The Johnson Drum Company is planning to build a new factory. The purchase of the land, building the plant, and installation of equipment will take place over a 2-year period. The following are planned cash outflows:
Year Cash Outflow 0 $3,500,000 1 $4,750,000 2 $6,100,000
Johnson Drum's cost of capital is 14%, and its marginal tax rate is 35%. What is the NINV measured in present value terms today?

Answers

Answer 1

Answer:

$12,356,650

Explanation:

Calculation for What is the NINV measured in present value terms today

Year Cash Outflow PVIF PV of NINV

Year 0 $3,500,000 * 1.000 = $3,500,000

Year 1 $4,750,000* 0.877 =$ 4,165,750

Year2 $6,100,000* 0.769 =$4,690,900

Total NINV=$12,356,650

(3,500,000+4,165,750+=4,690,900)

Therefore the NINV measured in present value terms today will be $12,356,650


Related Questions

Short Company purchased land by paying $22,000 cash on the purchase date and agreed to pay $22,000 for each of the next seven years beginning one-year from the purchase date. Short's incremental borrowing rate is 10%. On the balance sheet as of the purchase date, after the initial $22,000 payment was made, the liability reported is closest to: (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use appropriate factor(s) from the tables provided.)

Answers

Answer:

The liability reported is closest to $107,105.21.

Explanation:

This can be calculated using the formula for calculating the present value of an ordinary annuity as follows:

PV = P * ((1 - (1 / (1 + r))^n) / r) …………………………………. (1)

Where;

PV = Present value or the the liability reported  =?

P = Annuity payment = $22,000

r = Student's desired return rate = 10%, or 0.10

n = number of years = 7

Substitute the values into equation (1) to have:

PV = $22,000 * ((1 - (1 / (1 + 0.10))^7) / 0.10)

PV = $22,000 * 4.86841881769293

PV = $107,105.21

Therefore, the liability reported is closest to $107,105.21.

Magix Productions orders new equipment for the company. The new equipment costs $50,000 and will help the company to save $10,000 annually. What is the average rate of return of the equipment?
A. 15 percent
B. 20 percent
C. 35 percent
D. 40 percent

Answers

Answer:

B. 20 percent

Explanation:

The computation of the average rate of return of the equipment is shown below:

= Average net profit or savings ÷ average investment

= ($10,000 ÷ 2) ÷ ($50,000 ÷ 2)

= $5,000 ÷ $25,000

= 20%

hence, the average rate of return of the equipment is 20%

We simply applied the above formula so that the correct value could come

And, the same is to be considered

A company is facing a lawsuit from a customer. It is possible, but not probable, that the company will have to pay a settlement that management estimates to be $2,000,000. How would this fact be reported in the financial statements to be issued at the end of the current month?
a. $2,000,000 in the Current Liability section.
b. $2,000,000 in the Long-Term Liability section.
c. In a descriptive narrative in the footnote section.
d. None because disclosure is not required.

Answers

Answer:

c. In a descriptive narrative in the footnote section.

Explanation:

Only contingent liabilities that are probable and can be actually estimated must be recorded in the income statement and balance sheet. Contingent liabilities that are only possible, but not probable, must be disclosed in the footnotes of the financial statements. Liabilities that are not possible, nor probable, should not be included anywhere.

From 2006 to 2010, per capita real gross domestic product (GDP) in Croatia grew an average of 1.08 percent per year. At that rate, according to the Rule of 70, in roughly how many years will the Croatian economy double in size?

Answers

Answer:

Number of Years to Double= 64.81

Explanation:

Giving the following information:

From 2006 to 2010, per capita real gross domestic product (GDP) in Croatia grew an average of 1.08 percent per year.

The rule of 70 is a means of estimating the number of years it takes for an investment or your money to double. In this case, the GDP.

Number of Years to Double= 70/Annual growth

Number of Years to Double= 70/1.08

Number of Years to Double= 64.81

What is the standard deviation of a stock that has a 10% chance of earning 18%, a 10% chance of making 11%, a 40% chance of making 5%, and a 40% chance of making 22%?
A. 7.95%.
B. 13.70%.
C. 7.78%.
D. 13.05%.

