What is the net present value of this investment?
INITIAL COST $500,000
PROJECT LIFE 15 years
SALVAGE VALUE $ 20,000
ANNUAL NET CASH FLOWS $120,000
DISCOUNT RATE 15 %
a. $ 203,684
b. $ 204,142
c. $ 205,669
d. $ 206,263
e. $ 208,721
In: Finance
Equipment was acquired at the beginning of the year at a cost of $75,720. The equipment was depreciated using the straight-line method based upon an estimated useful life of 6 years and an estimated residual value of $7,920.
Required:
| a. | What was the depreciation expense for the first year? |
| b. | Assuming the equipment was sold at the end of the second year for $57,370, determine the gain or loss on sale of the equipment. |
| c. | Journalize the entry to record the sale. Refer to the Chart of Accounts for exact wording of account titles. |
In: Accounting
In: Finance
To calculate the cost of debt for a firm, which of the following WOULD NOT be used?
a. The Present value
b. The number of years to maturity
c. The number of years since it was issued
d. The coupon payment amount
e. The Face value
Homemade leverage and homemade dividends
a. are ways for companies to compete in the areas of leverage and dividends
b. are ways of using personal borrowing, lending, and stock purchases to adjust exposure to policies.
c. Are ways for individuals to avoid taxes when they own stocks of highly leveraged companies.
d. are the same thing
e. None of the above.
When looking for the weighted average cost of capital, we are striving for the WACC that
a. minimizes the value of the firm
b. Balances the weights as evenly as possible between debt and equity.
c. Is the largest number.
d. maximizes the value of the firm.
e. Balances the rates on debt and equity as evenly as possible.
Financial distress costs
a. could result in bankruptcy of the firm
b. could be something like requiring payments COD.
c. are a possible result of too much debt
d. all of the above
e. None of the above
In: Finance
Equipment was acquired at the beginning of the year at a cost of $79,560. The equipment was depreciated using the straight-line method based upon an estimated useful life of 6 years and an estimated residual value of $7,800.
a. What was the depreciation expense for the first year?
$
b. Assuming the equipment was sold at the end of the second year
for $60,100, determine the gain or loss on sale of the
equipment.
$
c. Journalize the entry to record the sale. If an amount box does not require an entry, leave it blank or enter "0".
In: Accounting
Critically discuss the effect of the cost of capital on financial decisions.
In: Finance
Computer equipment was acquired at the beginning of the year at a cost of $27,500 that has an estimated residual value of $1,700 and an estimated useful life of 5 years.
a. Determine the depreciable cost.
$
b. Determine the double-declining-balance rate.
%
c. Determine the double-declining-balance depreciation for the
first year.
$
In: Accounting
The development cost of the target application is estimated at = $705588
The lifetime of the application is FOUR years. Lifetime = 4 years
The operation cost for each year is = $87055
The benefit derived from the execution of the target application for each year during its lifetime = $870558
The return rate of the other investments will be = 8%
calculate if the new application pays for itself? and when will it pay for itself?
PLEASE SHOW YOUR WORK, Thanks for your help.
In: Finance
As part of the calculation for cost of goods sold it is necessary to determine the value of goods on hand, termed merchandise inventory. Accountants use two basic methods for determining the amount of merchandise inventory. Identify the two methods and describe the circumstances (including examples of users of each method) under which each method would be used. Describe the computation necessary to arrive at the cost of goods sold figure on a merchandising company's income statement.
In: Accounting
In: Finance