User Account

All Pages

What is the cross-over rate

Assignment Help Financial Accounting
Reference no: EM132506139

The following cash flows are given.

Year     A                   B

0     -300,000     -300,000

1      40,000         170,000

2      60,000           90,000

3         90,000       60,000

4        120,000        30,000

5         150,000       40,000

Question a) What is the net present value (NPV) at 12% and internal rate of return (IRR) methods of both projects? Which would you recommend and why?

Question b) What is the cross-over rate? Explain the significance of this rate.

Question c) What two consecutive cash flows in years 4 and 5 of project B would equalize its NPV to the NPV of project B, assuming a 12% rate of return?

Reference no: EM132506139

Questions Cloud

Which machine should bruno purchase and why : Whichever machine is purchased will be replaced at the end of its useful life. The tax rate is 20%. Which machine should Bruno's purchase and why?
Compute the number of shares of common stock issued : Compute the number of shares of common stock issued and outstanding at December 31, 2018. Prepare the journal entries for each
Compute the project''s cash flows of year 0 : (1) Compute the project's cash flows of year 0? Year 1? Year 2? Year 3? Year 4? Year 5?
What is the contribution margin per unit under : The sales price is estimated at $750 per unit, give or take 2%. What is the contribution margin per unit under the best case scenario?
What is the cross-over rate : What two consecutive cash flows in years 4 and 5 of project B would equalize its NPV to the NPV of project B, assuming a 12% rate of return?
Calculate the value of xyz stock today : Using the Dividend Discount Model, please calculate the value of XYZ stock today. If the cost of equity capital increases to 8% after 5 years, how does that aff
Prepare the journal entry to record borrowing transaction : Prepare the journal entry to record the payment of the interest in December 1, 2019. Prepare the journal entry to record the borrowing transaction.
BIT100 Introduction To Information Technology Skills : BIT100 Introduction To Information Technology Skills Assignment Help and Solution - Emirates College of Technology, UAE - Assessment Writing Service
Describe the process of determining cash provided from : Chose one section of the Statement of Cash Flows and describe the process of determining cash provided from, or cash used by in the section

Reviews

Write a Review

Financial Accounting Questions & Answers

  Noncash consideration should be

Noncash consideration should be

  Describe the position of closing cash throughout the year

FNSACC503 Manage Budget and Forecasts - Describe the position of closing cash throughout the year. The owner realises that there will be significant expenses

  Discuss the rights of common stockholders

List and discuss the Rights of common stockholders and Rights of preferred stockholders. Rockwell Industries purchased a plant asset to be used in its business. The expenditures included.

  Prepare the appropriate journal entry to record compensation

Prepare the appropriate journal entry(s) on December 31, 2022 and 2023 in response to the new estimate. Determine the total compensation cost pertaining

  How to identify the financial statements

Identify the financial statements on which each of the following titles or accounts would appear. If a title or an account appears on more than one statement, list all statements that would include it.

  Future taxable amounts and and future deductible amounts

Define temporary differences, future taxable amounts, and future deductible amounts.

  How much would profits increase

Assume that there are 2,000 hours available on the cutting machine and that the demand for each product is 15,000 units. If one more hour of machine time could be obtained, how much would profits increase?

  Illustrate what business risks does jetblue face

Illustrate what business risks does JetBlue face that may threaten the company’s ability to satisfy stockholder expectations? What are some examples of control activities that the company could use to reduce these risks?

  Calculate break-even and prepare a cash budget for january

Calculate break-even in units - calculate break-even in pounds if the sales price increases by 10% and fixed costs increase by £12,000.

  Prepare the required aje for december

WannaBee Corporation has $1,500,000 of Receivables on December 31, 2000. Prepare the Required AJE for December 31, 2000. Prepare the Required AJE for December 31, 2001.

  What is the average daily collection float

What is the average daily collection float? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.)

  What is the company after-tax income using fifo

Assuming that a periodic inventory system is used and operating expenses of $2800, what is the company's after-tax income using FIFO?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd