Velma and Keota (V&K) is a partnership that is considering two alternative investment opportunities. The first investment opportunitywill have a four-year useful life, will cost $8,747.24, and will generate expected cash inflows of $2,700 per year. The second investmentis expected to have a useful life of four years, will cost $8,449.76, and will generate expected cash inflows of $2,900 per year. Assumethat V&K has the funds available to accept only one of the opportunities. (PV of $1 and PVA of $1)Note: Use appropriate factor(s) from the tables provided.Requireda. Calculate the internal rate of return of each investment opportunity.Note: Do not round intermediate calculations.b. Based on the internal rates of return, which opportunity should V&K select?a. First investmenta. Second investmentb. V&K should select theInternal Rate of Return%%< Prev9 of 11Next >

IRR is also known as Internal Rate of Return.. It is a capital budgeting technique which helps in…

Answered: Velma and Keota (V&K) is a partnership…

College Accounting, Chapters 1-27 (New in Accounting from Heintz and Parry)

22nd Edition

ISBN:9781305666160

Author:James A. Heintz, Robert W. Parry

Publisher:James A. Heintz, Robert W. Parry

Chapter19: Accounting For Partnerships

Section: Chapter Questions

Problem 1MP

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Velma and Keota (V&K) is a partnership that owns a small company. It is considering two alternative investment opportunities. The first investment opportunity will have a three-year useful life, will cost $10,378.31, and will generate expected cash inflows of $4.100 per year. The second investment is expected to have a useful life of three years, will cost $6,963.19, and will generate expected cash inflows of $2,800 per year. Assume that V&K has the funds available to accept only one of the opportunities. (PV of $1and PVA of S0 (Use appropriete factor(s) from the tables provided.) Required a. Calculate the internal rate of return of each investment opportunity. (Do not round intermediate calculations.) b. Based on the internal rates of return, which opportunity should V&K select? Internal Rate of Return a First investment Second investment b. V&K should select the
Velma and Keota (V&K) is a partnership that owns a small company. It is considering two alternative investment opportunities. The first investment opportunity will have a five-year useful life, will cost $15,169.64, and will generate expected cash inflows of $3,900 per year. The second investment is expected to have a useful life of four years, will cost $10,073.45, and will generate expected cash inflows of $3,600 per year. Assume that V&K has the funds available to accept only one of the opportunities. (PV of $1 and PVA of $1) (Use appropriate factor(s) from the tables provided.) Required a. Calculate the internal rate of return of each investment opportunity. (Do not round intermediate calculations.) b. Based on the internal rates of return, which opportunity should V&K select? Internal Rate of Return % a. First investment % Second investment b. V&K should select the second investment
Velma and Keota (V&K) is a partnership that owns a small company. It is considering two alternative investment opportunities. The first investment opportunity will have a four-year useful life, will cost $8,542.83, and will generate expected cash inflows of $3,300 per year. The second investment is expected to have a useful life of four years, will cost $9,936.38, and will generate expected cash inflows of $3,000 per year. Assume that V&K has the funds available to accept only one of the opportunities. (PV of $1 and PVA of $1) (Use appropriate factor(s) from the tables provided.) Required Calculate the internal rate of return of each investment opportunity. (Do not round intermediate calculations.) first investment %? second investment %?
Hal.3 Velma and Keota (V&K) is a partnership that is considering two alternative investment opportunities. The first investment opportunity will have a four-year useful life, will cost $13,548.84, and will generate expected cash inflows of $4,000 per year. The second investment is expected to have a useful life of five years, will cost $9,495.45, and will generate expected cash inflows of $2,900 per year. Assume that V&K has the funds available to accept only one of the opportunities. (PV of $1 and PVA of $1) Note: Use appropriate factor(s) from the tables provided. Required a. Calculate the internal rate of return of each investment opportunity. Note: Do not round intermediate calculations. b. Based on the internal rates of return, which opportunity
