Jordan purchased a franchise agreement to distribute electronic gadgets for 8 years. The agreement cost $1,600,000 and she had to make investments of $875,000 for the first 2 years to set up her showroom. The franchise generated $1,050,000 in profits each year from the 1st year to 8 years afterwards. At the end of year 8, she sold the furniture in her showroom for $105,000. (5marks) a. What is the Internal Rate of Return (IRR)? b. Should she have proceeded with this plan if her cost of capital was 19% ? .
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- OLA#11.3 Mitchell purchased a franchise agreement to distribute electronic gadgets for 7 years. The agreement cost $2,200,000 and he had to make investments of $875,000 for the first 2 years to set up his showroom. The franchise generated $1,025,000 in profits each year from the 1st year to 7 years afterwards. At the end of year 7, he sold the furniture in his showroom for $120,000. a. What is the Internal Rate of Return (IRR)? b. Should he have proceeded with this plan if his cost of capital was 18%? Kindly add all the decimals DO NOT ROUNDOLA #11.3 Manvir purchased a franchise agreement to distribute electronic gadgets for 9 years. The agreement cost $1,700,000 and she had to make investments of $875,000 for the first 2 years to set up her showroom. The franchise generated $1,075,000 in profits each year from the 1st year to 9 years afterwards. At the end of year 9, she sold the furniture in her showroom for $110,000. a. What is the Internal Rate of Return (IRR)? b. Should she have proceeded with this plan if her cost of capital was 14%? Please reply using details with algebraRandy rents commercial warehouses to various businesses. He purchased a warehouse in May of the current year. The cost of the warehouse was $250,000 The depreciation for the current year will be $ (rounded to the nearest dollar). If Randy continues to rent the warehouse for the next 40 years, the depreciation in the 40th year he owns the warehouse will be $ . (Please refer to the tables at the end of the chapter for the MACRS depreciation rates for this problem.) Please dont use any AI. It's strictly prohibited. Help me asap please.
- PLEASE ANSWER THE QUESTIONS BELOW AND BE SURE TO SHOW THE FORMULAS AND THE WORK. THANIK YOU :) 1) Janet purchased a new house for $120,000, obviously not in New York. She paid $35,000 down and agreed to pay the rest over the next 25 years in 25 equal end-of-year payments, plus 9% compound interest on the unpaid balance. What will these equal payments be?Mrs Galicia gave her sisters $3000 each to invest. The investment will last 8 years. The table shows what each sister did with their investment and how it changed over 8 years. Use the chart to answer the following questions please 1. What is the balance of Michelle's $3000 after 8 years? 2. What is the balance of Kristen's $3000 after 8 years? 3. What is the balance of Gabriella's $3000 after 8 years? 4. What is the balance of Judy's $3000 after 8 years? 5. Who has the most money at the end of the 8 years? If i were to choose one of the options to use for my own money, which option should I choose?Jan purchased 100 shares of Peach Computer stock for $18 per share, plus a $45 brokerage commission. Every 6 months she received a dividend from Peach of 50 cents per share. At the end of 2 years, just after receiving the fourth dividend, she sold the stock for $23 per share and paid a $58 brokerage commission from the proceeds.What annual rate of return did she receive on her investment? Solution: 1. NPW=PW of Benefits - PW of Costs=0 o Number of terms n= o PW of Benefits = (P/A,i*,n)+ (P/F,i*,n); O PW of Costs= 2. Find IRR through interpolation o Try i*=7%, NPW= o Try i*=8%, NPW= o Through interpolation, ROR= % 3. Other Calculations: o Nominal rate r= %; o Effective rate iz= %.
- Amy and Jevin Mounty own a textile design business in Beau Bassin. They bought a new computer which cost $4000 on 1 January 2020. The depreciation charge for the computer was 40% per annum using reducing balance method. Because of rapid developments in technology, the computer was out of date by end of 2021. Amy decided to sell the computer and was offered $600 which she accepted. The computer was sold on 31 December 2021. The financial year for the business runs from 1 January to 31 December.a. Calculate the accumulated depreciation charge and the net book value of the computer at the end of 2020 and 2021. b. Calculate the profit or loss on disposal of the computer.c. Show the Computer account and the Provision for depreciation Account for the year ended 31 December 2020. d. List down all the journal entries for the disposal of the computer.Rita is keen to grow her business and provided some information on two transactlons that she undertook during the year. The first was the purchase of an individual asset for the business called a Techpager. wwym ww The initial cost of the machine itself was $32,000 with several extra required fees and charges. Rita also decided to include a number of optional extras in the purchase. Installation of Techpager $1500 Transportation and Shipping Costs $600 Extended Warranty/Service Program $300 per year. This is an optional service offered by the company that covers all maintenance and repairs costs and is paid annually in advance Sorting and Stapling Unit $1200 (required to allow Rita to produce the booklets for her business) Custom Painting $400 (Rita does not need to have this done but has decided she wants the machine to match her office décor) Insurance $500 per year payable in advance Prepare a general Journal entry to record the individual of the purchase business called Techpager.Saul Cervantes has just purchased some equipment for his landscaping business. For this equipment, he must pay the following amounts at the end of each of the next five years: $10, 450, $ 8, 500, $9,675, $12, 500, and $11, 635. If the appropriate discount rate is 10.875 percent, what is the cost in today's dollars of the equipment Saul purchased today? Please show the excel equation
- John bought a trailer for $28000. She owns the trailer for 5 years and wants to sell it. Thedepreciation of the trailer is 35%. How much is the trailer worth when he goes to sell it? (deals with sequences and series)Jane just inherited $30,000 from a rich uncle. She decides to invest the money for a period of 5 1) years and then use the accumulated amount to make a down payment on a new house. EzMoney, Inc. is willing to pay 6% per year compounded monthly on a five-year investment, but they will charge an administrative fee that is 2% of the amount invested and this has to be paid initially at the time of investment. HiReturn, Inc., offers 5.75% per year compounded daily if she deposits the entire amount in their premier investment fund. Which investment option should Jane choose and why?1. Maria is the owner and operator of a small local bakery that has annual sales revenue of $200,000. The annual salary expense paid to Maria's employees is $50,000. The cost of supplies used during the year totals $50,000. The amount paid for the annual rent for the building and utilities is $30,000. Maria used $100,000 of her personal savings to purchase equipment for the shop. Maria could have earned a 10% interest rate on this $100,000 if it had been left in the bank. Maria has rerently been offered a job to work full-time as a pastry chef for $65,000 at a restaurant in town.. 1. Calculate the accounting profit for this business. 2. Calculate the economic profit for this business. 3. Explain whether Maria should continue to own and operate the bakery or whether she should accept the job at the restaurant.