acct

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ACCT203 FINAL EXAM ANSWER SHEET FORM

THERE ARE THREE PARTS TO QUESTION #1

QUESTION # 1 – RX17

THE TIME LINE CHART :

TVM Time-Line

THE COMPUTATION

THERE ARE THREE PARTS TO QUESTION #1

QUESTION # 1 – BQ81

THE TIME LINE CHART :

TVM Time-Line

THE COMPUTATION

THERE ARE THREE PARTS TO QUESTION #1

QUESTION # 1 – MP12

AFTER YOU HAVE ANALYZED EACH PROJECT- SINCE THE SEDLIK GROUP ONLY HAS A CAPITAL FUND OF $50,000, WHICH PROJECTS SHOULD THEY PURSUE AND HOW MUCH WILL THEY USE?

· PROJECT RX17 – INITIAL INVESTMENT = ___________

· PROJECT BQ81 – INITIAL INVESTMENT = ___________

· PROJECT MP12 – INITIAL INVESTMENT = ___________

TOTAL CAPITAL ALLOCATION =

THE TIME LINE CHART :

TVM Time-Line

THE COMPUTATION

QUESTION # 2

ANSWER - SHOW YOUR WORK

This is the level of additional ANNUAL cash flow (per year) from the intangible benefits that would make the investment in the automated equipment financially attractive: $ ___________________

THE TIME LINE CHART :

TVM Time-Line

THE COMPUTATION

QUESTION # 3

ANSWERS - SHOW YOUR WORK

1. DRAW A TIME LINE GRAPH FOR THIS PROJECT.

2. COMPUTE THE NECESSARY ANNUITY VALUE - USING A 12% DISCOUNT RATE.

· Annual additional revenue needed to reach a 12% rate of return =

· If the annual attendance increases by 40,000, the ticket price should be increased by an average of nearest full $ amount = $________________ to assure a 12% rate of return.

THE TIME LINE CHART :

TVM Time-Line

THE COMPUTATION

QUESTION # 4

1. DRAW A TIME LINE GRAPH FOR THIS PROJECT.

2. COMPUTE THE NET PRESENT VALUE USING A 12% DISCOUNT RATE.

THE TIME LINE CHART :

TVM Time-Line

THE COMPUTATION

QUESTION # 5

1. DRAW A TIME LINE GRAPH FOR THIS PROJECT.

2. COMPUTE THE NET PRESENT VALUE USING A 10% DISCOUNT RATE.

THE TIME LINE CHART :

TVM Time-Line

THE COMPUTATION

QUESTION # 6

1. DRAW A TIME LINE GRAPH FOR THIS PROJECT.

2. COMPUTE THE NET PRESENT VALUE USING A 10% DISCOUNT RATE.

3. IF TYNDELL’S EXPECTED A 12% RATE, WOULD THEY BUY THIS MACHINE?

· Choose YES ☐ or NO ☐ (check one box) BECAUSE:________________________

THE TIME LINE CHART :

TVM Time-Line

THE COMPUTATION

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