Major Corp. is considering the purchase of a new piece of equipment. The cost savings from the equipment would result in an annual increase in cash flow of $130,000. The equipment will have an initial cost of $665,000 and have an 8-year life. The equipment has no salvage value. The hurdle rate is 8%. Ignore income taxes. (Future Value of $1, Present Value of $1, Future Value Annuity of $1, Present Value Annuity of $1.)
a. What is the net present value?
b. What would the net present value be with a 12% hurdle rate? (Negative amounts should be indicated by a minus sign.)
c. Based on the NPV calculations, in what range would the equipment’s internal rate of return fall? (Round your answer to 2 decimal places.)
Answers
Answer:
a. $ 82, 063
b. - $ 19,206
c. 11.24%
Explanation:
Net Present Value is calculated by taking the Present Day (Discounted) value of all future Net Cash flows based on the company`s Cost of Capital and subtracting the Initial Cost of the Investment.
Using a Financial Calculation
a.
Cash flow Amount
Cf0 = ($665,000)
Cf1 = $130,000
Cf2 = $130,000
Cf3 = $130,000
Cf4 = $130,000
Cf5 = $130,000
Cf6 = $130,000
Cf7 = $130,000
Cf8 = $130,000
i = 8%
NPV = $ 82, 063
b.
Cash flow Amount
Cf0 = ($665,000)
Cf1 = $130,000
Cf2 = $130,000
Cf3 = $130,000
Cf4 = $130,000
Cf5 = $130,000
Cf6 = $130,000
Cf7 = $130,000
Cf8 = $130,000
i = 12%
NPV = - $ 19,206
c.
Internal Rate of Return = P + ((N-P)×p/(p+n))
= 8% + ((12%-8%)×$ 82, 063/($ 82, 063+ $ 19,206))
= 11.24%
Related Questions
Variable Costs + Fixed Costs = ?
Total output
Total costs
Marginal costs
Answers
Type the correct answer In the box. Spell all words correctly.
What happens to your tax llability with proper financial planning?
You can
your tax liability through proper financial
planning.
Answers
Answer:
I think the question is incomplete
Calculate the 2 year annuity factor if the required rate of return is 10%.
1.736
0.091
0.826
2.486
Answers
The 2-year annuity factor for a required rate of return of 10% can be calculated to be A. 1.736.
How can the annuity factor be found?The annuity factor can be found by the formula:
= 1 x (1 - (1 + rate) ^-number of periods) / rate
Solving gives:
= 1 x (1 - (1 + 10%)⁻²) / 10%
= 1 x 1.7355
= 1.736
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Each year The Calendar Shop orders calendars for the coming year. Anticipated demand for the coming year is for 2000 calendars. The Shop's fixed costs are $750. Each calendar cost $3 and The Calendar Shop sells each one for $5.00. At the end of July during the next year, The Shop will reduce the calendar price to 60% of the original selling price and will sell all the surplus calendars at this price. Assume the original selling price varies from $4.00 to $7.25 in increments of $0.25. The Calendar Shop can order in increments of 250 calendars up to a maximum of 4000 calendars. Answer the questions below. For each question, start with the original conditions given here.
10.If the sale price is set at $4.75, the Calendar Shop can expect to make the maximum profit when the order quantity is : A. 2,000 B. 2,500 C. 3,000 D. 3,500
Answers
A. 2,000. The maximum profit is obtained when the order quantity is set at 2,000, since this is the anticipated demand for the coming year.
What is profit?Profit is the amount of money a business earns after expenses are deducted from its total revenue. It is the difference between a company's total revenue and expenses, and it is a measure of the business's performance. It serves as an indicator of a company's financial health and is an important metric for investors and owners. Profit is also referred to as net income, net earnings, or the bottom line.
With 2,000 calendars, the Calendar Shop can cover its fixed costs of $750, and will make a profit of $2,250 ($5.00 minus $2.75 per calendar). With an order of more than 2,000 calendars, the price per calendar will have to be reduced, resulting in a lower overall profit.
