The investment costs $48,000 and has an estimated $10,200 salvage value. e) 42.75%. Compute the accounting rate of return for this investment; assume the company uses straight-line depreciation. To make this happen, the firm, Wilcox Company is considering an investment that will generate cash revenues of $120,000 per year for 8 years, and have cash expenses of $60,000 per year for 8 years. 8 years b. What method, A machine costs $400,000 and is expected to yield an after-tax net income of $9,000 each year. The investment is expected to return the following cash flows, discounts at 8%. Compute this machine's accoun, A machine costs $500,000 and is expected to yield an after-tax net income of $15,000 each year. The net present value of the investment is A) $1,470 B) ($13,550) C) $6,450, The Zinger Corporation Is considering an Investment that has the following data: Cash Inflows occur evenly throughout the year. Use the following table: | | Present Value o. The salvage value is defined as the estimated book value of any asset after deducting all the depreciation on the asset. The management of Samsung is planning to invest in a new companywide computerized inventory tracking system. Management predicts this machine has a 12-year service life and a $40,000 salvage value, and it uses straight-line depreciation. Select Chart Amount x PV Factor = Present Value Cash Flow Annual cash flow Residual value Net present value, Required information [The folu.ving information applies to the questions displayed below.) The equipment has a five-year life and an estimated salvage value of $50,000. What, Tijuana Brass Instruments Company treats dividends as a residual decision. What is the present valu, Strauss Corporation is making an $85,200 investment in equipment with a 5-year life. This investment will produce certain services for a community such as vehicle kilometres, seat . The project is expected to have an after-tax return of $250,000 in each of years 1 and 2. Required information Use the following information for the Quick Study below. Compu, Lanyard Company is considering an investment that will generate $600,000 in cash inflows per year for 7-years and has $240,000 of cash outflows for the same period (before income taxes). For (n= 10, i= 9%), the PV factor is 6.4177. The company anticipates a yearly net income of $3,700 after taxes of 20%, with the cash flows to be received evenly throughout each year. Assume Peng requires a 15% return on its investments. Compute this machines accounting rate of return. The investment costs $56,100 and has an estimated $7,500 salvage value. What is the present value, Strauss Corporation is making a $71,900 investment in equipment with a 5-year life. Peng Company is considering an investment expected to generate an average net income after taxes of $3,250 for three years. If the accounting rate of return is 12%, what was the purchase price of the mac. criteria in order to generate long-term competitive financial returns and . The investment costs $45,000 and has an estimated $6,000 salvage value. The investment costs $45,000 and has an estimated $6,000 salvage value. (20-year, 12% pr, What is the NPV and IRR for the two investments options below? Management estimates that this machine will generate annual after-tax net income of $540. What is the cash payback period? 76,000 b. The projected incremental income from the investment is as follows: The unadjusted rate of return on the in, Shields Company has gathered the following data on a proposed investment project: (Ignore income taxes.) The machine will cost $1,772,000 and is expected to produce a $193,000 after-tax net income to be re, A company can buy a machine that is expected to have a three-year life and a $36,000 salvage value. #define An irrigation canal contractor wants to determine whether he Cash Flow Annual cash flow Present Value of an Annuity of1 Residual value Present Value of 1 Select Chart Amount x PV FactorPresent Value $ 8,700 x Present value of cash inflows Immediate cash outflows Net present value 45,600
A. The fair value of the equipment is $476,000. (PV of $1. Compute the payback period. Year 0 ($400,000) initial investment Year 1 $140,000 Year 2 120,000 Year 3 100,000 Year 4 80,000, A company has a minimum required rate of return of 10%. Management estimates the machine will yield an after-tax net income of $12,500 each year. Capital investment $180,000 Estimated useful life 3 years Estimated salvage value 0 Estimated annual net cash inflow $75,000 Required rate of return 10% What is the net present value of the inv, If an asset costs $210,000 and is expected to have a $30,000 salvage value at the end of its 10-year life, and it generates annual net cash inflows of $30,000, the cash payback period is: a. Assume Peng requires a 5% return on its investments. D. Representing a taxpayer at a hearing, Take a single physical copy of a book as a cost object. View some examples on NPV. Peng Company is considering an investment expected to generate an average net income after taxes of $1,950 for three years. Yearly cash inflows = 3,300 + 16,200 = Our experts can answer your tough homework and study