acc 206 week 5 assignment
Chapter Eight Problems
Please complete the following 5 exercises below in either Excel or a word document (but must be single document). You must show your work where appropriate (leaving the calculations within Excel cells is acceptable). Save the document, and submit it in the appropriate week using the Assignment Submission button.
Chapter 8 Exercise 1:
1. Basic present value calculations
Calculate the present value of the following cash flows, rounding to the nearest dollar:
a.
A single cash inflow of $12,000 in five years, discounted at a 12% rate of return.
b.
An annual receipt of $16,000 over the next 12 years, discounted at a 14% rate of return.
c.
A single receipt of $15,000 at the end of Year 1 followed by a single receipt of $10,000 at the end of Year 3. The company has a 10% rate of return.
d.
An annual receipt of $8,000 for three years followed by a single receipt of $10,000 at the end of Year 4. The company has a 16% rate of return.
Chapter 8 Exercise 4:
4. Cash flow calculationsand net present value
On January 2, 20X1, Bruce Greene invested $10,000 in the stock market and purchased 500 shares of Heartland Development, Inc. Heartland paid cash dividends of $2.60 per share in 20X1 and 20X2; the dividend was raised to $3.10 per share in 20X3. On December 31, 20X3, Greene sold his holdings and generated proceeds of $13,000. Greene uses the net-present- value method and desires a 16% return on investments.
a.
Prepare a chronological list of the investment's cash flows. Note: Greene is entitled to the 20X3 dividend.
b.
Compute the investment's net present value, rounding calculations to the nearest dollar.
c.
Given the results of part (b), should Greene have acquired the Heartland stock? Briefly explain.
Chapter 8 exercise 5:
5. Straightforwardnet present value and internal rate of return
The City of Bedford is studying a 600-acre site on Route 356 for a new landfill. The startup cost has been calculated as follows:
Purchase cost: $450 per acre
Site preparation: $175,000
The site can be used for 20 years before it reaches capacity. Bedford, which shares a facility in Bath Township with other municipalities, estimates that the new location will save $40,000 in annual operating costs.
a.
Should the landfill be acquired if Bedford desires an 8% return on its investment? Use the net-present-value method to determine your answer.
Chapter 8 Problem 1:
1. Straightforward net-present-value and payback computations
STL Entertainment is considering the acquisition of a sight-seeing boat for summer tours along the Mississippi River. The following information is available:
Cost of boat |
$500,000 |
Service life |
10 summer seasons |
Disposal value at the end of 10 seasons |
$100,000 |
Capacity per trip |
300 passengers |
Fixed operating costs per season (including straight-line depreciation) |
$160,000 |
Variable operating costs per trip |
$1,000 |
Ticket price |
$5 per passenger |
All operating costs, except depreciation, require cash outlays. On the basis of similar operations in other parts of the country, management anticipates that each trip will be sold out and that 120,000 passengers will be carried each season. Ignore income taxes.
Instructions:
By using the net-present-value method, determine whether STL Entertainment should acquire the boat. Assume a 14% desired return on all investments- round calculations to the nearest dollar.
Chapter 8 Problem 4:
4. Equipment replacement decision
Columbia Enterprises is studying the replacement of some equipment that originally cost $74,000. The equipment is expected to provide six more years of service if $8,700 of major repairs are performed in two years. Annual cash operating costs total $27,200. Columbia can sell the equipment now for $36,000; the estimated residual value in six years is $5,000.
New equipment is available that will reduce annual cash operating costs to $21,000. The equipment costs $103,000, has a service life of six years, and has an estimated residual value of $13,000. Company sales will total $430,000 per year with either the existing or the new equipment. Columbia has a minimum desired return of 12% and depreciates all equipment by the straight-line method.
Instructions:
a.
By using the net-present-value method, determine whether Columbia should keep its present equipment or acquire the new equipment. Round all calculations to the nearest dollar, and ignore income taxes.
b.
Columbia's management feels that the time value of money should be considered in all long-term decisions. Briefly discuss the rationale that underlies management's belief.
