MANAGERIAL ACCOUNTING FUND. W/CONNECT
5th Edition
ISBN: 9781259688713
Author: Wild
Publisher: MCG
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Chapter 11, Problem 2BTN
To determine
Concept introduction:
Cash flow-it generally defines the advantages and the cost of a future project. As cost is represented through
Requirement 1:
To have an internal rate of return(IRR) 15% how much annually cash flow should Google earn from the project.
To determine
Concept introduction:
Cash flow-it generally defines the advantages and the cost of a future project. As cost is represented through cash outflows and benefits as cash inflow. The present value of a cash flow refers to the discounted value of the present month of prospect sum of money.
Internal rate of return (IRR)- is used in order to measure the profitability of the possible investment. It is a rate of discount that makes the net present value of all cash flow equal to zero.
Requirement 2:
To explain:
Compare to Apple’s required cash flows determined in BTN 11-1,implication about each cash flows of the company’s requirement for these types of projects.
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NPV Calculate the net present value (NPV) for the following 15-year projects. Comment on the acceptability of each. Assume that the firm has a cost of capital of 9%.
A. Initial investment is $1,000,000; cash inflows are $150,000 per year.
B. Initial investment is $2,500,000; cash inflows are $320,000 per year.
C. Initial investment is $3,000,000; cash inflows are $365,000 per year.
Assume Apple invested $2.12 billion to expand its manufacturing capacity. Assume that these assets have a 10-year life and that Apple requires a 10% internal rate of return on these assets. Required 1. What is the amount of annual cash flows that Apple must earn from these projects to have a 10% internal rate of return? Hint: Identify the 10-period, 10% factor from the present value of an annuity table, and then divide $2.12 billion by this factor to get the annual cash flows necessary 2. Access Apple’s financial statements for the fiscal year ended September 30, 2017, from Appendix A. a. Determine the amount that Apple invested in capital assets for 2017. Hint: Refer to the statement of cash flows. b. Did Apple invest more in capital assets or in marketable securities for 2017?
For a project that has a net investment of $1,500,000 and net cash flows of $400,000 for 5 years; Is the internal rate of return between (15% and 12%) or (10% and 12%). Explain your answer
Chapter 11 Solutions
MANAGERIAL ACCOUNTING FUND. W/CONNECT
Ch. 11 - Prob. 1MCQCh. 11 - Prob. 2MCQCh. 11 - Prob. 3MCQCh. 11 - Prob. 4MCQCh. 11 - Prob. 5MCQCh. 11 - Prob. 1DQCh. 11 - What is capital budgeting?Ch. 11 - Identify four reasons that capital budgeting...Ch. 11 - Prob. 4DQCh. 11 - Prob. 5DQ
Ch. 11 - Prob. 6DQCh. 11 - Prob. 7DQCh. 11 - Prob. 8DQCh. 11 - Prob. 9DQCh. 11 - Prob. 10DQCh. 11 - Prob. 11DQCh. 11 - Prob. 12DQCh. 11 - Prob. 13DQCh. 11 - Prob. 1QSCh. 11 - Prob. 2QSCh. 11 - Prob. 3QSCh. 11 - Prob. 4QSCh. 11 - Prob. 5QSCh. 11 - Prob. 6QSCh. 11 - Prob. 7QSCh. 11 - Prob. 8QSCh. 11 - Prob. 9QSCh. 11 - Prob. 10QSCh. 11 - Prob. 11QSCh. 11 - Prob. 12QSCh. 11 - Prob. 13QSCh. 11 - Prob. 14QSCh. 11 - Prob. 15QSCh. 11 - Prob. 16QSCh. 11 - Prob. 1ECh. 11 - Exercise 24-2 Net present value P3 Refer to the...Ch. 11 - Prob. 3ECh. 11 - Prob. 4ECh. 11 - Prob. 5ECh. 11 - Prob. 6ECh. 11 - Prob. 7ECh. 11 - Prob. 8ECh. 11 - Prob. 9ECh. 11 - Prob. 10ECh. 11 - Prob. 11ECh. 11 - Prob. 12ECh. 11 - Prob. 13ECh. 11 - Prob. 14ECh. 11 - Prob. 15ECh. 11 - Prob. 16ECh. 11 - Prob. 1PSACh. 11 - Most Company has as opportunity to invest in one...Ch. 11 - Prob. 3PSACh. 11 - Prob. 4PSACh. 11 - Prob. 5PSACh. 11 - Prob. 6PSACh. 11 - Prob. 1PSBCh. 11 - Prob. 2PSBCh. 11 - Prob. 3PSBCh. 11 - Prob. 4PSBCh. 11 - Prob. 5PSBCh. 11 - Prob. 6PSBCh. 11 - Prob. 11SPCh. 11 - Prob. 1BTNCh. 11 - Prob. 2BTNCh. 11 - Prob. 3BTNCh. 11 - Prob. 4BTNCh. 11 - Prob. 5BTNCh. 11 - Break into teams and identify four reasons that an...Ch. 11 - Read the chapter opener about Limor Fried and her...Ch. 11 - Prob. 8BTNCh. 11 - Prob. 9BTN
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