Helga is considering the purchase of a small restaurant. The purchase price listed by the seller is $920,000. Helga has used pastfinancial information to estimate that the net cash flows (cash inflows less cash outflows) generated by the restaurant would be asfollows:Years1-678910Amount$ 92,00082,00072,00062,00052,000If purchased, the restaurant would be held for 10 years and then sold for an estimated $820,000.Required:Determine the present value, assuming that Helga desires a 10 % rate of return on this investment. (Assume that all cash flows occur atthe end of the year.)Note: Do not round intermediate calculations. Round your final answers to nearest whole dollar amount. Use tables, Excel, or afinancial calculator. (FV of $1. PV of $1. FVA of $1. PVA of $1. FVAD of $1 and PVAD of $1)Future Amount$92,00010%82,00010%72,00010%62,00010%52,00010%820,000 10%n= Present ValueShould the restaurant be purchased?

The present value may be determined using formulae that consider future cash flows, time period, and…

Answered: WS: ars -6 7 8 9 10 Amount $ 92,000…

Business

Accounting

WS: ars -6 7 8 9 10 Amount $ 92,000 82,000 72,000 62,000 52,000 rchased the

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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! Required information [The following information applies to the questions displayed below.] On January 1, Park Corporation and Strand Corporation had condensed balance sheets as follows: Park Strand $ 31,300 $ 116,000 107,500 Current assets Noncurrent assets 49,200 Total assets $ 223,500 $ 80,500 $ 52,500 66,000 105,000 Current liabilities $ 30,500 Long-term debt Stockholders' equity 50,000 $ 80,500 Total liabilities and equities $ 223,500 On January 2, Park borrowed $70,400 and used the proceeds to obtain 80 percent of the outstanding common shares of Strand. The acquisition price was considered proportionate to Strand's total fair value. The $70,400 debt is payable in 10 equal annual principal payments, plus interest, beginning December 31. The excess fair value of the investment over the underlying book value of the acquired net assets is allocated to inventory (60 percent) and to goodwill (40 percent). On a consolidated balance sheet as of January 2, what should be the amount for…
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P Flag question A recent alumnus of your university gifted money to the school to fund annual scholarships for needy students. The school expects to earn an average rate of return of 6.5 percent and distribute $40,000 annually in scholarships. What was the amount of the gift? a. $260,000.00 b. $328,500.00 c. $615,384.62 d. $658,929.38 Clear my choice I|