Wise company is considering an investment that requires an, Ask an Expert

Accounting

Wise Company is considering an investment that requires an outlay of $600,000 and promises an after-tax cash inflow 1 year from now of $689,500. The company's cost of capital is 8%.

Required:

1. Break the $689,500 future cash inflow into three components: (a) the return of the original investment, (b) the cost of capital, and (c) the profit earned on the investment. Now compute the present value of the profit earned on the investment. If required, round your answers to the nearest dollar.

(a) Return of the original investment$ (b) Cost of capital$ (c) Profit earned on the investment$
Present value of profit

$2. Conceptual Connection: Compute the NPV of the investment. Round your intermediate calculations and final answer to the nearest dollar.

$I just need the Present value of profit and #2 answered (In a detailed answer please).

View complete question

Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M9968984

Have any Question?Write your Review or question?

Related Questions in Accounting Basics

Question - sanchez consulting companymark sanchez

Question - Sanchez Consulting Company Mark Sanchez established Sanchez Consulting Company on September 1, 2018, as a backup plan since he is now a free agent and has been suspended for the first four games of the season. ...

Question review the course project guidelinesin the last

Question: Review the Course Project Guidelines. In the last module, you completed your estimate of cash flows for your project. In this module, you will calculate the break-even point for the project and the expected fin ...

Question - on april 1 2019 austin corporation issued 300000

Question - On April 1, 2019, Austin Corporation issued $300,000 of 10% bonds at 105. Each $1,000 bond was sold with 25 detachable stock warrants, each permitting the investor to purchase one share of common stock for $17 ...

Question - kramer corp reported the following sale and

Question - Kramer Corp. reported the following sale and purchase transactions related to a specific product in January 2017: Date Transaction Quantity Unit Cost Unit Sales Price Jan 01 Beginning inventory 5 $90 Jan 03 Sa ...

Question requirement 1 read the article in below attachment

Question: Requirement: 1. Read the article in below attachment, and answer the questions in a paper format. Read below requirements before your writing! 2. Not to list the answers, and you should write as a paper format. ...

Accounting question - simon companys year-end balance

Accounting Question - Simon Company's year-end balance sheets follow: At December 31 2017 2016 2015 Assets Cash $31,800 $35,625 $37,800 Accounts receivable, net 89,500 32,500 50,200 Merchandise inventory 112,500 82 ...

Question please respond to the followingfor this weeks

Question: Please respond to the following. For this week's collaborative activity, review Apple Inc.'s most recent financial statements. Apple's Financial Information. Based on your analysis of Apple's most recent financ ...

Question - on january 1 2016 company x had an inventory

Question - On January 1, 2016, Company X had an inventory balance of $200,000. During the year, Company X had net purchases of $1,000,000 and net sales of $900,000. Historically, Company X's gross profit ratio has been 4 ...

Question - 1 paid 20000 cash to purchase equipment costing

Question - 1. Paid $20,000 cash to purchase equipment costing $80,000. The remaining amount was recognized as a one year note payable with interest rate of 9%. 2. A major dental machine in our office is broken beyond rep ...

Question - ismail construction enters into a contract to

Question - Ismail Construction enters into a contract to design and build a hospital. Ismail is responsible for the overall management of the project and identifies various goods and services to be provided, including en ...

4,153,160 Questions Asked
13,132 Experts
2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Recent Questions

Ask Accounting Basics Expert