Question

CALCULATOR PRINTER VERSION BACK NEXT Maybe I should have stuck with teaching high school art. No matter what I try, I cant

LINK TO TEXT (b) Your answer is partially correct. Try again. Calculate the net present value of each option. Assume a 12% di



option 2 with and without the decimal places is incorrect.

0 0
Add a comment Improve this question Transcribed image text
Answer #1

$Net present value is the discounted value of cash flows.

here the cash flow from year 1-4 similar so we will use present value annuity factor.

for the forth year we will use present value factor.

option 2

Year Rent cash flow cash flow in form of discount Sale value Total cash inflow Discount factor at 12% Present value
1-4 years $2,400,000

$474,000

[4,740,000*10%]

[2,370,000*2$]

$2,874,000 3.0373

$8,729,200

[2,874,000*3.0373]

4 $2,000,000 $2,000,000 0.6355

$1,271,000

[2,000,000*0.6355]

Net present value $10,000,200
Add a comment
Know the answer?
Add Answer to:
option 2 with and without the decimal places is incorrect. CALCULATOR PRINTER VERSION BACK NEXT "Maybe...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
  • Assume a 12% Discount Rate; Period 1 = .8929, Period 2 = .7972, Period 3 =...

    Assume a 12% Discount Rate; Period 1 = .8929, Period 2 = .7972, Period 3 = .7118, Period 4 = .6355, Period 5 = .5674 etc. Case Question 9-31 "Maybe I should have stuck with teaching high school art. No matter what I try, I can't seem to turn that Roanoke plant around." That's how the meeting between Warren Wingo, CEO of clothing manufacturer Wingo Designs, and Angie Tillery, vice president of corporate lending at First National Bank, ended. Wingo...

  • nent CALCULATOR GE MY INSTRUCTOR FULL SCREEN PRINTER VERSION BACK NEXT Problem 21A-3 a-d (Part Level...

    nent CALCULATOR GE MY INSTRUCTOR FULL SCREEN PRINTER VERSION BACK NEXT Problem 21A-3 a-d (Part Level Submission) Culver Steel Company, as lessee, signed a lease agreement for equipment for 5 years, beginning December 31, 2017. Annual rental payments of $55,000 are to be made at the beginning of each lease year (December 31). The interest rate used by the lessor in setting the payment schedule is 6%; Culver's incremental borrowing rate is 8%. Culver is unaware of the rate being...

  • The Ralling Company is a national portable building manufacturer. Its Benton plant will become idle on...

    The Ralling Company is a national portable building manufacturer. Its Benton plant will become idle on December 31, 2017. Mary Carter, the corporate controller, has been asked to look at three options regarding the plant: (Click the icon to view the options.) Present Value of $1 table Present Value of Annuity of $1 table Future Value of $1 table Future Value of Annuity of $1 table Read the requirements, Ralling Company treats all cash flows as if they occur at...

  • CALCULATOR STANDARD VIEW PRINTER VERSION « BACK NEXT Problem 3-02A a-d Cullumber's Hotel opened for business...

    CALCULATOR STANDARD VIEW PRINTER VERSION « BACK NEXT Problem 3-02A a-d Cullumber's Hotel opened for business on May 1, 2020. Its trial balance before adjustment on May 31 is as follows. CULLUMBER'S HOTEL Trial Balance May 31, 2020 Account Number Credit 101 126 Debit $3,400 2,050 1,800 13,000 58,800 15,600 Cash Supplies Prepaid Insurance Land Buildings Equipment Accounts Payable Uneamed Rent Revenue Mortgage Payable Owner's Capital Rent Revenue Advertising Expense Salaries and Wages Expense Utilities Expense $ 4,900 3,000 40,000...

  • CALCULATOR STANDARD VIEW PRINTER VERSION « BACK NEXT Problem 3-02A a-d Cullumber's Hotel opened for business...

    CALCULATOR STANDARD VIEW PRINTER VERSION « BACK NEXT Problem 3-02A a-d Cullumber's Hotel opened for business on May 1, 2020. Its trial balance before adjustment on May 31 is as follows. CULLUMBER'S HOTEL Trial Balance May 31, 2020 Account Number Credit 101 126 Debit $3,400 2,050 1,800 13,000 58,800 15,600 Cash Supplies Prepaid Insurance Land Buildings Equipment Accounts Payable Uneamed Rent Revenue Mortgage Payable Owner's Capital Rent Revenue Advertising Expense Salaries and Wages Expense Utilities Expense $ 4,900 3,000 40,000...

  • 5/9284/assignments/93631 PLUS Jiambalvo, Managerial Accounting, 6e #e Sestem Annesncements PRINTER VERSION CALCULATOR BACK NEXT Problem 2-3...

    5/9284/assignments/93631 PLUS Jiambalvo, Managerial Accounting, 6e #e Sestem Annesncements PRINTER VERSION CALCULATOR BACK NEXT Problem 2-3 Ridgewood, Co. manufactures cutting dies for the shoe industry. Each set of dies is custom designed to a customer's templates. During the first week of May, six orders were recelved from customers. They were assigned job numbers 1005 to 1010. The following transactions occurred during the first week of May: Ridgewood purchased steel on account from Eastern City Steel costing (indirect materials) from Canarie...

  • when k and g are expressed as decimal fractions (e.g., .12 and .04) What should Rainbow do? 2. Suppose you own a concession stand that sells hot dogs, peanuts, do not expect it to be renew...

    when k and g are expressed as decimal fractions (e.g., .12 and .04) What should Rainbow do? 2. Suppose you own a concession stand that sells hot dogs, peanuts, do not expect it to be renewed. Long lines limit sales and profits. You have popcom, and aer at a ball park. You have 3 years left on the contract with the ball park, and developed four different proposals to reduce the lines and increase profts: The first proposal is to...

  • Case 8-30 Evaluating a Company's Budget Procedures Presentation 2 Tom Emory and Jim Morris strolled back...

    Case 8-30 Evaluating a Company's Budget Procedures Presentation 2 Tom Emory and Jim Morris strolled back to their plant from the administrative offices of Ferguson & Son Manufacturing Company. Tom is manager of the machine shop in the company's factory; Jim is manager of the equipment maintenance department. The men had just attended the monthly performance evaluation meeting for plan department heads. These meetings had held on the third Tuesday of each month since Robert Ferguson, Jr., the president's son,...

  • Please use the above info to answer the next problems B C D 1 Due to...

    Please use the above info to answer the next problems B C D 1 Due to its popularity, the Black and White Handbag (BW14293) is normally a stock item. However, the 2 handbag is currently out of stock. Rather than producing only enough units to fill Katie's order, 3 management would like to produce a job (Job 114) that is large enough to fill Katie's order and replenish 4 stock. The fabric used for this job can be stacked four...

  • Discuss in detail any SEVEN (7) advantages that big corporate companies

    QUESTION 1 (25 Marks)1.1 Discuss in detail any SEVEN (7) advantages that big corporate companies aim to take advantage of when considering an acquisition. (14 marks)1.2 Explain in detail, what is a hostile take-over. (4 marks) 1.3 Explain each of the following types of mergers in detail:1.3.1 Horizontal Merger (3 marks)1.3.2 Vertical Merger (2 marks)1.3.3 Conglomerate Merger (2 marks)QUESTION 2 (25 Marks)The directors of Dell Limited have appointed you as their financial consultant. They are considering new investment projects and...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT