enhance your job. generating original answers and imaginative concepts to address issues.
What does human resources talent mean?Talent management, which includes a variety of HR procedures throughout the employee life cycle, is the attraction, selection, and retention of personnel. It includes hiring, onboarding, succession planning, learning and development, performance management, workforce planning, and employee engagement.
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Answer:
Individuals may not have the talents or resources to simply do whatever they dream of doing.
Explanation: Just took the test
A public good is A. any good provided by government. B. a good that can be most cheaply provided by government, though it may in fact be provided by private enterprise. C. a good whose benefits cannot readily be restricted to a small group of people. D. a good whose benefits cannot be enjoyed by an individual alone.
Answer:
C. a good whose benefits cannot readily be restricted to a small group of people.
Explanation:
Factors of production can be defined as the fundamental building blocks used by individuals or business firms for the manufacturing of finished goods and services in order to meet the unending needs and requirements of their customers.
The four factors of production are;
I. Land: this refers to the natural resources and raw materials extracted from the ground or grown in the soil e.g oil, gold, rubber, cocoa, etc.
II. Labor (working): this is the human capital or workers who are saddled with the responsibility of overseeing and managing all the aspects of production.
III. Capital resources: it includes the physical assets used for production of goods and services such as equipment, money, plant, etc.
IV. Entrepreneurship: it is intellectual capacity required to drive a business and the skills to develop an idea into a money making venture (business).
These four (4) factors of production when combined effectively and efficiently are used for the manufacturing or production of goods and services that meets the unending requirements or needs of the consumers.
A public good is a good whose benefits cannot readily be restricted to a small group of people.
This ultimately implies that, a public good such as power utility (electricity) or water supply is capable of being provided simultaneously to the general public.
Furthermore, a public good is non-excludable and cannot be exhausted due to its use by the general public i.e it's never depleted.
Drag each label to the correct location on the image.
Identify the features of stocks and bonds.
coupon rate
face value
closing price
maturity date
Stock
Bond
Answer:
The answer is "face value".
Explanation:
FACE VALUE was its common characteristic of stocks and bonds.
For an inventory, that original cost of stock indicated on the certification was its face value. That facial value for securities refers to the amount paid to the owner just at the expiry date.
Its book value, as well as the factor, is the distinctive function of shares, while the factor of bonds is a discount rate, duration, or factor value.
Answer:
Stock- closing price
Bond- maturity date, coupon rate, and face value
Explanation:
Got it right on the test :)
Hotaling Corporation is analyzing a capital expenditure that will involve a cash outlay of $146,040. Estimated cash flows are expected to be $30,000 annually for seven years. The present value factors for an annuity of $1 for 7 years at interest of 6%, 8%, 10%, and 12% are 5.582, 5.206, 4.868, and 4.564, respectively. The internal rate of return for this investment is:
Answer:
The solution shows that a rate of return of 10% which provides an annuity factor of 4.868 generates an NPV which is equal to zero. Thus, our IRR or internal rate of return is 10%.
Explanation:
The IRR or internal rate of return is the rate at which NPV or Net Present Value of the investment becomes zero. We are provided with the initial outlay for the project and the annual cash inflows along with time period. Using the annuity factors given below, we need to find out the factor which makes the NPV zero. The NPV is calculated as follows,
NPV = Present Value of Cash Inflows - Initial Outlay
We can try out each annuity factor and see what NPV is generates.
1. 6% rate (Annuity factor = 5.582)
NPV = (30000 * 5.582) - 146040
NPV = $21420
2. 8% rate (Annuity factor = 5.206)
NPV = (30000 * 5.206) - 146040
NPV = $10140
3. 10% rate (Annuity factor = 4.868)
NPV = (30000 * 4.868) - 146040
NPV = $0
So, from the above solution we can see that a rate of return of 10% which provides an annuity factor of 4.868 generates an NPV which is equal to zero. Thus, our IRR or internal rate of return is 10%
Crane Company issued common stock for proceeds of $389000 during 2019. The company paid dividends of $88000 and issued a long-term note payable for $96000 in exchange for equipment during the year. The company also purchased treasury stock that had a cost of $17000. The financing section of the statement of cash flows will report net cash inflows of
Answer:
$284,000
Explanation:
Calculation to determine what The financing section of the statement of cash flows will report net cash inflows of
Using this formula
Net cash inflows=Common stock-Dividends-Treasury stock
Let plug in the formula
Net cash inflows= $389000-$88000 -$17000
Net cash inflows=$284,000
Therefore The financing section of the statement of cash flows will report net cash inflows of $284,000