Solution a:
Computation of annual income - Commuter service | |
Particulars | Amount |
Sales Revenue (5*10*30*6*$12) | $108,000 |
Cost: | |
Gasoline | $16,000 |
Maintenance | $3,700 |
Repairs | $4,000 |
Insurance | $4,300 |
Advertising | $2,500 |
Payroll expense | $47,200 |
Depreciation ($73,932/3) | $24,644 |
Net Annual Income | $5,656 |
Computation of Cash Flows - Commuter service | |
Particulars | Amount |
Net Annual Income | $5,656 |
Add: Depreciation | $24,644 |
Annual cash flows | $30,300 |
Solution b:
Cash payback period = Initial investment / Annual cash inflows = $73,932 / $30,300 = 2.44 years
Annual rate of return = Average annual income / Average investment
Average investment = (Cost + Salvage value) / 2 = $73,932/2 = $36,966
Annual rate of return = $5,656 / $36,966 = 15.30%
Solution c:
Computation of NPV - Commuter service | ||||
Particulars | Amount | Period | PV Factor | Present Value |
Cash Outflows: | ||||
Cost of Investment | $73,932.00 | 0 | 1 | $73,932 |
Present Value of Cash Outflows (A) | $73,932 | |||
Cash Inflows: | ||||
Annual cash inflows | $30,300.00 | 1-3 | 2.28323 | $69,182 |
Present Value of Cash Inflows (B) | $69,182 | |||
Net Present Value (B-A) | -$4,750 |
Lon Timur is an accounting major at a midwestern state university located approximately 60 miles from...
Lon Timur is an accounting major at a midwestern state university located approximately 60 miles from a major city. Many of the students attending the university are from the metropolitan area and visit their homes regularly on the weekends. Lon, an entrepreneur at heart, realizes that few good commuting alternatives are available for students doing weekend travel. He believes that a weekend commuting service could be organized and run profitably from several suburban and downtown shopping mall locations. Lon has...
HELP PLS WORK INCLUDED Lon Timur is an accounting major at a midwestern state university located approximately 60 miles from a major city. Many of the students attending the university are from the metropolitan area and visit their homes regularly on the weekends. Lon, an entrepreneur at heart, realizes that few good commuting alternatives are available for students doing weekend travel. He believes that a weekend commuting service could be organized and run profitably from several suburban and downtown shopping...
pls show work! thank you Lon Timur is an accounting major at a midwestern state university located approximately 60 miles from a major city. Many of the students attending the university are from the metropolitan area and visit their homes regularly on the weekends. Lon, an entrepreneur at heart, realizes that few good commuting alternatives are available for students doing weekend travel. He believes that a weekend commuting service could be organized and run profitably from several suburban and downtown...
m/courses/35333/assignments/3691185?module_item_id=11817967 M Pau Lon Timur is an accounting major at a midwestern state university located approximately 60 miles from a major city. Many of the students attending the university are from the metropolitan area and visit their homes regularly on the weekends. Lon, an entrepreneur at heart, realizes that few good commuting alternatives are available for students doing weekend travel. He believes that a weekend commuting service could be organized and run profitably from several suburban and downtown shopping mall...
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John Patrus is an accounting major at an eastern university located approximately 60 miles from a major city. Many of the students attending the university are from the metropolitan area and visit their homes regularly on the weekends. John, an entrepreneur at heart, realizes that few good commuting alternatives are available for students doing weekend travel. He believes that a weekend commuting service could be organized and run profitably from several suburban and downtown shopping mall locations. John has gathered...
Lon Timur is an accounting major at a midwestern state university located approximately 60 miles from a major city. Many of the students attending the university are from the metropolitan area and visit their homes regularly on the weekends. Lon, an entrepreneur at heart, realizes that few good commuting alternatives are available for students doing weekend travel. He believes that a weekend commuting service could be organized and run profitably from several suburban and downtown shopping mall locations. Lon has...
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Assignment Gradebook WANAGERIAL AC ORION Downloadable eTextbook CALCULATOR MESSAGE MY INSTRUCTOR FULL SCREEN PRINTER VERSION (BAC Problem 12-2A a-c (Video) Lon Timur is an accounting major at a midwestern state university located approximately 60 miles from a major city. Man of the students attending the university are from the metropolitan area and visit their homes regularly on the weekends. Lon, an entrepreneur at heart, realizes that few good commuting alternatives are available for students doing weekend travel. He believes that...
e12.11 t Drake Corporation is reviewing an investment proposal The initial cost is $107,100. Estimates of the book value of the investment at the end of each year, the net cash flows for each year, and the net income for each year are presented in the schedule below. All cash flows are assumed to take place at the end of the year. The salvage value of the investment at the end of each year is assumed to equal its bookvalue....