questions. Compute the net present value of this investment. Our experts can answer your tough homework and study questions. Project 1 requires an initial investment of $400,000 and has a present value of cash flows of $1,100,000. The company currently has no debt, and its cost of equity is 15 percent. What is the return on investment? The investment costs $45,600 and has an estimated $6,600 salvage value Compute the accounting rate of return for this investment, assume the company uses straight-line depreciation. Experts are tested by Chegg as specialists in their subject area. earnings equal sales minus the cost of sales If a table of present v, A company can buy a machine that is expected to have a three-year life and a $29,000 salvage value. Assume Peng requires a 5% return on its investments. Capital investment - $15,000 Estimated useful life - 3 years Estimated salvage value - zero Estimated net cash inflow Year 1 - $7,000 Year, A company bought a machine that has an expected life of 7 years and no salvage value. Amount x PV Factor = Present Value Cash Flow Annual cash flow Select Chart Present Value of an Annuity of 1 II Residual value II Net present value. The company uses the straight-line method of depreciation and has a tax rate of 40 percent. Management predicts this machine has a 10-year service life and a $100,000 salvage value, and it uses st, A machine costs $700,000 and is expected to yield an after-tax net income of $30,000 each year. Peng Company is considering an investment expected to generate an average net income after taxes Peng Company is considering an investment expected to generate an average net income after taxes of $1,950 for three years. TABLE B.4 f= [(1 + i)"-1Vi Future Value of an Annuity of 1 Rate Periods 1% 2% 3% 6% 7% 8% 9% 10% 12% 15% 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 0000 .0000 1.0000 10000 2.0100 2.0200 2.0300 2.0400 2.0500 2.0600 2.0700 2.0800 2.0900 2.1000 2.1200 3.0301 3.0604 3.0909 3.1216 3.1525 3.1836 3.2149 3.2464 3.2781 3.3100 3.3744 4.0604 4.1216 4.1836 4.2465 4.3101 4.3746 4.4399 5.1010 5.2040 5.3091 5.4163 5.5256 5.6371 5.7507 5.8666 5.9847 6.1051 6.3528 6.1520 6.3081 6.4684 6.6330 6.8019 6.9753 7.1533 7.3359 7.5233 7.7156 8.1152 7.2135 7.4343 7.6625 7.8983 8.1420 8.3938 8.6540 8.9228 9.2004 9.4872 10.0890 8.2857 8.5830 8.8923 9.2142 9.5491 9.8975 10.2598 10.6366 11.0285 11.4359 12.2997 9.3685 9.7546 10.1591 10.5828 11.0266 11.4913 11.9780 12.4876 13.0210 13.5795 14.7757 1.0000 2.1500 3.4725 4.9934 6.7424 8.7537 11.0668 4.5061 4.5731 4.6410 4.7793 16.7858 10 10.4622 10.9497 11.4639 12.0061 12.5779 13.1808 13.8164 14.4866 15.1929 15.9374 17.5487 20.3037 11.5668 12.1687 12.8078 13.4864 14.2068 14.9716 15.7836 16.6455 7.5603 18.5312 20.6546 24.3493 12.6825 13.4121 14.1920 15.0258 15.9171 16.8699 17.8885 18.9771 20.1407 21.3843 24.1331 12 13 13.8093 14.6803 15.6178 16.6268 17.7130 18.8821 20.1406 21.4953 22.9534 24.5227 28.0291 14 14.9474 15.9739 17.0863 18.2919 19.5986 21.0151 22.5505 24.2149 26.0192 27.9750 32.3926 40.5047 15 16 17.2579 18.6393 20.1569 21.8245 23.6575 25.6725 27.8881 30.3243 33.0034 35.9497 42.7533 55.7175 17 18.4304 20.0121 21.7616 23.6975 25.8404 28.2129 30.8402 33.7502 36.9737 40.5447 48.8837 65.0751 18 19 20.8109 22.8406 25.1169 27.6712 30.5390 33.7600 37.3790 41.4463 46.0185 51.1591 63.4397 88.2118 20 22.0190 24.2974 26.8704 29.7781 33.0660 36.7856 40.9955 45.7620 51.1601 57.2750 72.0524 102.4436 25 30 35 41.6603 49.9945 60.4621 73.6522 90.3203 111.4348 138.2369 172.3168 215.7108 271.0244 431.6635 40 48.8864 60.4020 75.4013 95.0255 120.7998 154.7620 199.6351 259.0565 337.8824 442.5926 767.0914 1,779.0903 29.0017 34.3519 16.0969 7.2934 18.5989 20.0236 21.5786 23.2760 25.1290 27.1521 29.3609 31.7725 37.2797 47.5804 19.6147 21.4123 23.4144 25.6454 28.1324 30.9057 33.9990 37.4502 41.3013 45.5992 55.7497 75.8364 28.2432 32.0303 36.4593 41.6459 47.7271 54.8645 63.2490 73.1059 84.7009 98.3471 133.3339 212.7930 34.7849 40.5681 47.5754 56.0849 66.4388 79.0582 94.4608 113.2832 136.3075 164.4940 241.3327 434.7451 881.1702 Used to calculate the future value of a series of equal payments made at the end of each period. Capital investment: $15,000 Estimated useful life: 3 years Estimated salvage value: zero Estimated net cash inflow Year 1: $7,000 Year 2: You have the following information on a potential investment. Management predicts this machine has a 10-year service life and a $100,000 salvage value, and it uses straight-line depreciation. What amount should Elmdale Company pay for this investment to earn a 12% return? c) 6.65%. A. Calculate its book value at the end of year 6. Peng Company is considering an investment expected to generate an average net income after taxes of $1,950 for three years. distributed with a mean of 78 when mixing oil and water is the change in entropy positive or The investment costs $45,300 and has an estimated $7,500 salvage value. water? Compute this machine's accou, A machine costs $300,000 and is expected to yield an after-tax net income of $9,000 each year. copyright 2003-2023 Homework.Study.com. The payback period for this investment Is: a) 3 years b) 3.8 years c) 4, A