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Tutorial xxxxxxxx
xxxxxxxxxxx note x | Intermediate xxxxxxxxxxxx xxxx xxx been rounded , xxxx the xxxxx answer has been xxxxxxx xx xxxxxxx dollar |
xxxxxx xxxxxxx xx xxxx of xxx xxxxxx I will xx happy xx help. Go xx my profile xx the xxxxx xxx xxx can xxxxxxx xx then. | |
Rating the xxxxxx xxxx xxxxxx xxxx x seconds. xxxxxx xxxxx xxxxxxxx please xxxxxxxxxxx xxxxx if xxx xxx xxxxxx any issue. | |
Answer xx the questions are xxxxx xx respective xxxxxxxxxxx |
xxxxxxxx x
xxxxxxxxxxxxxxx x | Basic present xxxxx calculations |
xxxxxxxxx the xxxxxxx value of the following cash xxxxxx rounding xx the nearest dollar: | |
a) | A xxxxxx xxxx xxxxxx of $12,000 xx xxxx xxxxxx xxxxxxxxxx at x xxx rate xx xxxxxxx |
b) | An annual xxxxxxx of xxxxxxx xxxx the xxxx xx years, discounted xx x 14% xxxx xx return. |
c) | x xxxxxx xxxxxxx xx xxxxxxx xx the xxx xx Year 1 xxxxxxxx xx x xxxxxx xxxxxxx of xxxxxxx xx the end xx Year 3. xxx xxxxxxx xxx a |
xxx xxxx xx xxxxxxx | |
d) | An xxxxxx receipt xx $8,000 for three years xxxxxxxx by x |
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ACC 206 week 5 assignment A+ work
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#1
xxxxxxxxxx Basic xxxxxxx value xxxxxxxxxxxx | ||
xxxxxxxxx xxx xxxxxxx xxxxx of the following cash flows, rounding to the nearest xxxxxxx | ||
xx x single xxxx xxxxxx of xxxxxxx xx xxxx xxxxxx discounted xx a 12% xxxx xx return. | ||
b. xx annual xxxxxxx xx xxxxxxx xxxx xxx xxxx 12 years, discounted xx x 14% xxxx xx return. | ||
c. x single receipt xx xxxxxxx at xxx xxx of Year x xxxxxxxx xx a single xxxxxxx xx $10,000 xx xxx end xx xxxx xx xxx company xxx a 10% xxxx of xxxxxxx | ||
d. xx xxxxxx xxxxxxx xx xxxxxx xxx xxxxx years followed xx x xxxxxx receipt of xxxxxxx xx xxx xxx xx xxxx xx The xxxxxxx has a xxx rate xx xxxxxxx | ||
Solution: | ||
xx x xxxxxx cash xxxxxx xx xxxxxxx in five years, xxxxxxxxxx xx x 12% xxxx xx return. | ||
Cash Flow | 12000 | |
xxxxxxxx Rate | 12% | |
xxxxxx | 5 | years |
xxxxxxx xxxxx | x 6,809.12 | |
b. xx xxxxxx xxxxxxx of $16,000 over xxx next xx xxxxxx xxxxxxxxxx at a 14% rate xx xxxxxxx | ||
Annual xxxx xxxx | x xxxxxx | |
xxxxxx | 12 | xxxxx |
xxxxxxxx Rate | xxx | |
Annuity |
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Acc 206 Week 5 Assignment 100% Correct
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xxxxxxx x Exercise 1
xxxxxxxxxxxxx1. xxxxx xxxxxxx xxxxx calculations | ||
xxxxxxxxx xxx present value xx the following cash xxxxxx xxxxxxxx xx xxx xxxxxxx xxxxxxx | ||
a. A single xxxx xxxxxx xx xxxxxxx xx five years, discounted xx a xxx rate of return. | ||
b. xx xxxxxx xxxxxxx xx xxxxxxx over xxx next xx years, discounted at x 14% rate of return. | ||
c. x single receipt xx xxxxxxx at xxx end xx xxxx x followed by x xxxxxx receipt of xxxxxxx xx xxx xxx of Year 3. The xxxxxxx xxx a xxx xxxx of xxxxxxx | ||
xx xx xxxxxx receipt of xxxxxx xxx xxxxx xxxxx xxxxxxxx by a single receipt xx $10,000 at the end xx xxxx 4. xxx company has a 16% xxxx xx xxxxxxx | ||
Solution: | ||
a. A single xxxx inflow of $12,000 xx xxxx xxxxxx discounted at a 12% rate xx xxxxxxx | ||
Cash Flow | xxxxx | |
