Particulars Amount ($) Sales 2,735,000 Less: Variable expenses 45% 1,230,750 Contribution margin 1,504,250 Less: Fixed expenses 735,000 Earnings before depreciation , interest and taxes 769,250 Less: Depreciation 595,000 Earnings after depreciation or EBIT 174,250 Add: Depreciation 595,000 Annual cash inflow 769,250 Computation of actual net present value is required to be computed when variable expenses are changed to 45%.

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Answer 1

Question

Chapter 13, Problem 13F15

NPV is computed by deducting initial investment amount from the present value.

Project’s actual net present value will be calculated in the following way, when variable expenses changes to 45%:

Computation of annual cash inflow when variable expenses changed to 45%:

To determine

Particulars Amount ($)

Sales 2,735,000

Less: Variable expenses 45% 1,230,750

Contribution margin 1,504,250

Less: Fixed expenses 735,000

Earnings before depreciation, interest and taxes 769,250

Less: Depreciation 595,000

Earnings after depreciation or EBIT 174,250

Add: Depreciation 595,000

Annual cash inflow 769,250

Computation of actual net present value is required to be computed when variable expenses are changed to 45%.

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Jones Enterprises recorded the following events last year: ⚫ Repurchase by the company of its own common stock: $50,000 . Sale of long-term investment: $80,000 • Interest paid to lenders: $20,000 Dividends paid to the company's shareholders: $90,000 Collection by Jones of a loan made to another company: $60,000 . Payment of taxes to governmental bodies: $30,000 Based solely on the information above, the net cash provided by (used in) investing activities on the statement of cash flows would be: A. $140,000 B. $110,000 C. $130,000 D. $80,000

Answer 2

Question

Chapter 13, Problem 13F15

NPV is computed by deducting initial investment amount from the present value.

Project’s actual net present value will be calculated in the following way, when variable expenses changes to 45%:

Computation of annual cash inflow when variable expenses changed to 45%:

To determine

Particulars Amount ($)

Sales 2,735,000

Less: Variable expenses 45% 1,230,750

Contribution margin 1,504,250

Less: Fixed expenses 735,000

Earnings before depreciation, interest and taxes 769,250

Less: Depreciation 595,000

Earnings after depreciation or EBIT 174,250

Add: Depreciation 595,000

Annual cash inflow 769,250

Computation of actual net present value is required to be computed when variable expenses are changed to 45%.

Expert Solution & Answer

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Check out a sample textbook solution

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Answer 3

Question

Chapter 13, Problem 13F15

NPV is computed by deducting initial investment amount from the present value.

Project’s actual net present value will be calculated in the following way, when variable expenses changes to 45%:

Computation of annual cash inflow when variable expenses changed to 45%:

To determine

Particulars Amount ($)

Sales 2,735,000

Less: Variable expenses 45% 1,230,750

Contribution margin 1,504,250

Less: Fixed expenses 735,000

Earnings before depreciation, interest and taxes 769,250

Less: Depreciation 595,000

Earnings after depreciation or EBIT 174,250

Add: Depreciation 595,000

Annual cash inflow 769,250

Computation of actual net present value is required to be computed when variable expenses are changed to 45%.

Expert Solution & Answer

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Check out a sample textbook solution

See solution

Answer 4

Question

Chapter 13, Problem 13F15

NPV is computed by deducting initial investment amount from the present value.

Project’s actual net present value will be calculated in the following way, when variable expenses changes to 45%:

Computation of annual cash inflow when variable expenses changed to 45%:

To determine

Particulars Amount ($)

Sales 2,735,000

Less: Variable expenses 45% 1,230,750

Contribution margin 1,504,250

Less: Fixed expenses 735,000

Earnings before depreciation, interest and taxes 769,250

Less: Depreciation 595,000

Earnings after depreciation or EBIT 174,250

Add: Depreciation 595,000

Annual cash inflow 769,250

Computation of actual net present value is required to be computed when variable expenses are changed to 45%.

Expert Solution & Answer

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Check out a sample textbook solution

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Answer 5

Chapter 13, Problem 13F15

NPV is computed by deducting initial investment amount from the present value.

Project’s actual net present value will be calculated in the following way, when variable expenses changes to 45%:

Computation of annual cash inflow when variable expenses changed to 45%:

To determine

Particulars Amount ($)

Sales 2,735,000

Less: Variable expenses 45% 1,230,750

Contribution margin 1,504,250

Less: Fixed expenses 735,000

Earnings before depreciation, interest and taxes 769,250

Less: Depreciation 595,000

Earnings after depreciation or EBIT 174,250

Add: Depreciation 595,000

Annual cash inflow 769,250

Computation of actual net present value is required to be computed when variable expenses are changed to 45%.

Answer 6

Chapter 13, Problem 13F15

NPV is computed by deducting initial investment amount from the present value.

Project’s actual net present value will be calculated in the following way, when variable expenses changes to 45%:

Computation of annual cash inflow when variable expenses changed to 45%:

To determine

Particulars Amount ($)

Sales 2,735,000

Less: Variable expenses 45% 1,230,750

Contribution margin 1,504,250

Less: Fixed expenses 735,000

Earnings before depreciation, interest and taxes 769,250

Less: Depreciation 595,000

Earnings after depreciation or EBIT 174,250

Add: Depreciation 595,000

Annual cash inflow 769,250

Computation of actual net present value is required to be computed when variable expenses are changed to 45%.

Answer 7

Chapter 13, Problem 13F15

NPV is computed by deducting initial investment amount from the present value.

Project’s actual net present value will be calculated in the following way, when variable expenses changes to 45%:

Computation of annual cash inflow when variable expenses changed to 45%:

To determine

Particulars Amount ($)

Sales 2,735,000

Less: Variable expenses 45% 1,230,750

Contribution margin 1,504,250

Less: Fixed expenses 735,000

Earnings before depreciation, interest and taxes 769,250

Less: Depreciation 595,000

Earnings after depreciation or EBIT 174,250

Add: Depreciation 595,000

Annual cash inflow 769,250

Computation of actual net present value is required to be computed when variable expenses are changed to 45%.

Answer 8

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Answer 9

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Answer 11

Ch. 13.A - Prob. 1E Ch. 13.A - Prob. 2E Ch. 13.A - Prob. 3E Ch. 13.A - Prob. 4E Ch. 13.A - Exercises 13A-5 Basic Present Value Concepts...Ch. 13.A - Prob. 6E Ch. 13.C - Prob. 1E Ch. 13.C - Prob. 2E Ch. 13.C - PROBLEM 13C-3 Income Taxes and Net Present Value...Ch. 13.C - Prob. 4P

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Chapter 13 Solutions

Particulars	Amount ($)
Sales	2,735,000
Less: Variable expenses 45%	1,230,750
Contribution margin	1,504,250
Less: Fixed expenses	735,000
Earnings before depreciation, interest and taxes	769,250
Less: Depreciation	595,000
Earnings after depreciation or EBIT	174,250
Add: Depreciation	595,000
Annual cash inflow	769,250