Multiple choice 1. What is the Income from operation A. 20,000 B. 55,000 C. 60,000 D. 190,000 2. What is the net income A. 60,000 B. 65,000 C. 55,000 D. 180,000
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- Exhibit 1 Pre-tax rate of return: r= 0.10 Tax rate on the returns to investment: t = 0.25 Consider the information in the exhibit above. If the government spending displaces private consumption, then the opportunity cost for the government project should a. 0.075 11. b. 0.10 c. 0.25 d. 0.75 Consider the information in the exhibit above. If the government spending displaces private savings, then the opportunity cost for the government project should a. 0.075 b. 0.10 c. 0.25 d. 0.75 12.Consider the following sets of investment projects n(years) A($) B($) C($) D($) 0 -3,500 -5,800 -5,200 -40,000 1 600 3,000 2,000 12,000 2 600 2,000 4,000 14,000 3 1,000 1,000 2,000 18,000 4 1,000 500 4,000 18,000 5 1,000 500 2,000 14,000 Compute the equivalent annual worth of each project at i=10% and determine the acceptability of each project.D Open recovered wor x✓ fx 0 A B C D E F OMEGA PROJECT CASH FLOW INFORMATION Year Inflow Outflow = Newflow 0 1 2 3 G -$225,000 -$190,000 $150,000 $190,000 $215,000 $175,000 $197,000 $70,000 $582,000 $225,000 0 $190,000 $150,000 0 $220,000 $30,000 4 $215,000 0 5 $205,000 $30,000 6 $197,000 0 7 $100,000 $30,000 Total $1,087,000 $505,000 Required ROI 18% Project Omega NPV (Year 0) Project Omega Total NPV Which of the two projects would you fund and why? ▶ 3T Company Data + Ready have on project selection? (Reference Section 2.4, pg 38-39) 19 MAY 910 30 H NPV I K L M N O ALPHA PROJECT CASH FLOW INFORMATION Year Inflow Outflow = 0 1 $50,000 2 $150,000 3 $250,000 4 $250,000 5 $200,000 6 $180,000 7 $120,000 Total $ 1,200,000 Required ROI Project Alpha NPV (Year 1). Project Alpha NPV 1 tv $300,000 $100,000 0 $50,000 0 $50,000 0 $30,000 $530,000 18% d P Newflow -$300,005 -$50,000 $150,000 $200,000 $250,000 $150,000 $180,000 $90,000 $670,000 A Q NPV
- Q22 The amount spent on training and developing human resources increase its efficiency so it is either ______ and shown in the balance sheet or ____________ and shown in the Profit & loss account. a. Calculated ; Appreciated b. Computed; Depreciated c. Capitalized; Amortized d. None of theseQuestion 10 (Ignore income taxes in this problem.) Z Company has gathered the following data on a proposed investment project: Investment in equipment.................................. $150,000 Annual cash flows........................................... $40,000 Salvage value of equipment............................. $0 Life of the equipment....................................... 10 years Required rate of return.................................... 10% The company uses straight-line depreciation on all equipment. Required: (iii) Calculate the ARRQuestion 10 of 25 Based on the following data, what is the amount of working capital? Accounts payable Accounts receivable Cash Intangible assets Inventory Long-term investments Long-term liabilities Short-term investments Notes payable (short-term) Property, plant, and equipment Prepaid insurance $404240 O $411680 > O $458800 $79360 141360 86800 124000 171120 198400 248000 99200 69440 1661600 2480
- b. If the BTIRR were partitioned based on BTCFo and BTCFs' what proportions of the BTIRR would be represented by each?Option A В -А C-B C-A -4500 -7500 -9000 -3000 -1500 -4500 1500 3000 3400 1500 400 1900 2. 2000 3000 3740 1000 740 1740 3 2500 3000 4114 50 1114 1614 8/C or AB/C 0.91 1.18 1.07 1.11 1.31 1.04 Your accountant has provided you with the table below comparing three alternatives using benefit-cost ratio analysis and an MARR of 6%, the best option is: Option A Option B O Option C There is not enough information provided. YearSubject: accounting
- Question 11 (Ignore income taxes in this problem.) Z Company has gathered the following data on a proposed investment project: Investment in equipment.................................. $150,000 Annual cash flows........................................... $40,000 Salvage value of equipment............................. $0 Life of the equipment....................................... 10 years Required rate of return.................................... 10% The company uses straight-line depreciation on all equipment. Required: (iv) Is this a viable project?11:52 Investment Appraisal (Year 2 Column 2... Project 1 Project 2 Project 3 8. When calculating NPV will using a higher discount factor lead to ...? A higher NPV A lower NPV The same NPV 9. Which method of investment appraisal would be best for a business that has liquidity problems? NPV ARR ... Activity Chat Teams Assignments More 10Asset End of year Amount Appropriate Required Return D 1 through 5 $1,500 12% 6 $8,500 Cash Flow By using cell references to the given data and the function PV, Calculate the value of asset D.