Cook, Jing, and Schwartz formed the CJS Partnership by making investments of $144,000, $216,000, and $120,000, respectively. They predict annual partnership net income of $240,000 and are considering the following alternative plans of sharing income and loss: (a) equally; (b) in the ratio of their initial capital investments; or (c) salary allowances of $40,000 to Cook, $30,000 to Jing, and $80,000 to Schwartz; interest allowances of 12% on their initial capital investments; and the remaining balance shared equally. Required 1.how to distribute net income of $240,000 for the calendar year under each of the alternative plans being considered.
Carlo invested the following in the partnership being formed with Jamie: Cash of P60,000; Land of P200,000 with an appraised value of P410,000; Store furniture costing P40,000 less accumulated depreciation of P10,000; Mortgage note payable P15,000 plus accrued interest for a year at 18%. The mortgage note is to be assumed by the partnership together with any unpaid interest incurred on the note. How much will be Carlo’s initial capital on the partnership being formed?
Maxwell and Smart are forming a partnership. Maxwell is investing a building that has a market value of $180,000. However, the building carries a $56,000 mortgage that will be assumed by the partnership. Smart is investing $120,000 cash. The balance of Maxwell's Capital account will be: Multiple Choice $180,000. $124,000. $56,000. $64,000. $60,000.
Ana, Bea and Carol decided to form a partnership contributing the following items. Ana is to invest her existing business in the partnership consisting of the following accounts; cash of P20,000; accounts receivable of P50,000; inventory P30,000; fixtures of P40,000; payables of P12,000. Bea on the other hand is to invest cash of P15,000 and a delivery truck costing P30,000 but is mortgaged with the bank for P20,000. The partners agree that the receivables will re have a 90% realizable value. The inventory would be valued at P20,000. P5,000 of the payables would be paid prior to the formation of the partnership. The delivery truck would have a 20% increase in its market value. The partnership will shoulder only 80% of the mortgage and Carol is to invest cash to be able to have a 40% interest in the partnership.How much cash should Carol invest in the newly formed partnership?A. 61,200 B. 138,000 C. 60,800 D. 102,000
Andy and Amy agree to form a partnership with Andy investing the following: Land (with mortgage note) Cost - P1,500,000 Market Value - P3,500,000 Building Cost - P5,000,000 Market Value - P2,500,000 Accumulated Depreciation Cost - P1,500,000 Amy will invest cash equal to half of Andy's investment. There is a PNB note of P1, 200, 000 which will be assumed by the partnership. Give two journal entries to record the investments of the partner.
Watts and Lyon are forming a partnership. Watts invests $36,000 and Lyon invests $54,000. The partners agree that Watts will work one-fourth of the total time devoted to the partnership and Lyon will work three-fourths. They have discussed the following alternative plans for sharing income and loss: (a) in the ratio of their initial capital investments; (b) in proportion to the time devoted to the business; (c) a salary allowance of $15,000 per year to Lyon and the remaining balance in accordance with the ratio of their initial capital investments; or (d) a salary allowance of $15,000 per year to Lyon, 12% interest on their initial capital investments, and the remaining balance shared equally. The partners expect the business to perform as follows: Year 1, $15,000 net loss; Year 2, $37,500 net income; and Year 3, $62,500 net income.
Watts and Lyon are forming a partnership. Watts invests $36,000 and Lyon invests $54,000. The partners agree that Watts will work one-fourth of the total time devoted to the partnership and Lyon will work three-fourths. They have discussed the following alternative plans for sharing income and loss: (a) in the ratio of their initial capital investments; (b) in proportion to the time devoted to the business; (c) a salary allowance of $15,000 per year to Lyon and the remaining balance in accordance with the ratio of their initial capital investments; or (d) a salary allowance of $15,000 per year to Lyon, 12% interest on their initial capital investments, and the remaining balance shared equally. The partners expect the business to perform as follows: Year 1, $15,000 net loss; Year 2, $37,500 net income; and Year 3, $62,500 net income. Required:Complete the tables, one for each of the first three years, by showing how to allocate partnership income or loss to the partners under each of…
On December 1, 2020 Beauty and phull are combining their separate business to form a partnership. cash and non-cash assets are to be contributed. the non cash assets to be contributed and liabilities to be assumed are as follows: Beauty and Phull are to invest equal amounts of cash such that the contribution of BEAUTY would be 10% more than the investmentof Phull. What is the total amount of capital of PHULL UPON Formation?

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