xxxxxxxx Rate | xxx | |
Period | 5 | years |
Present Value | x 6,809.12 | |
b. An annual xxxxxxx xx xxxxxxx over the xxxx xx xxxxxx xxxxxxxxxx at x xxx rate xx return. | ||
xxxxxx cash Flow | * xxxxxx | |
xxxxxx | xx | years |
xxxxxxxx |
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ACC 206 Week 5 Exercise Assignment__100% CORRECTLY DONE
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xxxxx xxx Week x xxxxxxxx xxxxxxxxxxxxxxxx xxxxxxxxx DONE
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Ch. 8 xxx 1
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxChapter x Exercise 1 | ||
1. xxxxx present xxxxx xxxxxxxxxxxx | ||
1 | xxxxxx xxxxx | xxxxxxxxxx |
xxxxx | 5 | years |
Rate | xxx | |
xxxxxxx xxxxx | $6,809 | |
2 | xxxxxx Cash Flow | $16,000.00 |
xxxxxxxx | xx | xxxxx |
xxxx | xxx | |
xxxxxxx xxxxx | xxxxxxx | |
x | xxxx | 10% |
xxxx | Cash Flows | xxxxxxx xxxxx |
0 | 0.0 | xxx |
x | $15,000.00 | $13,636.36 |
2 | xxx | xxx |
x | xxxxxxxxxx | xxxxxxxxx |
Present value | xxxxxxx | |
4 | xxxx | xxx |
Year | Cash xxxxx | Present Value |
0 | xxx | xxx |
x | $8,000.00 | xxxxxxxxx |
2 | $8,000.00 | xxxxxxxxx |
3 | $8,000.00 | xxxxxxxxx |
4 | $10,000.00 | xxxxxxxxx |
Present value | xxxxxxx |
Ch. 8 Ex. x
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxChapter 8 xxxxxxxx 4: | ||||
4. Cash flow calculations xxx xxx xxxxxxx value | ||||
1.) | Year | xxxx | Description | Cash xxxx |
19X1 | xxxxx | xxx xxxxxx invested xx stocks | xxxxxxxxx | |
19X1 | xxxxxxxxxxx | xxxxxxxxx xxxx cash dividends | $1,300 | |
xxxx | Unspecified | xxxxxxxxx xxxx xxxx xxxxxxxxx | $1,300 | |
xxxx | Unspecified | xxxxxxxxx xxxx xxxx dividends | $1,550 | |
19X3 | xxxxxx | xxx xxxxxx xxxx his holdings | $13,000 | |
xxx | xxxx | 16% | ||
NPV | xxxx | |||
xxx | xxxx xxx Greene should xxxx xxxxxxxx xxx Heartland stocks, xxxxxxx the NPV xxxxx out xx be positive, xxxxx means xxxx this xxxxxxxxxx xxxx xxxxx to xx xxxxxxxxxxx |
Ch. x Ex. x
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxChapter 8 exercise xx | ||
xx Straightforward xxx xxxxxxx value xxx internal xxxx xx xxxxxx | ||
xxxxxxx Cost: | ||
xxxxxxxx xxxx | xxxxxxxxxxx | |
Site Preparation | xxxxxxxxxxx | |
xxxxxxxx of Use | xx | xxxxx |
xxxxxx Savings | $40,000.00 | |
xxx | Rate | xx |
xxxxx Costs | ($445,000.00) | xxxx xxxxxxxx in xxx xxxxxxxxx |
xxx xx xxxxx xxxxx | xxxxxxxxxxxxx | |
NPV of Total xxxxxxx | xxxxxxxxxxx | xxxxxxxx saved each xxxx xxx xx xxxxxx |
xxx xx Cash xxxxx | ($52,274.10) | |
Since the NPV xx xxxxxxxxx the landfill xxxxxx not xx xxxxxxxxx | ||
2.) | xxxx | xxxx |
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ACC 206 Week 5 Assignment ( Week Five Problems ) ~ ( Perfect Tutorial - Latest Syllabus - Scored 100% )
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x
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Basic xxxxxxx value xxxxxxxxxxxx | ||
1 | Future Value | $12,000.00 |
xxxxx | 5 | years |
Rate | xxx | |
xxxxxxx Value | xxxxxx | |
x | Annual Cash Flow | $16,000.00 |
xxxxxxxx | xx | xxxxx |
Rate | xxx | |
xxxxxxx xxxxx | $90,565 | |
x | Rate | 10% |
Year | Cash Flows | Present xxxxx |
x | 0.0 | xxx |
x | $15,000.00 | $13,636.36 |
x | 0.0 | xxx |
x | xxxxxxxxxx | $7,513.15 |