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Why selling is never ending process in business??
Answers
Answer:
there is always something to be wanted by a consumer. there is a constant selling process due to businesses wanting to achieve profit, that's why they're a business. without selling enough goods, they might not be able to break even with paying employees or receiving/making goods to sell to consumers. selling and profiting will force be a factor in a business setting.
purchased goods of rs 40000 journal entries
Answers
The journal entry for Rs. 40, 000 purchases would include a debit to purchases and credit to cash or accounts payable.
How to enter the journal ?The Purchases account is debited because the business has acquired goods, which is an asset. The Accounts Payable account is credited because the business owes money to the supplier for the goods.
Date Account title Debit Credit
XX -XXXX Purchases Rs. 40, 000
Accounts payable Rs. 40, 000
This journal entry will increase the balance of the Purchases account and the Accounts Payable account. The Purchases account will be used to track the cost of goods sold, and the Accounts Payable account will be used to track the amount of money owed to suppliers.
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Szabi Incorporated, a calendar year taxpayer, purchased two assets during 2021: a machine costing $680,000 and computer equipment costing $553,500. The machine is 7-year recovery property and the computer equipment is 5-year recovery property. Which of the following statements is true? Multiple Choice Under Section 179, Szabi should elect to expense the $680,000 cost of the machine and $370,000 of the cost of the computer equipment. Under Section 179, Szabi should elect to expense the $553,500 cost of the computer equipment machine and $496,500 of the cost of the machine. Under Section 179, Szabi must elect to expense $525,000 of the cost of the machine and $525,000 of the cost of the computer equipment. Under Section 179, Szabi is indifferent as to which costs to expense
Answers
The maximum amount that may be chosen to be deductible under Section 179 for the year 2020 is $1,040,000, according to Sec. 179's requirements. Szabi is not concerned about expenditures to deduct under Section 179.
What is the name of the cash in a business?Revenue is the cash that a firm generates via its operations. Based on the accounting technique used, there are several ways to compute revenue. Sales that are financed will be included as revenue for products or services provided to the client under accrual accounting.
What does business capital entail?The total amount of financial resources needed to create goods or services is referred to as capital in the business world. These cash can be applied to start up costs and everyday expenses.
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How much of the
increase in output per person in each country over the
1980 to 2010 period is due to increased labor productivity?
Answers
Answer:
Explanation:
Each of these components has helped the U.S. raise its labor productivity by 299% from 1950 to 2018. But despite the increased efficiencies of workers, the adjusted median household income only went up 152% in that 68-year period—contributing to a stark wealth divide between the rich and poor.
Olympia Hospital has overall variable costs of 25% of total revenue and fi xed costs of $45 million
per year.
1. Compute the break-even point expressed in total revenue.
2. A patient-day is often used to measure the volume of a hospital. Suppose there are to be 37,500
patient-days next year. Compute the average daily revenue per patient-day necessary to achieve
the break-even total revenue computed in item 1.
Answers
1. The break-even point in total revenue that Olympia Hospital requires is $60 million.
2. The average revenue per patient-day to achieve the above break-even total revenue is $1,600.
What is the break-even point?The break-even point is the point when the total sales are equal to the total costs.
At the break-even point, Olympia Hospital does not incur any loss or earn any profit.
The formula for computing the break-even total revenue is the fixed costs divided by contribution margin ratio.
Data and Calculations:Variable costs = 25% of total revenue
Fixed costs = $45 million
Total patient-days next year = 37,500 patient-days
Contribution margin ratio = 75% (100% - 25%)
Break-even point in total revenue = $60 million ($45 million/75%)
The average revenue per patient-day to achieve break-even total revenue = $1,600 ($60 million/37,500)
Thus, Olympia Hospital needs to achieve a break-even total revenue of $60 million and $1,600 per patient-day next year to break-even.
