For each of the following items sold on credit, estimate the net present value of grantingcredit. Item
Question:
For each of the following items sold on credit, estimate the net present value of grantingcredit.
Net Present ValueWhat is NPV? The net present value is an important tool for capital budgeting decision to assess that an investment in a project is worthwhile or not? The net present value of a project is calculated before taking up the investment decision at...
Transcribed Image Text:
Item Refridgerato 1,200 300 800 Sale Price Investment Collection Required Probibility Period 3 month 12 month 6 month in Sale 1,000 150 550 Return 12% 14% 13% of Pavment 0.8 0.95 0.9 ewe Stero
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 58% (17 reviews)
Computation of Net Present value of Granting credit Formula for Net Present value of Granting ...View the full answer
Answered By
Brown Arianne
Detail-oriented professional tutor with a solid 10 years of experience instilling confidence in high school and college students. Dedicated to empowering all students with constructive feedback and practical test-taking strategies. Effective educator and team player whether working in a school, university, or private provider setting. Active listener committed to helping students overcome academic challenges to reach personal goals.
4.60+
2+ Reviews
10+ Question Solved
Related Book For
Intermediate Accounting principles and analysis
ISBN: 978-0471737933
2nd Edition
Authors: Terry d. Warfield, jerry j. weygandt, Donald e. kieso
Question Posted:
Students also viewed these Finance questions
-
For each of the following items in Procter and Gamble s financial statements, indicate (1) whether it is reported in the income statement (I/ S) or balance sheet (B/ S) and (2) whether it is an asset...
-
For each of the following items in Time Warner Cable, Inc. s financial statements, indicate (1) whether it is reported in the income statement (I/ S) or balance sheet (B/ S) and (2) whether it is an...
-
For each of the following items considered independently, indicate whether the circumstances call for an addition modification (A), a subtraction modification (S), or no modification (N) in computing...
-
An assistant treasurer is currently reevaluating their firm's banking relationship. The firm's current lender charges an effective borrowing cost of 4.25 percent. A competing lender provides the...
-
At the date of acquisition, consolidation eliminating entry R credits the noncontrolling interest in Starfruit Company in the amount of a. $1,500,000 b. $5,000,000 c. $6,300,000 d. $8,500,000 Use the...
-
Harrison, Inc., has the following book value balance sheet: Assets Current assets $ 130,000,000 $ 220,000,000 Balance Sheet Liabilities and equity Total debt Equity Common stock Capital surplus...
-
DuPONT ANALYSIS Doublewide Dealers has an ROA of 10%, a 2% profit margin, and an ROE of 15%. What is its total assets turnover? What is its equity multiplier? AppendixLO1
-
Three recent college graduates have formed a partnership and have opened an advertising firm. Their first project consists of activities listed in the following table. a. Draw the precedence diagram....
-
A new company ended the first year of operations with a net loss. Management is hoping to at least break-even this year. Fixed costs are $135,000 and variable costs are 75% of their products unit...
-
(50) buys a 300,000 whole life insurance with 6,629.76 premiums payable for 15 years. Insurance is payable at the end of year of death and premiums are payable at the beginning of the year. The plan...
-
Young Trucking, inc. has a current stock price of $46. For the past year, the company had net income of $6,250,000, total equity of $21,580,000, sales of $39,000,000, and 4.1 million shares of stock...
-
Place the correct letter in the shaded area on the left hand column, "matching" the term to the proper definition in the right handcolumn. 1 Diidends 12 Treasury Stock 13 Intermal Control a Left side...
-
Taras Textiles currently has credit sales of $30 million per month, an average collection period of 60 days, and bad debts equal to 3% of sales. Assume that the price of Taras products is $60 per...
-
Tristan Walker of Walker & Company says, "We are only going to design, develop, and test products and services uniquely tailored to our community's needs. I get it. I'm a part of the community we are...
-
Ace Cosmetics Corporation purchased land adjacent to its plant to improve access for trucks making deliveries. Expenditures incurred in purchasing the land were as follows: purchase price, $55,000;...
-
7. At this point you now know information about both the horizontal and the vertical components of the projectile's velocity. In the space below, draw a diagram of the vector components of Vx and...
-
Complete autonomy in how you demonstrate the following criteria. In this module, we talked more about leadership. We discussed the differences between leadership theory which is a well-substantiated...
-
Accustart Ltd. acquired 38% of the common shares of Lecce Ltd. on January 1, 2024, by paying $5.76 million for 144,000 shares. Lecce declared a cash dividend of $0.60 per share in each quarter that...
-
Recording the Sale of Common and Preferred Shares} At the end of its first year of operations, Mulligan Corporation has outstanding shares of 96,000 common shares and 1,900 preferred shares. The...
-
Imagine that your best friend knows you are taking a psychology course and wonders what psychology is all about. How would you define psychology for your friend? Write an essay on the discipline of...
-
Since 2007 credit rating agencies have come under a lot of criticism for their role in the subprime mortgage crisis. To what extent do you think credit rating agencies were responsible for the...
-
Differentiate between a fixed-rate mortgage and a variable-rate mortgage.
-
What disclosures are required relative to long-term debt and sinking fund requirements?
-
What is off-balance-sheet financing? Why might a company be interested in using off-balance-sheet financing?
-
In the Marriott example, one discussion point considered when a firm might use a single hurtle rather than different divisional or business unit rates. When a single rate is used and the divisions...
-
Which of the following are elements of a bootstrappable business model? Indicate ALL that apply. Large up-front capital investment Recurring revenue stream Long sales cycles Word of mouth advertising
-
Hooligan Adventure Supply produces and sells various outdoor equipment. The Molding and Assembly production departments are supported by the Personnel and Maintenance departments. Personnel costs are...
Study smarter with the SolutionInn App