xxxxxxx value | xxxxxxx | |
x | xxxx | 16% |
Year | xxxx xxxxx | xxxxxxx xxxxx |
0 | 0.0 | xxx |
x | xxxxxxxxx | $6,896.55 |
x | xxxxxxxxx | $5,945.30 |
x | xxxxxxxxx | xxxxxxxxx |
x | $10,000.00 | xxxxxxxxx |
Present value | $23,490 |
2
xxxxxxxxxCash xxxx calculations and net present xxxxx | ||||
xxx | xxxx | Date | Description | xxxx xxxx |
xxxx | 2-Jan | xxx Greene xxxxxxxx xx stocks | xxxxxxxxx | |
20X1 | xxxxxxxxxxx | Heartland paid xxxx dividends | $1,300 | |
20X2 | xxxxxxxxxxx | Heartland xxxx xxxx dividends | xxxxxx | |
xxxx | Unspecified | xxxxxxxxx xxxx cash xxxxxxxxx | $1,550 | |
xxxx | 31-Dec | Mr. xxxxxx xxxx his holdings | xxxxxxx | |
2.) | xxxx | 16% | ||
NPV | $260 | |||
xxx | xxxx Mr. Greene should xxxx acquired xxx xxxxxxxxx xxxxxxx xxxxxxx xxx NPV turns xxx xx xx xxxxxxxxx which xxxxx that xxxx xxxxxxxxxx xxxx xxxxx xx xx profitable. |
x
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxStraightforward net xxxxxxx xxxxx xxx internal rate of xxxxxx | ||||
xxxxxxx xxxxx | ||||
Purchase xxxx | xxxxxxxxxxx | |||
xxxx xxxxxxxxxxx | xxxxxxxxxxx | |||
Duration of Use | 20 | years | ||
xxxxxx Savings | $40,000.00 | |||
xxx | Rate | 8% | ||
xxxxx xxxxx | xxxxxxxxxxxxx | xxxx xxxxxxxx in xxx beginning | ||
NPV of xxxxx xxxxx | xxxxxxxxxxxxx | |||
xxx xx xxxxx xxxxxxx | xxxxxxxxxxx | xxxxxxxx saved each year xxx 20 years. | ||
xxx of xxxx xxxxx | ($52,274.10) | |||
xxxxx the xxx is xxxxxxxxx the xxxxxxxx xxxxxx not be acquired. | ||||
2.) | Year | Cash Flows | IRR | 6.38% |
0 | ($445,000.00) | |||
1 | $40,000.00 | |||
x | $40,000.00 | |||
3 | xxxxxxxxxx | |||
x | xxxxxxxxxx | |||
5 | xxxxxxxxxx | |||
x | $40,000.00 | |||
7 | $40,000.00 | |||
x | xxxxxxxxxx | |||
x | xxxxxxxxxx | |||
10 | xxxxxxxxxx | |||
xx | xxxxxxxxxx | |||
xx | $40,000.00 | |||
13 | xxxxxxxxxx | |||
14 | $40,000.00 | |||
xx | $40,000.00 | |||
16 | xxxxxxxxxx | |||
17 | xxxxxxxxxx | |||
18 | xxxxxxxxxx | |||
xx | $40,000.00 | |||
xx | xxxxxxxxxx |
x
xxxxxxxxxxxxxxxxxx net-present-value and xxxxxxx computations | ||
xxxx xx xxxx | xxxxxxxx | |
xxxxxxx xxxx | 10 | xxxxxx seasons |
xxxxxxxx |
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ACC 206 All Assignments, Journals and DQs ( Latest Syllabus - Updated Nov, 2014 - Perfect Tutorial - Scored 100% )
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ACC 206 Week 3 Journal ( Hershey xxxxxxx ).docx
ershey Company [Year]
Hershey Company
Week 3 xxxxxxx
ACC 206
xxxxxx xx Hershey Chocolate
When xx xxxxx xx the making of xxxxxxxxxx xxx Hershey’s Company xx top of the list. It is the xxxxxxx xxxxxxxxx making xxxxxxx xx America xxx has x wide xxxxx of xxxxxxxx to its name. xx order to achieve the fine xxxxxxx of xxx products, there xxx x xxxxxx of key xxxxx xxxx the xxxxxxx follows.
The xxxxx xxxx involves xxxxxxx the raw xxxxxxxxxxxx xxx cocoa beans xxx the xxxx raw xxxxxxxxxxxx xxx beans, xxxxx xxxxx chocolate xxx special flavor, xxx got xxxx the xxxxxx of cacao xxxxx that can xx xxxxx xxx over xxx world. The beans xxx xxxxxxx xxxxxxxxx xxx one week in order to xxxxxx xxxxx shells, xxxxxx them xxx xxxxx rich cocoa xxxxxx to develop. After xxxxxxxxxxxxx the xxxxx are dried xxx transported xx xxx chocolate factory.
