Dobrinski Corporation has provided the following information concerning a capital budgeting project: After-tax discount rate 14%Tax rate 30%Expected life of the project 4 Investment required in equipment$240,000 Salvage value of equipment$0 Working capital requirement$30,000 Annual sales$630,000 Annual cash operating expenses$480,000 One-time renovation expense in year 3$60,000 The company uses straight-line depreciation on all equipment. Assume cash flows occur at the end of the year except for the initial investments. The company takes income taxes into account in its capital budgeting.?See separate Exhibit 13B-1 to determine the appropriate discount factor(s) using table.The net present value of the project is closest to:
A. $144,210
B. $59,949
C. $210,000
D. $77,709
Answer: D
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On December 31, Year 1, Allen Company's total current assets were $600,000 and its total current liabilities were $380,000. On January 1, Year 2, Allen paid $20,000 on accounts payable.Required:(a) Compute Allen's working capital before and after paying the account payable.(b) Compute Allen's current ratio before and after paying the account payable. Round your answer to two decimal places.
What will be an ideal response?
The Workers Rights Consortium: I. Combats sweatshops by monitoring and investigating working conditions in factories around the world. II. Is a U.S. government organization. III. Covers contractors, subcontractors and manufacturers
a. I. only b. I and II only c. I and III only d. I, II, and III
Ten people were given two types of cereal, Brand X and Brand Y. Three people preferred Brand X, five people preferred Brand Y, and two people were undecided. We want to determine whether or not the two products are equal. To test the null hypothesis, the appropriate probability distribution to use is a _____
a. normal distribution b. chi-square distribution c. Poisson distribution d. binomial distribution
When comparing two projects with different lives, why do you compute an annuity with an equivalent present value (PV) to the net present value (NPV)?
A) so that you can see which project has the greatest net present value (NPV) B) so that the projects can be compared on their cost or value created per year C) to reduce the danger that changes in the estimate of the discount rate will lead to choosing the project with a shorter timeframe D) to ensure that cash flows from the project with a longer life that occur after the project with the shorter life has ended are considered