Wichita Industries' sales are 10% cash and 90% on credit. Credit sales are collected as follows: 30% in the month of sale, 50% i
1 answer:
Answer:
E. $60,500
Explanation:
The expected cash inflows for January comprise: 20% of all credit sales from November, 50% of credit sales from December, 100% of cash sales in January, and 30% of credit sales for January.
The $12,000 receivable from November is set to be fully collected in January.
The $42,000 receivable from December corresponds to the 70% to be collected across January and February. The amount collected in January is:
The amount from cash sales in January is:
From the credit sales in January (30%), the amount is:
The total cash inflow (T) received in January sums up as:
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Answer:
The Internal Rate of Return (IRR) assesses how profitable the capital that remains invested across the duration of a project is. It is also recognized as the discount rate that brings the Net Present Value (NPV) to zero. Therefore, if employing the IRR leads us to zero for the NPV, it implies the project neither creates nor destroys value.
The required rate of return signifies the minimum expected return an investor anticipates when committing to a project.
If investment in both projects remains throughout their lifespan, both could work well for the investor. However, as they are mutually exclusive, a choice must be made. If project B’s investment is held throughout its duration, it will possess a greater internal rate of return, thus suggesting its selection. Nevertheless, it is wise to evaluate additional financial indicators, as the IRR assumes reinvestment of all earnings into the same project, which may not reflect reality where returns might not be reinvested at the same rate.
The attached figure illustrates the IRR formula. However, I computed it through Excel: initially, I documented the cash flows for each year (the first being negative due to initial investment). I then applied the formula: "=IRR(D5:C8)" for project A and "=IRR(E5:E8)" for project B.
Answer:
Explanation:
(a). By plotting the data on an Excel spreadsheet, the uploaded image below represents our findings
(b) The sample correlation coefficient is calculated using the Excel Correlation function as follows;
Admission Rate (%) 4-Year Graduation Rate (%)
44 73
71 62
29 89
39 86
66 55
28 73
54 63
10 88
26 84
43 77
76 71
67 68
6 86
66 59
81 66
18 88
31 71
9 84
15 86
8 88
17 84
56 62
51 79
54 68
75 50
13 86
40 70
67 68
41 47
68 71
∴ The calculated value of the sample correlation coefficient is = -0.76
This indicates that the two variables exhibit a moderately linear inverse correlation.
Cheers, I hope this is useful.