After the xxxxx xxxx been xxxxxxx xx xxx factory, they xxx first xxxxxxxxx before
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xxx 206 Week 4 xx 1 x xxxxxx in Standard Costs xxx Budgeting xxxxxx
ANSWER 1
x xxxxx that if x xxxxxxx xxxx to xxxx decisions solely upon xxxx performances, they could xxxxxxxxxx xxx xxxx trouble xxxxxxx no two problems will necessarily xxxxxx xx xxxxxx the same xxxx xxxx xxxxx xxxx xxxxxx for xxx xxxxxxx xx the past, such xx xxxxx temporary xxxxxxx xx fill xx xxx veterans, xxxxx cause them to lose money in the future if xxx company relies on xxx efficiency of xxx new, untrained employees over xxx xxxxx xx xxxxxxx who xxxxx how to xxxxxxx all equipment effectively. xx xxx suggested xxxxxxxx xxx xxxxxx pointed out xxxx global xxxxxxxxx xxxx xxx xxxxxxxx xxxxxxx could find xxxxx communication being xxxxxxxxxxxxxxx thus making xx xxxx harder for x xxxxxxxx xx be used across the board. xxxxxxx xxxxx xxxxx be xxxxxxxx xxxxxxxx xx xxxxxxxxxxxxxxxx xxxxxxx xxxxxxxxx within x xxxxxxxxxxxxxx xxxxxx the idea of having a standard cost xxxxxxx xxxx more important. The standard xxxxxxx
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100% quality work Detailed calculations A++++ Tutorial Student already got A+ the tutorial for guide
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Sheet4
xxxxxxxxxxPlease xxxxxxxx xxx file |
xxxxxx xxxx x Problems |
Sheet1
xxxxxxxxxxxxxxhapter x Exercise xx | ||
1. Basic present value calculations | ||
xxxxxxxxx the present xxxxx of xxx xxxxxxxxx xxxx flows, xxxxxxxx to the xxxxxxx xxxxxxx | ||
xx A single cash inflow of xxxxxxx in xxxx xxxxxx discounted at a xxx rate xx return. | xxxxxxx | |
b. xx xxxxxx receipt xx xxxxxxx xxxx xxx xxxx xx xxxxxx xxxxxxxxxx xx x xxx rate of xxxxxxx | 5.6602921255 | xxxxxxxxxxxxxxxx |
xx A single xxxxxxx of xxxxxxx xx the end of Year 1 followed xx a xxxxxx receipt xx xxxxxxx xx xxx xxx xx xxxx xx The company xxx x 10% rate xx return. | ||
xxxxxxxxxxxxxxxx | ||
7513.1480090158 | ||
xxxxxxxxxxxxxxxx | ||
xx xx xxxxxx xxxxxxx xx xxxxxx xxx xxxxx years followed xx x xxxxxx receipt xx xxxxxxx xx xxx xxx xx xxxx xx xxx company has a xxx rate xx xxxxxxx | ||
xxxxxxxxxxxx | 17967.1163229325 | |
5522.9109788047 | ||
23490.0273017372 | ||
xxxxxxx x xxxxxxxx xx | ||
4. Cash flow xxxxxxxxxxxx xxx xxx xxxxxxx xxxxx | ||
xx xxxxxxx xx xxxxx Bruce Greene xxxxxxxx $10,000 in the stock xxxxxx xxx xxxxxxxxx xxx xxxxxx of Heartland xxxxxxxxxxxx xxxx xxxxxxxxx xxxx cash dividends xx $2.60 xxx xxxxx xx xxxx and xxxxx the xxxxxxxx xxx xxxxxx to $3.10 xxx share xx 19X3. xx December xxx xxxxx xxxxxx sold xxx xxxxxxxx and xxxxxxxxx proceeds of xxxxxxxx Greene uses xxx net-present- xxxxx xxxxxx and xxxxxxx x 16% xxxxxx xx investments. | ||
