Answer:
If CF0 is positive and all the other CFs are negative, then you can still solve for I
TRUE. This will be the formula for ordinary annuity.
This is the case of a loan on which the company receives a positive cash flow at the beginning and then makes subsequent cash payments, thus negatives cash flows.
Explanation:
If you have a series of cash flows, and CF0 is negative but each of the following CFs is positive, you can solve for I, but only if the sum of the undiscounted cash flows exceeds the cost
FALSE If the sum is below the cost then it will give a negative rate
To solve for I, one must identify the value of I that causes the PV of the positive CFs to equal the absolute value of the FV of the negative CFs. FALSE you can't compare a present value with a future as they are on different dates.
It is impossible to find the value of I without a computer or financial calculator.
FALSE There are method of approximation the difference is that the computer does this faster than humans.
If you solve for I and get a negative number, then you must have made a mistake
FALSE if the project return are lower than cost the rate will be negative.
Answer:
c. credit to Manufacturing Overhead of $92,000
Explanation:
Applied Manufacturing overhead was $92,000
So, The journal entry to record this will be,
Dr. Cr.
Work in Process of $92,000
Manufacturing Overhead $92,000
So, manufacturing overhead account is credited with the value of $92,000.
Answer:
281,281.28
Explanation:
expected cost 300,000 + 10,000 = 310,000
with an inerest rate of 10%
discount value equals to 281,281.28
Answer:
D. A position where an option has been sold.
Explanation:
The option writer has a SHORT position in options. This is when a writer sells a put or call they don't own; in other words, they are short the put or call.
Answer:
a. NOPAT = EBIT * (1-t)
NOPAT = $2,700 * (1-0.40)
NOPAT = $1,620
b. OCF = NOPAT + Depreciation
OCF = $1,620 + $1,600
OCF = $3,220
c. FCF = Net fixed asset investment - Net current asset investment
FCF = $3,320 - $1,400 - $1,400
FCF = $420
Note:
Net fixed asset investment = Change in net fixed assets + depreciation
= ($14,800- $ 15,000) + $1,600
= $1,400
Net current asset investment = Change in current assets - Change in accounts payable and accurals
= ($8,200 - $6,800) - {($1,600 + $200) - ($1,500 - $300)}
= $1,400
d. FCF is meaningful as it shows that OCF is able to cover Operating expenses as well as Investment in Fixed and Current Assets