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In Year 1, the investor acquired 10% ownership of investee and applied fair value method to account for the investment. In Year 2, the investor acquired another 30% ownership and applied equity method to account for the investment (40% ownership). In Year 3, the investor sold 35% ownership of the investee and started using fair value method again to account for the investment (5% ownership). Should the investor apply retrospective adjustment in Year 2 and Year 3
Answers
Answer:
b
Explanation:
Question one
a) The table below gives the interest rates of government bonds sold over a period of 12 months.
Month Interest rate (%) per annum
January 11.5
February 11.3
March 11.4
April 11.6
May 11.8
June 11.7
July 11.8
August 12.5
September 12.0
October 11.7
November 11.6
December 11.6
Required
i) Develop 3-month and 4-month moving averages for this series. (8 marks)
ii) Which moving average provides better forecast? Why? (2 marks)
QUESTION TWO
a) A bakery bakes cakes under the brand name “super cakes.” Irene Juma, the manageress does not know the cost of each cake. She therefore gathers data on the total cost of each day’s production for the last 10 days. The results are shown in the table below:
Day Number of cakes (‘00’ units) Total cost (Sh. ‘000’)
1 22.5 23.0
2 21.0 21.6
3 27.5 23.3
4 21.5 24.0
5 30.0 28.2
6 20.0 22.4
7 24.0 23.1
8 26.5 25.3
9 18.3 20.1
10 17.0 16.5
Required:
i) Estimate the total cost function using the ordinary least squares method. State the fixed cost and unit cost. (11 marks)
ii) If each cake is sold at Sh. 10, determine the break even number of cakes. (3 marks)
b) Two different models are available for the same machine. The production statistics (number of units produced per hour) of these two models are given below. The data was collected on different days.
Model A: 180, 176, 184, 181, 190, 137,
Model B: 195, 194, 190, 192, 187, 185, 187,
Will you conclude that Model A and Model B have the same productivity (6Marks)
QUESTION THREE
The table below shows data on the number of visitors (V) to the Kenyan coastline in a month and the amount of money (M) for each of the 8 months in 2018
Number of visitors V Amount of money spent M (Sh.’M’)
2450 1370
2480 1350
2540 1400
2420 1330
2350 1270
2290 1210
2400 1330
2460 1350
Required
a) Determine the product moment correlation coefficient between number of visitors and amount spent. (4Marks)
b) Give a reason to support fitting a regression model of the form M = a + bv to these data
(2 marks)
c) Find the value of b (4 Marks)
d) Find the equation of the regression line of m and v (4 Marks)
e) Interpret your value of b (2 marks)
f) Use your answer to part (d) to estimate the amount of money spent when the number of visitors to Kenya coastline in a month is 2500. (2 Marks)
g) Comment on the reliability of your estimate in part (f). Give a reason for your answer.
(2 Marks)
Answers
Answer:
Explanation:
help
B. An electronic store
Answers
In electronics Store there is an electronics items such as wire,etc
PLEASE HELP ASAP 10 min left
Answers
Answer: B.
Explanation:
define liquidity economics.
Answers
Explanation:
means how quickly you can get your hands on your cash. In simpler terms, liquidity is to get your money whenever you need it.
two advantages of a small business
Answers
Answer:
independence and control unlimited finacial benefits
Answer:
Being a business owner can be extremely rewarding. Having the courage to take a risk and start a venture is part of the American dream. Success brings with it many advantages:
Independence:
As a business owner, you’re your own boss. You can’t get fired. More importantly, you have the freedom to make the decisions that are crucial to your own business success.
Lifestyle:
Owning a small business gives you certain lifestyle advantages. Because you’re in charge, you decide when and where you want to work. If you want to spend more time on nonwork activities or with your family, you don’t have to ask for the time off. If it’s important that you be with your family all day, you might decide to run your business from your home. Given today’s technology, it’s relatively easy to do. Moreover, it eliminates commuting time.
Financial rewards:
In spite of high financial risk, running your own business gives you a chance to make more money than if you were employed by someone else. You benefit from your own hard work.
Learning opportunities:
As a business owner, you’ll be involved in all aspects of your business. This situation creates numerous opportunities to gain a thorough understanding of the various business functions.
