Tuesday
March 31, 2015

Homework Help: Accounting

Posted by Anna on Thursday, June 14, 2012 at 8:41pm.

I am trying to figure out how to do this problem:
scenarios (projected $90,000 annual cash inflow vs. projected $70,000 annual cash inflow). Note, 5 years of $90,000 per year equals $450,000 of total cash received over the duration of the project ($350,000 for 2nd project). But, due to the time value of money (i.e. inflation) that $450,000 cash received is not worth that amount in today's dollars.

You first need to determine what the PV of the cash inflows are for each of the two projects. Then, you need to determine the Net Present Value of that project (PV Cash Inflows - Cost of Investment). Once you have the NPV of the two projects AND what actually occurred, then use the bonus structure of the company to calculate the manager's bonus for each of the two projects: (NPV Actual - NPV Project #1) * 10%.

Answer this Question

First Name:
School Subject:
Answer:

Related Questions

Finance - Your firm is looking at a new investment opportunity, Project Alpha, ...
accounting help please?! - Nancy Sly wishes to sell her business and receives ...
accounting help please?! - Nancy Sly wishes to sell her business and receives ...
Accounting - Janfer Book Store purchased a new automobile that cost $10,000, ...
accounting cash flow - Hi, i have a problem with my statement of cash flow, I ...
Finance - Equipment cost $625,000, salvage value $50,000 at end of 10 yrs. ...
accounting - Assets Cash (Net Effect) $35,000 20,000 +15,000 A/R 33,000 14,000 +...
fiance - 2. Analyze the following scenario: Duncombe Village Golf Course is ...
business - Analyze the following scenario: Duncombe Village Golf Course is ...
accounting - . Preference Decisions: NPV vs. IRR vs. Profitability Index ...

Members