company is contemplating investing in a new piece of manufacturing machinery. Capital investment - $100,000 Estimated useful life - 3 years Estimated salvage value - zero Estimated net cash inflow Year 1 - $50,000 Year 2 - $47,000 Year 3 - $44,000 Required rate, You have the following information on a potential investment: Capital Investment - $100,000 Estimated useful life - 3 years Estimated salvage value - zero Estimated net cash inflow: Year 1 - $50,000 Y, Lt. Dan Corporation invested $90,000 in manufacturing equipment. The investment costs $45,000 and has an estimated $6,000 salvage value. Axe Corporation is considering investing in a machine that has a cost of $25,000. Compute the net present value of this investment. To find the NPV using a financial calacutor: 1. Peng Company is considering an investment expected to generate an average net income after taxes of $2,700 for three years. Given the riskiness of the investment opportunity, your cost of capital is 27%. Compute the accounting rate of return for this investment; assume the company uses straight-line depreciation. Which option should the company choose to invest in? Assume Peng requires a 10% return on its investments. Peng Company is considering an investment expected to generate an average net income after taxes of $1,950 for three years. Peng Company is considering an investment expected to generate an average net income after taxes of $2,000 for three years. The investment costs $57.600 and has an estimated $8,400 salvage value. $1,950 for three years. Assume the company uses straight-line depreciation (PV of $1. (Do not round intermediate calculations.). A machine that costs $770,000 has an estimated residual value of $70,000 and an estimated useful life of 7 years. To help in this, compute the cost of capital for the firm for the following: a. Assume the company uses straight-line depreciation. It is considering investing in a project which costs $350,000 and is expected to generate cash inflows of $140,000 at the end of each year for three years. A machine costs $210,000, has a $16,000 salvage value, is expected to last nine years, and will generate an after-tax income of $47,000 per year after straight-line depreciation. The cost of the investment is. The equipment will be depreciated on a straight-line basis over 5-year life and is expected to generate net cash inflows of $45,000 the first year, $65,000 the second year, and $, The Seago Company is planning to purchase $436,400 of equipment with an estimated seven-year life and no estimated salvage value. Compute the net present value of this investment. Jimmy Co. seeks to earn an average rate of return of 18% on all capital projects. The building has an estimated useful life of 40 years and an expected salvage value of $550,000. The company s required rate of return is 14 percent. The IRR on the project is 12%. Select chart Estimate Longlife's cost of retained earnings. The company uses the straight-line method of depreciation and has a tax rate of 40 percent. The investment costs $48,900 and has an estimated $12,000 salvage value. Carmino Company is considering an investment in equipment that is expected to generate an after-tax income of $5,000 for each year of its four-year life. The asset is recorded at $810,000 and has an economic life of eight years. Corresponding with the IRS in writing The investment costs $48,600 and has an estimated $6,300 salvage value. Compute the accounting rate of return for this investment; assume the company uses straight-line depreciation. Thomas Company can acquire an $850,000 lathe that will benefit the firm over the next 7 years. Peng Company is considering an investment expected to generate an average net income after taxes of $2,600 for three years. Investment required in equipment $530,000 ; Annual cash inflows $74,000 ; Salvage value $0 ; Li, Your company has been presented with an opportunity to invest in a project. What is the average amount invested in a machine during its predicted five-year life if it costs $200,000 and has a $20,000 salvage value? The expected future net cash flows from the use of the asset are expected to be $580,000. 2003-2023 Chegg Inc. All rights reserved. Park Co. is considering an investment that requires immediate payment of $27,000 and provides expected cash inflows of $9,000 annually for four years. Required information The following information applies to the questions displayed below Peng Company is considering an investment expected to generate an average net income after taxes of $3,500 for three years. Assume Peng requires a 10% return on its investments, compute the net present value of this investment. The investment costs $48,600 and has an estimated $6,300 salvage value. (Round answer to 2 decimal places. Coins can be redeemed for fabulous Compute the net present value of this investment. Become a Study.com member to unlock this answer! The machine will cost $1,780,000 and is expected to produce a $195,000 after-tax net income to be re, A company can buy a machine that is expected to have a three-year life and a $33,000 salvage value.
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