a. xxxxxxx x xxxxxxxxxxxxx xxxx xx xxx investment's xxxx xxxxxx Note: Greene xx entitled xx xxx xxxx |
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acc 206 week 5 assignment_Solution
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Ch8_Ex1
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx of xxxxxxx Value | |||||
xx A single cash inflow xx $12,000 in five xxxxxx xxxxxxxxxx at x 12% rate of return. | |||||
xxxxxx | Rate | xxxx | PV xxxxxx | Present xxxxx | |
xxxxxxx | 12% | x | xxxxxxxxxxxxxxxxxxx | xxxxxxxxx | |
xx xx annual receipt of $16,000 xxxx the xxxx 12 years, discounted xx a xxx rate of xxxxxxx | |||||
Inflow | Rate | Term | xx Factor | xxxxxxx xxxxx | |
xxxxxxx | 14% | 12 | xxxx | $90,560.00 | |
c. x xxxxxx receipt of xxxxxxx at the xxx of Year 1 followed by x xxxxxx receipt xx xxxxxxx at xxx end xx Year xx The xxxxxxx has x 10% rate xx xxxxxxx | |||||
xxxxxx | xxxx | xxxx | xx xxxxxx | xxxxxxx xxxxx | |
xxxxx Year | $15,000 | xxx | xx | 0.90900000000000003 | xxxxxxxxxx |
Third year | $10,000 | xxx | xx | xxxxx | $7,510.00 |
xxxxx | xxxxxxxxxx | ||||
xx An xxxxxx xxxxxxx xx xxxxxx xxx xxxxx years xxxxxxxx xx a xxxxxx receipt xx $10,000 at xxx end xx Year xx xxx xxxxxxx xxx a xxx xxxx of xxxxxxx | |||||
Inflow | xxxx | xxxx | xx Factor | xxxxxxx Value | |
First three xxxxx | xxxxxx | xxx | xxx | 2.246 | xxxxxxxxxx |
Fourth year | $10,000 | xxx | 4 | 0.552 | $5,520.00 |
Total | xxxxxxxxxx | ||||
Ch8_Ex4
xxxxxxxxxxxxa. xxxxxxx x xxxxxxxxxxxxx xxxx of the xxxxxxxxxxxx cash xxxxxx xxxxx xxxxxx xx entitled to the xxxx xxxxxxxxx | |||
xxxxx xxxxxx | |||
Date | Cash xxxx | ||
xxxx 2, 20x1 | -10000 | xxxxxxxxxx | |
20x1 | 1300 | xxxxxxxxx | |
20x2 | xxxx | Dividends | |
20x3 | 1550 | xxxxxxxxx | |
20x3 | xxxxx | Proceeds on sale xx xxxxxxxxxxx | |
xx xxxxxxx the investment's xxx xxxxxxx xxxxxx xxxxxxxx calculations to xxx nearest xxxxxxx | |||
Bruce xxxxxx | |||
Date | Cash Flow | xxxxxxx xxxxx factor | Present xxxxx |
xxxx 2, |
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ACC 206 Week 5 Assignment/Exercise: Chapter Eight Problems (100% accurate answers with excel sheet)
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Chapter xxxxx xxxxxxxx
Chapter 8 xxxxxxxx xx
xx Basic present value calculations
xxxxxxxxx the present xxxxx xx xxx following xxxx flows, xxxxxxxx xx xxx nearest xxxxxxx
x xxxxxx cash xxxxxx xx xxxxxxx xx xxxx xxxxxx discounted at x 12% xxxx of return.
xx xxxxxx xxxxxxx xx $16,000 xxxx xxx next xx xxxxxx discounted at x 14% xxxx of return.
A single receipt of xxxxxxx xx the end of xxxx 1 xxxxxxxx xx x single receipt xx xxxxxxx xx the xxx of xxxx 3. xxx company xxx x xxx rate of return.
An annual xxxxxxx of xxxxxx xxx three years xxxxxxxx xx x single receipt xx xxxxxxx at xxx xxx of xxxx xx The xxxxxxx xxx a xxx rate of return.
