4 PTS Team Shirts, Inc. had net cash from operating activities of$125,000. It paid $105,000 to buy a new computersystem by signing a $85,000 note and paying the balance.Net cash from (or used for) investing activities for theperiod wasa. $40,000b. ($10,000)c. $10,000d. ($20,000)

The net cash flow from/used for investing activities is calculated as follows: Net cash flow from…

Answered: Team Shirts, Inc. had net cash from…

SWFT Comprehensive Vol 2020

43rd Edition

ISBN:9780357391723

Author:Maloney

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Chapter19: Corporations: Distributions Not In Complete Liquidation

Section: Chapter Questions

Problem 7BCRQ

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Your employer, Rubio LLC, is considering an investment in an office building that has the following cash flows: Purchase in Year 0…………… $ -2,750,000 Year 1………………. 220,000 Year 2……………….. 226,000 Year 3……………….. 250,000 Year 4………………… 255,000 Year 5 ………………… 230,000, and a sale @ $3,290,000 takes place EOY 5 The company’s weighted average cost of capital that they use as their discount rate for such calculations is 12% What would be the total cash flows in Year 5, taking into consideration the cash flows, annual debt service, sale price and the balance on the loan at the EOY 5? $1,662,985 $1,937,607 $1,802,986 $1,343,455 What is the leveraged IRR of the project ? 64% 58% 48% 55% In the above problem, you might expect The Yield to be higher than the discount rate because you sold the property at a profit. The NPV to be positive because the IRR is higher than the discount rate The NPV to be negative because the IRR is lower than the discount rate All of the…
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Team Shirts, Inc. had net cash from operating activities of $125,000. It paid $105,000 to buy a new computer system by signing a $85,000 note and paying the balance. Net cash from (or used for) investing activities for the period was a. $40,000 b. ($10,000) c. $10,000 d. ($20,000)