Business College

is the present value of these cash flows? (Enter rounded answers as directed, but do not use rounded numbers in intermediate calculations. Round your answers to 2 decimal places (e.g., 32.16).) Present value Investment X $ Investment Y $ (b) Which of these cash flow streams has the higher present value at 5 percent? (Click to select) Requirement 2: (a) If the discount rate is 23 percent, what is the present value of these cash flows? (Enter rounded answers as directed, but do not use rounded numbers in intermediate calculations. Round your answers to 2 decimal places (e.g., 32.16).) Present value Investment X $ Investment Y $ (b) Which of these cash flow streams has the higher present value at 23 percent?

Answers

Answer 1

Answer and Explanation:

1A. For investment X, given 6% discount rate, 6700 PMT, N= 9 years

Present value of investment X= 6700* PVIF using 6%, 9 years

= $45751.34

For investment Y, given 6% discount rate, 9200 PMT, N= 5 years

Present value of investment Y =9200*PVIF using 6%, 9 years

=$38753.75

1B. Investment X from the above has higher present value

2A. For investment X, given 22% discount rate, 6700 PMT, N = 9 years

Present value of investment X

=6700*PVIF using 22% ,9 years

= $25368.11

For investment Y, given 22% discount rate, 9200 PMT, N = 5 years

Present value of investment X

=9200*PVIF using 22% ,N = 5 years

= $26345.49

2B. Investment Y from the above has higher present value.

Is The Present Value Of These Cash Flows? (Enter Rounded Answers As Directed, But Do Not Use Rounded

Related Questions

Big Box Store has operated with a 30% average gross profit ratio for a number of years. It had $107,000 in sales during the second quarter of this year. If it began the quarter with $18,700 of inventory at cost and purchased $72,700 of inventory during the quarter, its estimated ending inventory by the gross profit method is:

Answers

Answer:

$16,500

Explanation:

The computation of the estimated ending inventory is given below:

As  We know that

Cost of goods sold = Beginning inventory + purchase made - ending inventory

And, the

Sales - gross profit = Cost of goods sold

So,

$107,000 - $107,000 × 30% = Cost of goods sold

Therefore, the cost of goods sold is

= $107,000 - $32,100

= $74,900

And, finally the ending inventory is

$74,900 = $18,700 + $72,700 - ending inventory

$74,900 = $91,400  - ending inventory

So, the ending inventory is

= $91,400 - $74,900

= $16,500

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