Cash flow : Cash flow is the monetary consideration (return or income) received by the business for its long-term capital investment. To determine: The annual net cash flow from operating the cruise ship.
Cash flow : Cash flow is the monetary consideration (return or income) received by the business for its long-term capital investment. To determine: The annual net cash flow from operating the cruise ship.
Solution Summary: The author explains that cash flow is the monetary consideration (return or income) received by the business for its long-term capital investment. The net present value method is used to compare the initial cash outflow of investment with the present
Definition Definition Calculation used to evaluate the investment and financing decisions that involve cash flows occurring over multiple periods. NPV is calculated as the difference between the present value of cash inflow and cash outflow. NPV is used for capital budgeting and investment planning as well as to compare similar investment alternatives.
Chapter 26, Problem 26.11EX
a.
To determine
Cash flow:
Cash flow is the monetary consideration (return or income) received by the business for its long-term capital investment.
To determine: The annual net cash flow from operating the cruise ship.
(b)
To determine
Net present value method:
Net present value method is the method which is used to compare the initial cash outflow of investment with the present value of its cash inflows. In the net present value, the interest rate is determined by the business, based on the net income from the investment, and it is also called as the discounted cash flow method.
To calculate: The net present value of the investment.
Calculate the overhead allocation rate using direct material cost.
Accurate Answer
Harrison Company reports the following updated cost information for
August:
•
Cost of goods manufactured: $150,000
•
Direct materials used: $30,000
•
•
Work in process inventory, Aug. 1: $25,000
Work in process inventory, Aug. 31: $20,000
Direct labor incurred: $70,000
What is the amount of manufacturing overhead incurred by Harrison
Company in August?