xxxxxxx
xxxxx
Cash xxxx (CF) = xxxxxxx
xxxxxxxx xxxx xxx x 0.12
Time xxx x 5
xxxxxxx xxxxx = = = xxxxxx
Here,
Cash xxxx xxxx x xxxxxxx
Discount xxxx xxx x xxxx
xxxxxx of xxxxxx (n) = xx
xxxxxxx xxxxx = CF x
= xxxxxxx X
xxx xxxxxxx
xxxxxxx value x +
= xxxxxxx
Present value x x x +
x $23,490
xxxxxxx x xxxxxxxx xx
xx xxxx xxxx
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xx xx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx | $12,000 | xxx | ||||||||||
xx | $6,809 | |||||||||||
xxxx | x | x | x | 4 | x | x | 7 | 8 | 9 | xx | 11 | 12 |
xx | xxxxxxx | xxxxxxx | $16,000 | $16,000 | xxxxxxx | xxxxxxx | xxxxxxx | $16,000 | $16,000 | $16,000 | xxxxxxx | $16,000 |
Rate | xxx | |||||||||||
PV | $90,565 | |||||||||||
Year | 1 | 2 | 3 | |||||||||
xx | $15,000 | $0 | xxxxxxx | |||||||||
Rate | xxx | |||||||||||
PV | $21,150 | |||||||||||
xxxx | 1 | x | x | x | ||||||||
xx | xxxxxx | xxxxxx | xxxxxx | xxxxxxx | ||||||||
xxxx | 16% | |||||||||||
xx | $23,490 |
EX -4
xxxxxxxxxxxxxxxxxxxxxxxxxxxx | $10,000 | ||
No. of xxxxxx | 500 | ||
Rate | 16% | ||
x | 2 | 3 | |
xxxx | 20X2 | xxxx | |
Dividend per xxxxx | $2.60 | $2.60 | $3.10 |
Total xxxxxxxx | $1,300 | $1,300 | xxxxxx |
xx | xxxxxxx | ||
Total CF | $1,300 | $1,300 | xxxxxxx |
xx @ 16% | $1,121 | $966 | xxxxxx |
Total PV | $11,408 | ||
xxx | $1,408 |
xx -5
xxxxxxxxxxxxxxxxxxx$40,000 | ||
xxxxxxx | ||
xxxxxxx | ||
Total xxxxxxxx xxxx | xxxxxxxx | $40,000 |
Site preparation | xxxxxxxx | xxxxxxx |
Total Cost | xxxxxxxx | $40,000 |
$40,000 | ||
Annual Savings | xxxxxxx | xxxxxxx |
xxxxxxxx | xx | $40,000 |
xxxx | 8% | $40,000 |
xx xx xxxxxxx | xxxxxxxx | xxxxxxx |
$40,000 | ||
xxx | xxxxxxxxx | xxxxxxx |
xxxxxxx | ||
$40,000 | ||
xxxxxxx | ||
xxxxxxx | ||
xxxxxxx | ||
xxxxxxx | ||
xxxxxxx |
Pro-1
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxCost of boat | $500,000 | |||||||||
xxxxxxx xxxx | 10 | |||||||||
Disposal xxxxx xx the end of 10 seasons | xxxxxxxx | |||||||||
Capacity per trip | 300 | |||||||||
xxxxx xxxxxxxxx xxxxx xxx xxxxxx xxxxxxxxxx straight-line xxxxxxxxxxxxx | xxxxxxxx | |||||||||
Variable operating costs xxx trip | xxxxxx | |||||||||
xxxxxx xxxxx xxxx passenger) | $5 | |||||||||
Passengers will be carried xxxx xxxxxx | 120,000 | |||||||||
xxx of trip each xxxxxx | 400 | |||||||||
Depreciation per xxxxxx | xxxxxxx | |||||||||
xxxx | xxx | |||||||||
Year | 1 | 2 | x | 4 | x | x | x | x | 9 | xx |
Revenue | xxxxxxxx | $600,000 | xxxxxxxx | xxxxxxxx | $600,000 | $600,000 | xxxxxxxx | $600,000 | $600,000 | $600,000 |
xxxxx operating xxxxx | xxxxxxxx | $160,000 | $160,000 | xxxxxxxx | xxxxxxxx | $160,000 | xxxxxxxx | $160,000 | xxxxxxxx | xxxxxxxx |
Variable operating xxxxx | $400,000 | $400,000 | $400,000 | xxxxxxxx | $400,000 | xxxxxxxx | $400,000 | $400,000 | $400,000 | $400,000 |
xxx xxxxxx | xxxxxxx | $40,000 | xxxxxxx | xxxxxxx | $40,000 | $40,000 | $40,000 | xxxxxxx | xxxxxxx | $40,000 |
Depreciation | xxxxxxx | $40,000 | xxxxxxx | xxxxxxx | $40,000 | xxxxxxx | xxxxxxx | $40,000 | $40,000 | $40,000 |
Cash xxxx | xxxxxxx | $80,000 | $80,000 | $80,000 | xxxxxxx | xxxxxxx | xxxxxxx | $80,000 | $80,000 | xxxxxxx |
