Partial Balance Sheets as of December 31 Assets Cash Accounts receivable 2016 $20,000 90,000 20,000 2015 $40,000 60,000 25,000 Inventory Liabilities Accounts payable Additional information for 2016: $72,000 $58,000 Net income was $170,000. Gain on Sale of Equipment was $15,000. Depreciation expense was $30,000. Credit Sales totaled $400,000. Cost of goods sold totaled $145,000.

Partial Balance Sheets as of December 31 Assets Cash Accounts receivable 2016 $20,000 90,000 20,000 2015 $40,000 60,000 25,000 Inventory Liabilities Accounts payable Additional information for 2016: $72,000 $58,000 Net income was $170,000. Gain on Sale of Equipment was $15,000. Depreciation expense was $30,000. Credit Sales totaled $400,000. Cost of goods sold totaled $145,000.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Similar questions

Monroe, Inc., is evaluating a project. The company uses a 13.8 percent discount rate for this project. Cost and cash flows are shown in the table. What is the NPV of the project? Year Project 0 ($11,368,000) 1 $ 2,127,589 2 $ 3,787,552 3 $ 3,125,650 4 $ 4,115,899 5 $ 4,556,424 Round to two decimal places.
Consider the following two projects: Cash flows Project A Project B C0�0 −$ 240 −$ 240 C1�1 100 123 C2�2 100 123 C3�3 100 123 C4�4 100 a. If the opportunity cost of capital is 8%, which of these two projects would you accept (A, B, or both)? b. Suppose that you can choose only one of these two projects. Which would you choose? The discount rate is still 8%. c. Which one would you choose if the cost of capital is 16%? d. What is the payback period of each project? e. Is the project with the shortest payback period also the one with the highest NPV? f. What are the internal rates of return on the two projects? g. Does the IRR rule in this case give the same answer as NPV? h. If the opportunity cost of capital is 8%, what is the profitability index for each project? i. Is the project with the highest profitability index also the one with the highest NPV? j. Which measure should you use to choose between the projects?
am. 114.
0 No3. The Serrano Corporation is considering signing a 1-year contract with one of two computer-based marketing firms. Although one is more expensive, it offers a more extensive program and thus will provide higher after-tax net cash flows. Assume these two options are mutually exclusive and that the required rate of return is 12 percent. Given the following after-tax net cash flows: Year 0 1 Option A -$50,000 70,000 Option B -$100,000 130,000 a. Calculate the net present value. Calculate the profitability index. b. c. Calculate the internal rate of return. d. If there is no capital - rationing constraint, which project should be selected? If there is capital-rationing constraint, how should the decision be made?
(Appendix 13A and 13B) A company anticipates a tax-deductible cash expense of $40,000 in year 2 of a project. The company's tax rate is 30%, and its discount rate is 10%. What is the approximate present value of this future cash outflow? Do not round your intermediate calculations and round the final answer to the nearest whole dollar.) Multiple Choice $28,000. $23,140. $12,000. $9,917.
Evaluate the following capital project proposals, given a capital budget of $750 million. project: IO (millions) PV(NCF 1-n) (millions) A 100 120 B 500 625 C 400 490 D 250 290 please show work. I don't understand how to find the NPV Answer: NPV= 165 million IO = 750 million
b. If South Pangean expenditures are $30 million without interest payments, that means its expenditures with interest payments are $ Emillion.
A project that provides annual cash flows of $11322 for eight years costs $80145 today. At what discount rate would you be indifferent between accepting the project and rejecting it? (Enter your answer as a percentage, omit the "%" sign in your response, and round your answer to 2 decimal places. For example, 0.12345 or 12.345% should be entered as 12.35.)
Although the solution to question number 8 is incorrect, it is not explained why $1700 is the correct option and not $2300.
A 180. Subject:- finance
19. Capital rationing (S5.4) Suppose you have the following investment opportunities, but only $90,000 available for investment. Which projects should you take? Project NPV ($) Investment ($) 1 2 3 4 5 6 5,000 5,000 10,000 15,000 15,000 3,000 10,000 5,000 90,000 60,000 75,000 15,000 Page 144
I am having trouble calculating the answer to this question since I am only given the cost and PI of the project 39. If a project has a cost of $30,000 and a PI = 1.5, then: a. its cash inflows are $45,000 b. the PV of its cash inflows = $20,000 c. its IRR = 50% D. its NPV = $15,000 e. two of the above