Answers

Answer:

A. 7.95%.

Explanation:

Calculate the expected rate of return for the investment as follows:

[tex]\begin{aligned}

\text { Expected rate of return } &=(\text { Probability } \times \text { Rate of return })+(\text { Probability } \times \text { Rate of return })+\\

&(\text { Probability } \times \text { Rate of retum }) \\

=&(0.40 \times 15 \%)+(0.50 \times 10 \%)+(0.10 \times-3 \%) \\

=& 0.06+0.05-0.003 \\

=& 0.107[/tex]

Calculate the standard deviation of the investment as follows:

[tex]\begin{aligned}

\text { Standard deviation }=&\left\{\begin{array}{l}

\text { Probability } \left.\times(\text { Return }-\text { Expected return })^{2}\right)+ \\

\text { (Probability } \left.\times(\text { Return }-\text { Expected return })^{2}\right)+ \\

\text { (Probability } \left.\times(\text { Return }-\text { Expected return })^{2}\right)

\end{array}\right.[/tex]

=[tex]\sqrt{\left(0.40 \times(0.15-0.107)^{2}\right)+\left(0.50 \times(0.10-0.107)^{2}\right)+} \\

=\sqrt{0.0007396+0.0000245+0.0018769} \\

=\sqrt{0.002641} \\

=0.05139066063011[/tex]

Driving skills are a basic qualification of

Military Infantry.
Mail Carriers.
Ambassadors.
Tax Examiners.

Answer quick

Answers

Answer: The answer is B mail carriers

Explanation:

Answer: B

Explanation:

Mail carriers

Assume that Smith deposits $500 in currency into her checking account in the XYZ Bank. Later that same day, Jones negotiates a loan for $2,000 at the same bank. In what direction and by what amount has the supply of money changed?

Answers

Answer: See explanation

Explanation:

Supply of money simply means the money available at a particular time period for an economy.

In the above scenario, the loan of $2000 will lead to an increase in the supply of money available in the economy by $2000.

It should be noted that the deposit made by Smith in the value of $500 does not bring about in the change of the money supply. This is because tye. $500 is still considered to be part of the money supply that is available in the economy.

The firm should shut down if the market price is:___________.
A. above $8.
B. above $6.30 but less than $8.
C. above $4.50 but less than $6.30.
D. less than $4.50.

Answers

Answer: D. less than $4.50.

Explanation:

In the short run, a business should shutdown if the market price is below the Average Variable costs as because at this point, only losses are being made if the company stays in action.

If price is below the variable cost, it is best to shutdown so that the company can stop incurring the variable costs and incur the fixed cost alone. The lowest Average Variable cost is $4.50 for this good and so if the price falls below $4.50, the should shutdown.

When is a variance considered to be 'material'?
a) When it could have been controlled more effectively
b) When it is infrequent
c) When it is unfavorable
d) When it is large compared to the actual cost

Answers

ANSWER: D

A variance is considered to be material if it exceeds a certain percentage or dollar amount.

A result of welfare economics is that the equilibrium price of a product is considered to be the best price because it
a. maximizes both the total revenue for firms and the quantity supplied of the product.
b. minimizes costs and maximizes output.
c. maximizes the combined welfare of buyers and sellers .
d. minimizes the level of welfare payments.

Answers

Answer:

c. maximizes the combined welfare of buyers and sellers .

Explanation:

Welfare Economics simply deals with how the sharing/ allocation of resources affects economic well-being of people. The above statement of the fact that the result of welfare economics is that the equilibrium price of a product is considered to be the best price because it maximizes the combined welfare of buyers and sellers is true due to the fact that it takes the welfare and wellbeing of both parties into consideration.

The most competitively effective and very likely most profitable long-term approach to reduce or eliminate the impact of paying tariffs on pairs imported to a company's distribution warehouse in Europe-Africa is to:___________.
A) raise the selling prices of all footwear being marketed in Europe-Africa by enough to cover somelall of the tariff costs. build and equip a production facility in Europe-Africa and then expand it as may be needed to supply all (or at least most) of the pairs the company intends to try to sell in Europe- Africa.
B) cut distribution and warehouse expenses and marketing expenses per pair sold in Europe Africa by enough to cover some/all of the tariff costs.
C) pursue a strategy of selling fewer pairs in Europe-Africa than rival companies, which will then keep the company's costs for import tariffs in Europe-Africa lower than those of rivals and give the company a competitive advantage based on low tariff costs on its sales in Europe-Africa.
D) pursue a strategy of selling footwear to retailers in Europe-Africa at a wholesale price of $39 per pair or less--no import tariffs have to be paid on branded pairs shipped to footwear retailers in Europe-Africa when the wholesale price is below $40 per pair.

