ZuoTi.Pro
Question

1. You’re working as an accountant at a CPA firm currently. You’re trying to figure out...

1. You’re working as an accountant at a CPA firm currently. You’re trying to figure out if you should start your own practice. Your current income is $75,000 a year. The cost of rent for an office space is $18,000 a year. Other overhead costs are about $15,000 a year. What is the opportunity cost of going to private practice?

a) $33,000

b) $75,000

c) $93,000

d) $90,000

2. When evaluating two mutually exclusive investments (you only have enough money for one, but not both), the best method to use is:

a) Payback Period

b) IRR

c) NPV

d) NPV and IRR are equally good.

business   finance   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

Opportunity cost = Current Income

= $75000

i.e. b

2. d) NPV and IRR are equally good.

As both will result in same decision

0 0
Add a comment
Know the answer?
Add Answer to:
1. You’re working as an accountant at a CPA firm currently. You’re trying to figure out...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

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

  • This is an old test we took and I would just like some clarification on what...

    This is an old test we took and I would just like some clarification on what the answers were and why. thanks! (Also to eliminate comfusion its a study abroad course so questions are asking in euros) 10. Sensitivity analysis and Scenario analysis are methods that: a) Deal with risk that comes from the project cash flows. b) Deal with risk that comes from the project opportunity cost of capital. c) Plot the NPV as a function of the discount...

  • 1. undersatnd how to use EXCEL Spreadsheet (a) Develop proforma Income Statement Using Excel Spreadsheet (b)...

    1. undersatnd how to use EXCEL Spreadsheet (a) Develop proforma Income Statement Using Excel Spreadsheet (b) Compute Net Project Cashflows, NPV, and IRR (c) Develop problem-solving and critical thinking skills and make long-term investment decisions 1) Life Period of the Equipment = 4 years 2) New equipment cost $(200,000) 3) Equipment ship & install cost $(35,000) 4) Related start up cost $(5,000) 5) Inventory increase $25,000 6) Accounts Payable increase $5,000 7) Equip. salvage value before tax $15,000 8) Sales...

  • Abstract This case deals with the capital budgeting techniques of Net Present Value (i.e. NPV) and...

    Abstract This case deals with the capital budgeting techniques of Net Present Value (i.e. NPV) and Internal Rate of Return (i.e. IRR). In this case, students will compare two mutually exclusive projects using NPV and IRR, and choose the best project. They will learn about NPV and IRR methods and their advantages and disadvantages. Students will also learn the weakness of the IRR method when comparing two or more projects. Finally, they will evaluate the two projects assuming that the...

  • Lindsey was recently hired by Swift Ltd. as a junior budget analyst. She is working for...

    Lindsey was recently hired by Swift Ltd. as a junior budget analyst. She is working for the Venture Capital Division and has been given for capital budgeting projects to evaluate. She must give her analysis and recommendation to the capital budgeting committee. Lindsey has a B.S. in accounting from CWU (2007) and passed the CPA exam (2008). She has been in public accounting for 2 years. During that time she earned an MBA from Seattle U. She would like to...

  • 1.  Tim Smith is shopping for a used luxury car. He has found one priced at...

    1.  Tim Smith is shopping for a used luxury car. He has found one priced at $36,000. The dealer has told Tim that if he can come up with a down payment of $5,500​, the dealer will finance the balance of the price at a 8​% annual rate over 2 years (24 months).  ​(Hint: Use four decimal places for the monthly interest rate in all your​ calculations.) a.  Assuming that Tim accepts the​ dealer's offer, what will his monthly​ (end-of-month)...

  • Ronald was recently hired by Highland Equipment Inc. as a junior budget analyst. He is working for the Venture Capital D...

    Ronald was recently hired by Highland Equipment Inc. as a junior budget analyst. He is working for the Venture Capital Division and has been given for capital budgeting projects to evaluate. He must give his analysis and recommendation to the capital budgeting committee. Ronald has a B.S. in accounting from (2011) and passed the CPA exam (2017). He has been in public accounting for several years. During that time he earned an MBA from Seattle U. He would like to...

  • 1. Alaa works for a pharmaceutical company that has developed a new drug. The patent on...

    1. Alaa works for a pharmaceutical company that has developed a new drug. The patent on the drug will last 17 years. She expects that the drug’s profits will be $2 million in its first year and that this amount will grow at a rate of 5% per year for the next 17 years. Once the patent expires, other pharmaceutical companies will be able to produce the same drug and competition will likely drive profits to zero. What is the...

  • Ronald was recently hired by Highland Equipment Inc. as a junior budget analyst. He is working...

    Ronald was recently hired by Highland Equipment Inc. as a junior budget analyst. He is working for the Venture Capital Division and has been given for capital budgeting projects to evaluate. He must give his analysis and recommendation to the capital budgeting committee. Ronald has a B.S. in accounting from and passed the CPA exam (2007). He has been in public accounting for several years. During that time he earned an MBA from Seattle U. He would like to be...

  • Emma was recently hired by Greenpower Ltd. as a junior budget analyst. She is working for the Venture Capital Div...

    Emma was recently hired by Greenpower Ltd. as a junior budget analyst. She is working for the Venture Capital Division and has been given for capital budgeting projects to evaluate. She must give her analysis and recommendation to the capital budgeting committee Emma has a B.S. in accounting from CWU (2015) and passed the CPA exam (2017). She has been in public accounting for several years. During that time she earned an MBA from Seattle U. She would like to...

  • 1. What is the firm’s cost of debt? (Pre tax) Cost of debt, Kd = YTM of the bond = 2 x RATE (Period, PMT, PV, FV) = 2 x...

    1. What is the firm’s cost of debt? (Pre tax) Cost of debt, Kd = YTM of the bond = 2 x RATE (Period, PMT, PV, FV) = 2 x RATE (2 x 5, 12%/2 x 1000, -1080, 1000) = 2 x RATE (10, 60, -1080, 1000) = 9.93% 2. What is the cost of preferred stock for Whatcom Co.? Ks = Annual dividend / Current price = 11% x 100 / 104 = 10.58% 3. Cost of common equity...

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