Creative freedom and personal satisfaction:
As a business owner, you’ll be able to work in a field that you really enjoy. You’ll be able to put your skills and knowledge to use, and you’ll gain personal satisfaction from implementing your ideas, working directly with customers, and watching your business succeed.
From the following ledger balances, prepare a trial balance for the Whispering Winds Corp. at June 30, 2022. All account balances are normal.
Accounts Payable $8,300 Service Revenue $7,300
Cash $7,700 Accounts Receivable $4,300
Common Stock $22,500 Salaries and Wages Expense $3,500
Dividends $2,100 Rent Expense $2,300
Equipment $18,200.
Answers
Answer:
Realidades 2 WKBK page 109
Explanation:
Realidades 2 WKBK page 109
Stephanie has been segmenting the market to help her grow her catering business. She is now at final stage in the segmentation process, and she will develop profiles for the customer groups. Why is this important
Answers
Market segmentation to help Stephanie grow her catering business is important as profiling for groups of customers helps marketers develop communication and promotion plans to reach that specific group of customers.
What is market segmentation?Corresponds to the study and research of potential consumers in a market that seeks to divide them into different groups that have similar characteristics, such as preferences and needs, to identify the target audience most aligned with a company's business.
Therefore, through market segmentation, a company is able to identify its potential consumer in a heterogeneous market, being a marketing tool that helps in aligning products and services to consumer needs and desires.
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advertising, personal selling, sales promotion, and public relations make up the: group of answer choices communication model advertising campaign marketing mix promotional mix
Answers
The promotional mix consists of communication tools, including advertising, public relations, sales promotion, direct marketing, and personal selling.
What is a promotional mix?The promotional mix is a term used in marketing to describe a combination of promotional factors that marketers have selected to aid a company in achieving its objectives. As a part of the marketing mix, it has been recognized. For the purpose of achieving a certain marketing objective, a promotional mix is a combination of marketing strategies such as sales, public relations, public relations, and direct marketing.
The employment of a variety of marketing techniques to persuade the target market of the advantages of utilizing a certain good or service and to affect their purchasing habits is known as a promotional mix. Companies aim to do some more attractive, influential promotion through various media because the promotional mix is an essential strategy to increase sales.
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Which of the following financial institutions is a not-for-profit organization?
Commercial Bank
Commercial Bank
Credit Union
Credit Union
Savings and Loan
Savings and Loan
All of the these are correct since financial institutions do not make profits
Answers
Answer:
Credit Union
Explanation:
A not for profit organization means the organization whose main goal is not to make the profit. Here the main goal is to provide the services for a particular services or to give the benefit to the people.
Like the financial services give to the members of the credit union
Therefore as per the given options, the second option is correct
Credit Union is a financial institution that is not for profit organization.
Credit union functions to serve the members by offering the products at affordable rates and fees. The credit union changes the interest fees into products it offers in this way the credit union is not for profit organization. Other financial institutions like commercial bank, savings and loan, banks give these profits to its shareholders.Learn more about bank:
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Silver Star, a construction company, uses a distinctive seven-pointed star that is part of its brand. This star is an example of a
Answers
A construction company called Silver Star employs a striking seven-pointed star as part of its branding. An illustration of an abstract logo is this star.
What is an abstract logo?Marketing experts claim that businesses employ brand names to help potential buyers remember their names. However, a marketing logos campaign that helps clients recall the companies' names is successful.
A geometrically complex shape that conceptually represents your company instead of an identifiable symbol or image is known as an abstract logo. More crucially, abstract logos can add more meaning to an image, turning yours into a distinctive, lively brand.
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Nupur Nagpal, after compleftng her M.B.A. stud es, began to help her father, Shri Bhushan Nagpal, in his business. The business with a limited capital investment, was running successfully. All the workers were happy. Nupur wanted to use the modern business techniques in every area of business, namely, purchase, sale, production, finance, etc. In fact, she wanted to implement the methods, which she had studied in her M.B.A., in her business. As soon as she started interfering in the business with her latest techniques, the workers began to protest against her. Looking at the increasing protest against herself, she became disappointed. Ultimately, she gave up her business and started working in another company. In the business such circumstances were created that even her father could not take any balanced decision. Good Workers began to leave the business. The goodwill of the business in the market went on declining. In no time, the liabilities of business became many times more than his assets. On account of the pressure exerted on him by the creditors, Mr. Nagpal cleared the debts of business by disposing of his domestic properties. Mr. Nagpal could not bear with this situation and owing to his heart failure, he died. Ultimately, the business got closed. (a)To which form of business organization is concerned the above paragraph .
Answers
The above paragraph is related to the sole proprietorship form of business organization. A sole proprietorship is a form of business organization owned and run by a single person who is the owner or the proprietor. The owner manages the business on his own and is solely responsible for the business's profits and losses.
A sole proprietorship is usually preferred by small businesses and individuals due to its ease of formation and low startup costs.
As in the given scenario, Mr. Bhushan Nagpal started the business with a limited capital investment. In a sole proprietorship, the owner has the right to make all the decisions relating to the business without any interference from other individuals.In the given paragraph, Nupur Nagpal, after completing her MBA studies, began to help her father in his business.
She wanted to use modern business techniques in every area of business to make the business grow and prosper.
However, the workers protested against her intervention, and the business started to decline.
The goodwill of the business in the market started to decline, and the liabilities of the business became many times more than his assets. On account of the pressure exerted on him by the creditors, Mr. Nagpal cleared the debts of business by disposing of his domestic properties.
Mr. Nagpal could not bear with this situation and owing to his heart failure, he died. Ultimately, the business got closed. Thus, it can be concluded that the given scenario is related to the sole proprietorship form of business organization.
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The shares of Home Mortgage Corporation are publicly traded in securities markets. Home Mortgage Corporation is
a. a close corporation.
b. a privately held corporation.
c. a public corporation.
d. a publicly held corporation.
Answers
Home Mortgage Corporation stock is traded openly on stock exchanges. A publicly traded company is called Home Mortgage Corporation.
What is a public corporation?
This company is a government-owned entity whose stock is publicly listed on a stock exchange.
It should be mentioned that a public corporation is one that has issued all or a portion of its stock in an IPO to the general public (IPO).
Amtrak, the US Postal Service, and the Corporation for Public Broadcasting are a few instances of public purpose organisations established by the federal government.
A public company's ownership is divided among its shareholders in the general public through the open market trading of shares of stock on stock exchanges or over-the-counter (OTC) marketplaces.
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Your uncle is sole pro-
prietor of a camera shop. You know much more about digital cameras than he does. He is looking for a
partner. What questions would you ask him before you would consider going into business with him?
Answers
Answer:
Does he know managerial and literacy work such as account book keeping, purchase and sale record keeping etc.
Explanation:
Because I will do the sale and purchase of the camera and other technical work myself.
(100 POINTS!!!) LuAnn is a very specific type of photographer. The images that she captures have several prominent characteristics such as representing culture as it is lived rather than mythologized, respectful portraits of members of the community to show their stature, and documenting tribal customs and ceremonies for future generations. What type of photography does LuAnn most likely practice?
A. fashion photography
B. nature photography
C. sports photography
D. indigenous photography
Answers
LuAnn most likely practices indigenous photography. Indigenous photography refers to photographs taken by and for indigenous communities that depict the culture, customs, and traditions of those communities. The characteristics of the images LuAnn captures, such as representing culture as it is lived, respectful portraits, and documenting tribal customs and ceremonies, are typical of indigenous photography. The goal of this type of photography is often to give voice and visibility to indigenous communities, as well as to preserve their cultural heritage for future generations.
A strategy to earn foreign exchange by making domestic industries competitive in the international market is called: a. Export promotion b. Import substitution c. Inward looking trade policy d. Both (b) and (c)
Answers
Answer:
a
Explanation:
It's export promotion
p.s. give me the brainliest answer
an example of a u.s. export is group of answer choices diamonds mined in africa sold to buyers in south america. matchbooks made in mexico sold to a buyer in new jersey. a tv made in china sold to a buyer in azerbaijan. pasta made in italy sold to buyers in spain. a washing machine made in indiana sold to a buyer in france.
