(Click on the icon here spreadsheet.) in order to copy the contents of the data table below into a Project A $49,800 Project B $99,300 Project C $80,800 Project D $179,000 Initial investment (CF,) Year (t) Cash inflows (CF,) $20,400 $20,400 $20,400 $35,800 $51,000 $50,200 $20,200 $40,800 $60,900 1 $99,200 $79,900 $59, 100 3 Print Done
Reporting Cash Flows
Reporting of cash flows means a statement of cash flow which is a financial statement. A cash flow statement is prepared by gathering all the data regarding inflows and outflows of a company. The cash flow statement includes cash inflows and outflows from various activities such as operating, financing, and investment. Reporting this statement is important because it is the main financial statement of the company.
Balance Sheet
A balance sheet is an integral part of the set of financial statements of an organization that reports the assets, liabilities, equity (shareholding) capital, other short and long-term debts, along with other related items. A balance sheet is one of the most critical measures of the financial performance and position of the company, and as the name suggests, the statement must balance the assets against the liabilities and equity. The assets are what the company owns, and the liabilities represent what the company owes. Equity represents the amount invested in the business, either by the promoters of the company or by external shareholders. The total assets must match total liabilities plus equity.
Financial Statements
Financial statements are written records of an organization which provide a true and real picture of business activities. It shows the financial position and the operating performance of the company. It is prepared at the end of every financial cycle. It includes three main components that are balance sheet, income statement and cash flow statement.
Owner's Capital
Before we begin to understand what Owner’s capital is and what Equity financing is to an organization, it is important to understand some basic accounting terminologies. A double-entry bookkeeping system Normal account balances are those which are expected to have either a debit balance or a credit balance, depending on the nature of the account. An asset account will have a debit balance as normal balance because an asset is a debit account. Similarly, a liability account will have the normal balance as a credit balance because it is amount owed, representing a credit account. Equity is also said to have a credit balance as its normal balance. However, sometimes the normal balances may be reversed, often due to incorrect journal or posting entries or other accounting/ clerical errors.
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NPV, with rankings Botany Bay, Inc., a maker of casual clothing, is considering four projects shown in the following table,
Because of past financial difficulties,
ptions the company has a high cost of capital at 14.4%.
a. Calculate the NPV of each project, using a cost of capital of 14.4%.
b. Rank acceptable projects by NPV.
c. Calculate the IRR of each project and use it to determine the highest cost of capital at which all of the projects would be acceptable.
a. Calculate the NPV of each project, using a cost of capital of 14.4%.
The NPV of project A is $
(Round to the nearest cent.)
Is project A acceptable? (Select the best answer below.)
O A. No
O B. Yes
The NPV of project B is $
(Round to the nearest cent.)
la nreinnt Danontabl-2/0lest the hant an nr hale
Click to select your answer(s).
P Type here to search](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fcdd52474-2040-480f-9294-1ce164ebb249%2F96f053d1-232e-4b3b-9aee-af15f7f72fb8%2Fa2fa6l_processed.jpeg&w=3840&q=75)
![otany Ba
e of pas
cost of
Data Table
each p
ects by
each pr
(Click on the icon here
spreadsheet.)
in order to copy the contents of the data table below into a
each pi
Project A
$49,800
Project B
$99,300
Project C
$80,800
Project D
$179,000
Initial investment
(CF,)
(Selec
Year (t)
Cash inflows (CF,)
$20,400
$20,400
$20,400
$35,800
$51,000
$50,200
$20,200
$40,800
$60,900
$99,200
$79,900
$59, 100
Print
Done
10elor
wer(s).
123](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fcdd52474-2040-480f-9294-1ce164ebb249%2F96f053d1-232e-4b3b-9aee-af15f7f72fb8%2F9xg36pv_processed.jpeg&w=3840&q=75)
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