A company is considering the purchase of new equipment for $69,000. The projected annual net cash flows are $27,800. The machine has a useful life of 3 years and no salvage value. Management of the company requires a 9% return on investment. The present value of an annuity of $1 for various periods follows: Period Present value of an annuity of $1 at 9% 1 0.9174 2 1.7591 3 2.5313 What is the net present value of this machine assuming all cash flows occur at year-end?

Answers

Answer 1
Answer:

Answer:

The correct answer is $1,370

Explanation:

The computation of net present value is shown below:-

For computing the net present value first we need to find out the present value of inflow

Present Value of Inflow of 3 Years at 9% = Net cash flow × Number of years

= $27,800 × 2.5313

= $70,370

Net Present Value = Present value of inflow - Initial Outflow

= $70,370 - $69,000

= $1,370

Therefore for computing the net present value we simply deduct the initial outflow from present value of inflow.


Related Questions

Presented below are a number of balance sheet items for Montoya, Inc. for the current year, 2020. Goodwill $ 125,000 Accumulated Depreciation-Equipment $ 292,000Payroll Taxes Payable 177,591 Inventory 239,800 Bonds payable 300,000 Rent payable (short-term) 45,000 Discount on bonds payable 15,000 Income taxes payable 98,362 Cash 360,000 Rent payable (long-term) 480,000 Land 480,000 Common stock, $1 par value 200,000 Notes receivable 445,700 Preferred stock, $10 par value 150,000 Notes payable (to banks) 265,000 Prepaid expenses 87,920 Accounts payable 490,000 Equipment 1,470,000 Retained earnings ?Retained earnings ?Debt investments (trading) 121,000Income taxes receivable 97,630Accumulated depreciation-buildings 270,200Notes payable (long-term) 1,600,000Buildings 1,640,000Required:Required:1. Prepare a classified balance sheet in good form.
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Customers who face the same general needs of the marketplace but are likely to experience them months or years earlier than the rest of the market and stand to benefit disproportionately from solutions to those needs are referred to as _____. Multiple Choice A. laggards B. lead users C. early followers D. intrapreneurs
Which of the following assumptions is likely to be met in the real world? Group of answer choices All labor has zero costs of mobility. Demand for labor is identical in every labor market. All labor is homogeneous. Nonpecuniary factors in each job are not the same.

Assume the carrying capacity of the earth is 13 billion. Use the 1960s peak annual growth rate of 2.1​% and population of 3 billion to predict the base growth rate and current growth rate with a logistic model. Assume a current population of 6.8 billion. How does the predicted growth rate compare to the actual growth rate of about 1.2​% per​ year?

Answers

Answer:

The predicted growth rate is compared at  -2%

Explanation:

To calculate growth rate, G.R = X(1-(Population)/(Carrying capacity of earth))

In the 1960s,

The carrying capacity of the earth = 13 billion

Earth's population = 3 billion

X = ((Growth rate in 1960))/((1-(Population in 1960)/(Carrying Capacity in 1960)) )

X = 0.021 (1-(3,000,000,000)/(13,000,000,000) )

X = 0.021 × 0.77

X = 0.01617 = 1.6%

Current population calculation:

Growth Current population (C.p) = 0.016(1-(current population)/(current capacity))

Growth Current population (C.p) = 0.016(1 - (6,800,000,000)/(3,000,000,000) )

Growth Current population (C.p) = 0.016(-1.267)

Growth rate = -0.020272 = -2%

The predicted growth rate compare to the actual growth rate of about 1.2​% per​ year at -2%.

Labuk is a 20-year employee of Whirley Corporation. During his career with Whirley, Labuk has felt uncomfortable with his supervisor, Bob, because of his behavior. On one occasion, Bob told him that foreigners should stop seeking jobs in the United States if they cannot perform. On another occasion, Bob yelled at Labuk and called him an "idiot." Which of the following may be true in this case? a. Labuk does not have a harassment claim based on national origin because these two incidents, although offensive, do not create a hostile work environment.
b. Labuk does not have a harassment claim based on national origin because the Fair Labor Standards Act (FLSA) allows employers to discriminate in favor of U.S. citizens.
c. Labuk has a harassment claim based on national origin because Title VII of the Civil Rights Act of 1964 provides protection against discrimination based on country of citizenship.
d. Labuk has a harassment claim based on national origin under Title VII of the Civil Rights Act of 1964 because he belongs to a protected racial class.