Answers
An example of a u.s. export is -a washing machine made in indiana sold to a buyer in france.
Global export resident of another nation. While the foreign customer is an importer, the seller of these goods or the service provider is an exporter.Services such as financial, accounting, and other professional services, tourism, education, and intellectual property rights all play a role in international trade.Customs officials must frequently be involved in the export of goods.Dumping serves as the third justification for a tariff. Competitors may label dumping when a producer exports at a loss. Another situation is when an exporter charges less for a good in the export market than in its home market. [8] The objective and anticipated
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GDP data (billions of dollars)
Personal consumption expenditures $4,750
Exports 810
Government spending 1,400
Social Security taxes 600
Depreciation 450
Indirect business taxes 550
Imports 850
Gross private domestic investment 900
Corporate income taxes 200
Personal taxes 800
Corporate profits 50
Transfer payments 700
Personal income (PI) is:____.
a. $9,210 billion.
b. $8,510 billion.
c. $6,560 billion.
d. $6,610 billion.
e. $10,910 billion.
Answers
Answer:
d. $6,610 billion.
Explanation:
Gross Domestic Product = C + I + G + X - M
Gross Domestic Product = Personal Consumption Expenditures + Gross Private Domestic Investment + Government Spending + Exports - Imports
Gross Domestic Product = $4,750 + $900 + $1,400 + $810 - $850
Gross Domestic Product = $7,010
Net Domestic Product = GDP - Depreciation
Net Domestic Product = $7,010 - $450
Net Domestic Product = $6,560
National Income = $6,560
Personal Income = National Income + Transfer Payments - Social Security Taxes - Corporate Profits
Personal Income = $6,560 + $700 - $600 - $50
Personal Income = $6,610 billion
The two main ways in which marketers address the competition with their
strategies are by satisfying a need better than the competition and by
OA. offering a lower price
OB. entering new markets
C. positioning the product
OD. segmenting the market
Answers
The two main ways in which marketers address the competition with their strategies are by satisfying a need better than the competition and by positioning the product. Option C
What are the two ways in which marketers address the competition with their strategies?Marketers aim to differentiate their product or service from the competition by emphasizing its unique value proposition, which is how it satisfies a need or solves a problem better than other offerings in the market.
Positioning the product is also an important strategy for marketers. This involves creating a distinct image and perception of the product in the minds of consumers, which sets it apart from the competition.
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Find the median and mean of the data set below:
Median =
Tr I
11, 6, 37, 34, 7
Mean =
Answers
The answer is median and mode
How to Find the mean and median
Add up all data values to get the sumCount the number of values in your data setDivide the sum by the countThe mean is the same as the average value in a data set.The median x˜ is the data value separating the upper half of a data set from the lower half.Arrange data values from lowest to highest valueThe median is the data value in the middle of the setIf there are 2 data values in the middle the median is the mean of those 2 values.Median ExampleFor the data set 1, 1, 2, 5, 6, 6, 9 the median is 5.For the data set 1, 1, 2, 6, 6, 9 the median is 4. Take the mean of 2 and 6 or, (2+6)/2 = 4.To learn more about mean and median
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Select all that apply Manufacturing overhead ___
a. is directly traceable to units produced b. is an indirect cost c. contains fixed costs d. consists of many different types of costs
Answers
Manufacturing overhead is an indirect cost. Hence, option B is correct.
What is Manufacturing?Manufacturing overhead costs are the initial charges that a corporation incurs for things like the purchase of materials and indirect labeling. electricity, machinery, maintenance, factory supplies, insurance, etc.
This is often referred to as "factory overhead," and it refers to costs that are further recorded in the balance sheet or in the profit and loss statement and divided by the company's profit even if they have no direct bearing on manufacturing.
Thus, option B is correct.
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