Answers

Answer:

build and equip a production facility in Europe-Africa and then expand it as may be needed to supply all (or at least most) of the pairs the company intends to try to sell in Europe- Africa

Explanation:

In order to have effective competition and profitable for the long term approach for decreasing or removing the effect of tariff that would be paid on pairs is that to establish the production facility so that it would get expanded and the same is to be sell in Europe-Africa

Therefore the above represents the answer

The most appealing way to reduce or eliminate the impact of paying tariffs on pairs imported to a company's or organization's distribution warehouse in Europe-Africa is to:

Build and equip a manufacturing plant in Europe-Africa, then expand it as needed to supply all (or at least the majority) of the pairs the company plans to sell in Europe-Africa.

To have effective competition and a successful long-term strategy for reducing or eliminating the effect of tariffs paid on pairs, it is necessary to develop a production facility that can be expanded and sold in Europe.

Therefore, option A is the correct response to the distribution warehouse.

For more information regarding the Europe-Africa distribution:

https://brainly.com/question/3300597

A company acquired an office building, land, and equipment in a single basket purchase. The fair values were $1,560,000, $1,560,000, and $2,080,000 for the building, land, and equipment, respectively. The company recorded the building for $1,470,000. What was the total purchase cost for all three assets

Answers

Answer:

$4,900,000

Explanation:

Ratio of Building in total Fair Value = $1,560,000 / ($1,560,000 + $1,560,000 + $2,080,000)

Ratio of Building in total Fair Value = $1,560,000 / $5200000

Ratio of Building in total Fair Value = 0.3

Ratio of Building in total Fair Value = 30%

Building recorded by = $1470000

Total Purchase Price of all three asset = $1470000 / 30%

Total Purchase Price of all three asset = $1470000 / 0.3

Total Purchase Price of all three asset = $4,900,000

Suppose you buy a put option contract on October gold futures with a strike price of $1200 per ounce. Each contract is for the delivery of 100 ounces. What happens if you exercise when the October futures price is $1,180?

Answers

Answer:

Strike price of October gold future = $1,200 per ounce

The exercise price = $1,180

To calculate the amount that will help the investor to decide about the position

Amount added to margin = (Strike price - Future price) * Delivery if each contract

Amount added to margin = ($1,200 - $1,180) * 100

Amount added to margin = $20 * 100

Amount added to margin = $2,000

Therefore, the amount of $2,000 is received. The investor has short position on future contracts to sell 100 ounces of gold in October.

During the 1970s, some economists argued that the cause of the woes of the economy were due to __________. g

Answers

Explanation:

Stagflation. Which is stagnant growth combined with inflation. Which was caused in large part by repeated disruptions to global oil supplies, which led to soaring prices and gasoline shortages in the United States.

thinking strategically about industry and competitive conditions in a given industry involves evaluating such considerations as

Answers

Answer:

E. how often sellers alter their prices, how sensitive buyers are to price differences among sellers, whether the item being purchased is a good or a service, and whether buyers buy frequently or infrequently.

Explanation:

Options are "A. cultural, lifestyle, and demographic changes, B. the birth of new industries, new knowledge, and disruptive technologies, C. weather, climate change, and water shortages, D. interest rates, exchange rates, unemployment rates, inflation rates, and economic growth, E. how often sellers alter their prices, how sensitive buyers are to price differences among sellers, whether the item being purchased is a good or a service, and whether buyers buy frequently or infrequently."

Thinking strategically about industry and competitive conditions in a given industry involves evaluating such considerations as how often sellers alter their prices, how sensitive buyers are to price differences among sellers, whether the item being purchased is a good or a service, and whether buyers buy frequently or infrequently.

The strategy decision making about the industry and competitive conditions involve evaluating the prices, buyer sensitivity to the prices, serviceability & frequency.