xxxxxxxx value at the end xx 10 seasons | xxxxxxxx | |||||||||
xxxxx xx | $80,000 | $80,000 | $80,000 | xxxxxxx | xxxxxxx | $80,000 | xxxxxxx | $80,000 | $80,000 | xxxxxxxx |
xx x 14% | xxxxxxx | $61,557 | $53,998 | $47,366 | $41,549 | $36,447 | $31,971 | xxxxxxx | xxxxxxx | $48,554 |
xxxxx xx | xxxxxxxx | |||||||||
NPV | ($55,736) |
Pro -4
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxParticulars/Year | 0 | x | 2 | 3 | x | x | 6 |
Cost of New Equipment | $103,000 | ||||||
Old Equipment xxxxxxx Price | xxxxxxx | ||||||
Fund Need to xxxxxxxx | xxxxxxx | ||||||
xxxxxxxxx xxxx (Old) | xxxxxxx | xxxxxxx | xxxxxxx | $27,200 | xxxxxxx | $27,200 | |
Operating Cost (New) | xxxxxxx | xxxxxxx | $21,000 | xxxxxxx | xxxxxxx | $21,000 | |
Cost Savings | xxxxxx | xxxxxx | xxxxxx | xxxxxx | xxxxxx | xxxxxx | |
xxxxxxx From xxxxxx | xxxxxx | xxxxxx | |||||
Salvage xxxxx (Old) | $5,000 | ||||||
Salvage xxxxx xxxxx | xxxxxxx | ||||||
Incremental Salvage Value | $8,000 | ||||||
Net xxxx Flow | xxxxxxx | $10,550 | $10,550 | xxxxxx | $6,200 | xxxxxx | $14,200 |
xx x xxx | xxxxxx | $8,410 | $4,413 | $3,940 | $3,518 | $7,194 | |
Total PV | $36,895 | ||||||
Required Rate of Return | 12% | ||||||
NPV | xxxxxxxx |
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ACC 206 Week 5 Assignment for you
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ACC xxx Week x Assignment for you
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Assignment xxxx x
Principles of xxxxxxxxxx 206
xxxxxxx xxxxx Problems
xxxxxx complete xxx following 5 xxxxxxxxx xxxxx in either xxxxx or a xxxx xxxxxxxx xxxx must xx single xxxxxxxxxx You must xxxx xxxx work where xxxxxxxxxxx xxxxxxxx the calculations within xxxxx xxxxx xx xxxxxxxxxxxx Save xxx document, xxx submit it xx xxx xxxxxxxxxxx week using xxx Assignment Submission xxxxxxx
Chapter 8 Exercise xxx
1. Basic xxxxxxx xxxxx xxxxxxxxxxxx
Calculate the present value xx xxx xxxxxxxxx cash xxxxxx rounding xx the xxxxxxx dollar:
x xxxxxx cash xxxxxx of xxxxxxx in five xxxxxx discounted at x 12% xxxx xx return.
xxxxxxxxxx
A | xxxxxx xxxxx | x 12,000.00 | ||
xxxxx | 5 | years | ||
xxxx | xxx | |||
Present Value | $ 6,809 | |||
xx annual receipt of $16,000 xxxx xxx xxxx 12 xxxxxx discounted xx x xxx rate xx return.
xxxxxxxxxxx
B | xxxxxx Cash Flow | x xxxxxxxxx | ||
Duration | 12 | years | ||
xxxx | xxx | |||
xxxxxxx xxxxx | $ 90,565 | |||
x xxxxxx xxxxxxx xx xxxxxxx xx xxx xxx of xxxx 1 followed xx x single xxxxxxx xx xxxxxxx at the xxx of Year xx The xxxxxxx xxx x xxx rate of return.
xxxxxxxxxxxxxxxxxxxx | Rate | xxx | ||
xxxx | Cash Flows | xxxxxxx xxxxx | ||
x | x - | $ - | ||
x | x xxxxxxxxx | $ xxxxxxxxx | ||
x | $ x | x - | ||
3 | $ xxxxxxxxx | x 7,513.15 | ||
xxxx xxxxxx receipt xx $8,000 xxx xxxxx xxxxx xxxxxxxx by x single xxxxxxx xx xxxxxxx at the xxx of xxxx xx The company xxx a 16% xxxx xx xxxxxxx
xxxxxxxxxxxxD. | xxxx | 16% | |
xxxx | Cash Flows | xxxxxxx xxxxx | |
x | x x | x x | |
1 | x 8,000.00 | x xxxxxxxx | |
2 | x 8,000.00 | $ 5,945.30 | |
3 | $ 8,000.00 | x |
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