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guapka [62]
2 years ago
4

A property was acquired for $950,000 and then produced cash flows of $100,000, $120,000, $135,000, $135,000, and $125,000 at the

end of years one through five, respectively. The property was then sold for $1,200,000 at the end of the fifth year. What was the internal rate of return for this investment?

Business
1 answer:
S_A_V [24]2 years ago
3 0

Answer:

IRR= 17%

Explanation:

The internal rate of return is the profitability (IRR) of the money that remains invested during a project life. To calculated we need to use the net present value formula (NPV). The IRR is the rate at which the NPV is cero. I attached the formula but it is better to calculate the IRR using excel.

First, you have to copy all cash flows including the investment with a negative sign. Then you use the financial formula "IRR" in this way:

"=IRR(C3:C8)" (I attached the excel figure)

In this case, you have to sum the cash flow produced by the property plus the earnings of the its sale on year 5.

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For 2019, Bargain Basement Stores reported $11,500 of sales and $5,000 of operating costs (including depreciation). The company
Kamila [148]

Answer:

Economic Value Added (EVA) = $2,620

Explanation:

WACC = 11%

Capital = $20,500

Sales = $11,500

Operating cost = $5,000

Tax rate = 25%

EBIT = Sales - Operating cost

EBIT = $11,500 - $5,000

EBIT = $6,500

Economic Value Added (EVA) = EBIT (1 - T) - (WACC * Capital)

Economic Value Added (EVA) = 6,500*( 1 - 0.25) - (0.11 * $20,500)

Economic Value Added (EVA) = $4,875 - $2,255

Economic Value Added (EVA) = $2,620

5 0
2 years ago
A recent study conducted by Estelle Cosmetics Company showed that heavy users of Estelle's products comprise a small percentage
s344n2d4d5 [400]

Answer: Segmentation by usage

Explanation: Segmentation by usage splits customers according to how often they use a product. Using segmentation by usage, customers can be classified into non - users, who don't use the product at all, light and medium users, who can range from little usage of the product to average use of the product, and heavy users, who mostly use these products.

From thr first paragraph it is clear that usage segmentation is used to separate the user's into different classes based on their usage, and identify which class to target when it comes to sales. At Estelle Cosmetics Company, it was deduced that of this company's total sales, less than 7% of this market are heavy users. These users purchase nearly 71% of the company's products. This company will probably focus their marketing efforts on the heavy users, as they contribute to the majority of sales within their company.

7 0
2 years ago
The cover letter should _____. a. be a minimum of two pages in length b. never ask for an interview c. introduce you to an emplo
eimsori [14]

✧・゚: *✧・゚:*    *:・゚✧*:・゚✧

                  Hello!

✧・゚: *✧・゚:*    *:・゚✧*:・゚✧

❖ The cover letter should c. introduce you to an employer.

~ ʜᴏᴘᴇ ᴛʜɪꜱ ʜᴇʟᴘꜱ! :) ♡

~ ᴄʟᴏᴜᴛᴀɴꜱᴡᴇʀꜱ

8 0
2 years ago
Read 2 more answers
Determining the Optimal Product Mix with One Constrained Resource Relax Spas provides two types of massage services, the Full Bo
m_a_m_a [10]

Answer:

Full body = $132

For trouble spots = $180

Explanation:

The computation of contribution margin per hour is shown below:-

For Full body

Contribution per service = $198

Massage time required in minutes = $90

Massage time required (90 min ÷ 60 min) = $1.5

Contribution per hour = $198 × $1.5

= $132

For Trouble spots

Contribution per service = $90

Massage time required in minutes = $30

Massage time required (30 min ÷ 60 min) = $0.5

Contribution per hour = $90 × $0.5

= $180

5 0
2 years ago
An insurance company divides its customers into 2 groups. Twenty percent of customers are in the high-risk group, and eighty per
tatuchka [14]

Answer:

0.0923 or 9.23%

Explanation:

We have to use the Poisson distribution:

P(x) = (0.2 x e⁻¹) / [(0.2 x e⁻¹)+ (0.8 x e⁻⁰°¹)]

  • e = 2.71828 (given)
  • lambda = λ = 0.1

0.073578 / (0.073578 + 0.72387) = 0.073578 / 0.79744 = 0.092267 or 9.23%

The Poisson distribution is used to calculate the probability of occurrence of independent and random variables.

3 0
2 years ago
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