Agency relationship refers to a consensual relationship between two parties, where one person (the principal) or entity authorizes the other, the agent, to act on his, her, or its behalf. Agency relationships exist in most large corporations due to the separation of management from ownership. The lack of alignment of the principal and the agent interests create an agency cost. What are the main implications of this separation

Answers

Answer:

The main implications of the agency separation are goal incongruence, self-interest, and low productivity.

Explanation:

Goal incongruence between an agent and the principal arises from the lack of alignment in their interests.  While the agent is appointed to represent the principal, most often, the agent acts in her own interest instead of in the best interest of the principal.  This lack of alignment reduces the productivity that could result from the agency relationship.  Another implication of the management separation is that the agent's risk appetite will be different from that of the principal.  The principal will need to exercise some control over the agent to curb excessive risk-taking by the agent.

g __________ conversion is the least expensive and highest risk IS conversion strategy because the old system is cut off and the new system is turned on at a certain point in tim

Answers

Answer:

Direct

Explanation:

There are different types of conversion systems. Example includes the direct conversion and parallel conversion.

In this conversion system, users stops using the old system one day and starts using the next system the next.

Its requires fewer resources and is simple if nothing goes wrong. Risk involved mostly if the hardware and software are old or at a cutting edge.

Direct conversion is said to be an abrupt change where the the old system is simply unplugged and the new system is turned on. It does not allow users with any choice but to work with the new system. It is said to be risky and least cost.

What type of mortgage requires fixed monthly interest payments for 3 to 5 years whereupon full payment of the mortgage principal is due?

Answers

Answer:

Balloon Payment Mortgages

Explanation:

Mortgages are simply loans to persons or businesses to get/purchase homes, land, or other real property.

A balloon payment mortgage is a a type of mortgage known for its ability to not fully amortize over the term of the note, thereby leaving a balance due at maturity. Its last or final payment is called a balloon payment because of its notable large size. This type of mortgages are more more common in commercial real estate than in residential real estate. the above statement of it that it require fixed monthly interest payments for 3 to 5 years whereupon full payment of the mortgage principal is due is correct.

Which of the following is a potential disadvantage when considering long-term loans as an option for raising capital?
OA. They are available to firms with a weak credit rating.
O B. Not all companies can qualify for loans and acceptable terms.
O C. Such loans can restrict the way an organization uses its assets.
D. They require diluting ownership in organizations.
O E. They cannot provide substantial sums of money to businesses.

Answers

Answer:

A potential disadvantage when considering long-term loans as an option for raising capital is:

D. They require diluting ownership in organizations.

Explanation:

This potential disadvantage becomes a reality when the long-term loans are converted into shares.  At this point, the ownership in the organization is diluted.  Ownership dilution reduces the percentage of the ownership of shares in the entity.  The investment becomes less attractive to the original owners since more owners are brought on board.

A potential disadvantage when considering long-term loans as an option for raising capital is D. They require diluting ownership in organizations.

A long-term loan refers to a loan that is paid for more than three years. This is different from a short-term loan that is usually expected to be paid back within a few years.

A disadvantage when considering long-term loans as an option for raising capital is that require diluting ownership in organizations. When one doesn't pay back on time, one may lose some percentage of ownership in the company.

Read related link on:

https://brainly.com/question/15207309

Which characteristics make it so that perfectly competitive firms and monopolistically competitive firms have zero economic profit in the long run?

Answers

Answer:

A.  Homogeneous product and perfect information

Explanation:

The characteristics in which the perfectly competitive market and the monopolistic market would have zero economic profit in the long run that should be the same product and perfect information as the high prices would vary . Also it decreases the asymmetric information

Therefore as per the given situation, the correct option is A

Chik’s Chickens has accounts receivable of $6,333. Sales for the year were $9,800. What is its average collection period? (Use 365 days in a year. Do not round intermediate calculations. Round your final answer to the nearest whole number.)

Answers

Answer:

236 days

Explanation:

Average collection period is computed as;

= Receivables at start of the year / Average daily sales

Given that;

Receivables at start of the year

= $6,333

Daily sales

= Sales for the year / Days in a year

= $9,800 / 365 = 26.849315068

Therefore,

Average collection period = $6,333 / 26.849315068

Average collection period = 235.87193878

Average collection period = 236 days. Approximated.

