Exercise 16-1Identifying cash inflows and outflows

Indicate which of the following items will result in cash inflows and which will result in cash outflows. The first one is shown as an example.

|Initial investment |Outflow | |Salvage values |Inflow | |Recovery of working capital |Inflow | |Incremental expenses |Outflow | |Working capital commitments |Outflow | |Costsavings |Inflow | |Incremental revenue |Inflow |

Exercise 16-2Determining the present value of a lump-sum future cash receipt

Stan Sweeney turned 20 years old today. His grandfather established a trust fund that will pay Mr. Sweeney $80,000 on his next birthday. However, Stan needs money today to start his college education. His father is willing to help and has agreed to give Stan the present value of the future cash inflow, assuming a 10 percent rate of return.

Required

A. Use a present value table to determine the amount of cash that Stan Sweeney’s father should give him.

Using the Present Value of $1 table,
The factor for 1 year at 10% rate of return is 0.90909

Based of The Present Value, Stan Sweeney's father should give him $72,727.20

B. ) Use an algebraic formula to prove that the present value of the trust fund (the amount of cash computed in Requirement a) is equal to its $80,000 future value.

Investment + (0.90909 x Investment) = $80,000
$72,727 + (0.12 x $72,727.20) =$80,000
$72,727 + $7,273 =...

...investments that are expected to generate positive NPV’s.
If a firm has several projects that are expected to generate negative IRR’s.
If a firm has more than one project with a positive NPV.
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Question 5
Your answer is correct.
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...permission to do this. If the appropriate interest rate is 6 percent, what is the present value of the cash flow stream that the company is offering you? (Round answer to the nearest whole dollar, e.g. 5,275.)
Present value
$
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Question 5
Barbara is considering investing in a stock and is aware that the return on that investment is particularly sensitive to how the economy is performing. Her analysis suggests that four states of the economy can affect the return...

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Running head: COMPARING IFRS TO GAAP
University of Phoenix
ACC/290
Week5
8/12/2014
Susan KuniyoshiRunning head: COMPARING IFRS TO GAAP
IFRS 2-1: In what ways does the format of a statement of financial of position under IFRS often differ from a balance sheet presented under GAAP?
IFRS does not mandate a specific order or classification of accounts on the statement of financial position. In most cases, companies report assets in reverse order of...

...Chapter Eight Problems
Please complete the following 5 exercises below in either Excel or a word document (but must be single document). You must show your work where appropriate (leaving the calculations within Excel cells is acceptable). Save the document, and submit it in the appropriate week using the Assignment Submission button.
Chapter 8 Exercise 1:
1. Basic present value calculations
Calculate the present value of the following cash...

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1/2/20X3 Purchases on account: 500 units @ $6 = $3,000
1/15/20X3 Sales on account: 300 units @ $8.50 = $2,550
1/20/20X3 Purchases on Account: 200 units @ 5 = $1,000
1/25/20X3 Sales on Account: 300 units @ $8.50 = $2,550
The company president examined the computer-generated journal entries for these transactions and was confused by the absence of a Purchases account.
a. Duplicate...

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Learning Healthcare Organizations
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There are two healthcare organizations that I will be discussing that have transformational change to promote/create learning organization. One is the Centers for Disease Control and Prevention (CDC), and the other one is International Agency for Research on Cancer (IARC). CDC is a federal agency under the Department of Health and...

...out and taken is the only thing reflected on the cash flows statement. This can help companies recognize when additional funding is required and if they should consider borrowing. The cash flow statement divides a company’s cash flows for an accounting period into three activities: operating, investing and financing. Operating activities are all cash flows related to the day to day operations. They include accounts receivables, accounts payables, and other operating cash...