Answers

Answer:

a. Labuk does not have a harassment claim based on national origin because these two incidents, although offensive, do not create a hostile work environment.

Explanation:

In order for Labuk to have a valid harassment claim, his supervisor must have created an offensive and hostile work environment. Apparently, the supervisor's bad attitude is not shared by Labuk's colleagues, at least it doesn't say so in the question.

The supervisor's attitude might not have been appropriate, but two incidents in 20 years is something can happen to anyone and not just Labuk. Imagine how many times an employee might argue or have some type of dispute with a supervisor during 20 years. Labuk should have reported both incidents to a company's manager.

A city wants to raise revenues to build a new municipal swimming pool next year. The mayor suggests that the city raise the price of admission to the current municipal pools this year to raise revenues. The city manager suggests that the city lower the price of admission to raise revenues. Who is correct?a. The mayor would be correct if demand were price elastic; the city manager would be correct if demand were price inelastic.

b. The mayor would be correct if demand were price inelastic; the city manager would be correct if demand were price elastic.

c. Both the mayor and city manager would be correct if demand were price elastic.

d. Both the mayor and city manager would be correct if demand were price inelastic.

Answers

Answer:

b. The mayor would be correct if demand were price inelastic; the city manager would be correct if demand were price elastic.

Explanation:

-An elastic demand is when the change in the price generates a high percentage change in the quantity demanded.

-An inelastic demand is when the change in the price generates a low percentage change in the quantity demanded.

According to this, the answer is that the mayor would be correct if demand were price inelastic because the increase in price won't generate an important change in the demand which allows to increase the revenues and the city manager would be correct if demand were price elastic because the decrease in the price would generate a higher change increasing the demand which can allow to raise revenues.

On December 31, 2021, Larry's Used Cars had balances in Accounts Receivable and Allowance for Uncollectible Accounts of $70,000 and $1,250, respectively. During 2022, Larry's wrote off $2,675 in accounts receivable and determined that there should be an allowance for uncollectible accounts of $5,650 at December 31, 2022. Bad debt expense for 2022 would be:

Answers

Answer:

December 31, 2022 Bad debts $ 2975

Explanation:

On December 31, 2021,  Accounts Receivable  $70,000

Allowance for Uncollectible Accounts $1,250

During 2022, Bad Debts  $2,675

Allowance for Uncollectible Accounts  $5,650 at December 31, 2022

Bad debt expense for 2022 would be

December 31, 2021

Allowance for Uncollectible Accounts $1,250

During 2022, Bad Debts  $2,675

Required Adjustment $ 1425

December 31, 2022 Bad debts $ 2975

Allowance for Uncollectible Accounts  $5,650 adjusted Balance

Allowance for Uncollectible Accounts Written Off  $2,675

Required Adjustment  $ 2975

Answer:

$7,075

Explanation:

Bad debt expense occur when the account receivables are no longer collectible due to inability to fulfill financial obligations by the customers in which it must be recorded and accounted for every time a company prepares its financial statements

Bad debt expense = $5,650− ($1,250 − $2,675) = $7,075

Therefore Bad debt expense for 2022 would be $7,075

A client has an options account that is qualified to buy options and sell covered calls. The client calls his representative, telling him that he wants to sell naked calls in the account. Which statement is TRUE about this?A. The representative can do this without taking any further action
B. The "Special Statement for Uncovered Options Writers" must be provided before executing the transaction
C. The "Options Disclosure Document" must be provided before executing the transaction
D. The representative must open a separate options account for the customer and segregate the resulting naked options positions

Answers

Answer:

The correct answer is letter "B": The "Special Statement for Uncovered Options Writers" must be provided before executing the transaction.

Explanation:

A naked call is a type of strategy options traders use when writing a call option without owning the underlying assets. For this to be possible, the trader must sign an options agreement and the Registered Options Principal (ROP) must approve the account so the trader can write naked options.  

Before proceeding the "Special Statement for Uncovered Options Writers" must be provided.

in which order would the expectancy theory place the following events? a) outcome valence, performance, effort b) performance, effort, outcome valence c) effort, outcome valence, performance d) performance, outcome valence, effort e) effort, performance, outcome valence

Answers

Answer: e. effort, performance, outcome valence

Explanation:

The expectancy theory analyses and explains the reason why people behave the way they do. The expectancy theory explains that individual behave the way they do because they believe their efforts which they put into a particular activity will bring about an outcome.

The first thing that comes first is the effort which one puts into an activity, after then is the performance and lastly the outcome.

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