A firm will often split the stock to keep the stock price within a proper trading range.

a. True
b. False

Answers

Answer:

a. True

Explanation:

Many times a corporation might carry out a stock split in order to prevent the price of its stock to become too expensive. E.g. when Apple's stocks get too expensive, stock splits occur, The last occasion the split stocks was 7:1, i.e. for every existing Apple stock, 6 new ones were issued.

This occurs because if the price of the stock is too high, it will be harder for small investors. Remember that the total capitalization is not affected by a stock split.

"In terms of the exercise, what price will the client report for tax purposes in relation to the price at which the stock is sold to the buyer of the call?"

Answers

Akaiinwmwuwuwuwuwyegebebe

On December​ 31, 2014​, Renda​'s common stock sold for per share. At that​ price, how much did investors say​ $1 of the​ company's net income was​ worth?

Answers

Question Completion:

On December​ 31, 2014​, Renda​'s common stock sold for $35 per share. At that​ price, how much did investors say​ $1 of the​ company's net income was​ worth? Earnings per share = $1.50

Answer:

Renda Company

The value of $1 of the company's net income by investors was:

$23.33

Explanation:

a) Data and Calculations:

Market price of Renda's common stock = $35 per share

Earnings per share = $1.50

This means that investors' value on $1 = $35/$1.50 = $23.33

b) Investors in Renda's common stock place a value of $23.33 for each $1 of the company's net income.  This is why they can afford to pay $35 per share in order to benefit from $1 of the company's earnings.  This calculation is based on the price-earnings ratio, which relates the company's share price to the earnings per share.

The Treasury bill rate is 6%, and the expected return on the market portfolio is 10%. According to the capital asset pricing model:________

Answers

Answer: See explanation

Explanation:

Your question is not complete. Here is the completed question:

The Treasury bill rate is 6%, and the expected return on the market portfolio is 10%. According to the capital asset pricing model, what is the risk premium?

The risk premium will be the difference between the market portfolio and the treasury bill rate. This will be:

= 10% - 6%

= 4%

An aging of a company's accounts receivable indicates that $8400 are estimated to be uncollectible. If Allowance for Doubtful Accounts has a $3800 credit balance, the adjustment to record bad debts for the period will require a:_____.
1. debit to Bad Debts Expense for $1,800.
2. debit to Bad Debt Expense for $2,200.
3. credit to Allowance for Doubtful Accounts for $3,000.
4. debit to Bad Debts Expense for $2,000.

Answers

Answer:

Debit to Bad Debts Expense for $4,600

Explanation:

Based on the information given we were told that the company's accounts receivable shows the amount of $8400 which was estimated to be uncollectible which means that If Allowance for Doubtful Accounts has the amount of $3800 as credit balance, the adjustment to record bad debts for the period will require a Debit to Bad Debts Expense for $4,600 calculated as

Bad Debts Expense=Accounts receivable-Allowance for Doubtful Accounts

Bad Debts Expense=$8,400-$3,800

Bad Debts Expense=$4,600

Bonita Company's inventory records show the following data:

Units Unit Cost
Inventory, January 1 10900 $8.00
Purchases: June 18 8700 8.10
November 8 5700 5.00

A physical inventory on December 31 shows 5700 units on hand. Under the FIFO method, the December 31 inventory is:_______

Answers

Answer:

$28,500

Explanation:

FIFO will give the same result whether you use perpetual or periodic system.

Ending Inventory = Units Left × Earliest Price

Therefore,

Ending Inventory = 5700 units × $5.00

                             = $28,500

***ECONOMICS***An investment that you bought for ______
and sold for _____
made a profit.

A. $500; $400

B. $400; $500

C. S500; $300

D. $400; $300

Answers

Answer:

B.

Explanation:

you bought it for 400 and sold it for 500 and made 100$ profit

when it comes to managing money success is about 80% knowledge and 20% Behavior true or false ​

Answers

Answer:

huh

Explanation:

do you have a picture of the question because I don't get it but I'm trying to help

How do i get as much mony as bill gates todey?

Answers

Answer:

be very famous

Explanation:

be white
why do i need to have 20 letters
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