Annual cash inflow | 83000 | |
X PV factor 9% | 6.4177 | =(1-(1.09)^-10)/0.09 |
Present value of Annual cash inflow | 532669 | |
Less: Investment cost | 520000 | |
Net Present value | 12669 | or 12666 |
M11-7 Calculating Net Present Value, Predicting Internal Rate of Return [LO 11-3, 11-4] Vaughn Company has...
E11-3 Calculating Net Present Value, Internal Rate of Return [LO 11-3, 11-4 Merrill Corp. has the following information available about a potential capital investment: Initial investment Annual net income Expected life Salvage value Merrill's cost of capital $ 800,000 $ 80,000 8 years $ 90,000 7% Assume straight line depreciation method is used. Required: 1. Calculate the project's net present value. (Future Value of $1. Present Value of $1, Future Value Annuity of $1, Present Value Annuity of $1.) (Use...
PA11-1 Calculating Accounting Rate of Return, Payback Period, Net Present Value, Estimating Internal Rate of Return [LO 11-1, 11-2, 11-3, 11-4] Balloons By Sunset (BBS) is considering the purchase of two new hot air balloons so that it can expand its desert sunset tours. Various information about the proposed investment follows: Initial investment (for two hot air balloons) Useful life Salvage value Annual net income generated BBS's cost of capital $ 356,000 7 years $ 48,000 26,700 8% Assume straight...
Vaughn Company has the following information about a potential capital investment: $ $ Initial investment Annual cash inflow Expected life Cost of capital 450,000 77,000 9 years 9% 1. Calculate the net present value of this project. (Future Value of $1, Present Value of $1, Future Value Annuity of $1, Present Value Annuity of $1.) (Use appropriate factor(s) from the tables provided. Round the final answer to nearest whole dollar.) Net Present Value
Vaughn Company has the following information about a potential capital investment: Initial investment $ 310,000 Annual cash inflow $ 75,000 Expected life 7 years Cost of capital 14% 1. Calculate the net present value of this project. (Future Value of $1, Present Value of $1, Future Value Annuity of $1, Present Value Annuity of $1.) (Use appropriate factor(s) from the tables provided. Round the final answer to nearest whole dollar.) Net Present Value
Vaughn Company has the following information about a potential capital investment: 420,000 87,000 9 years 14% Initial investment Annual cash inflow Expected life Cost of capital $ 1. Calculate the net present value of this project. (Future Value of $1, Present Value of $1, Future Value Annuity of $1, Present Value Annuity of $1.) (Use appropriate factor(s) from the tables provided. Round the final answer to nearest whole dollar.) Net Present Value
3 300 polnts PA11-1 Calculating Accounting Rate of Return, Payback Period, Net Present Velue, Estimating Internal Rate of Return [LO 11-1, 11-2,11-3 4] Balloons By Sunset (BBS) is considering the purchase of two new hot air belloons so thet it cen expand its desert sunset tours. Various information about the propose investment follows: Initial investment ffor two hot air balloons) Useful Ife Salrage value Annual net income generated BBSs cost of capital 507.000 10 years $ 47,000 40.551 8% Assume...
net present value method, internal rate of return method, and analysis Net Present Value Method, Internal Rate of Return Method, and Analysis The management of Quest Media Inc. is considering two capital investment projects. The estimated net cash flows from each project are as follows: Year Radio Station TV Station $410,000 $820,000 410,000 820,000 410,000 820,000 410,000 820,000 Present Value of an Annuity of $1 at Compound Interest Year 6% 3 2 0.943 1.833 .673 3.465 4.212 4.917 10% 0.909...
Mastery Problem: Net Present Value and Internal Rate of Return Part One Companies use capital investment analysis to evaluate long-term investments. Capital investment evaluation methods that use present values are (1) Net present value method (NPV) and (2) Internal rate of return (IRR) method. Methods That Use Present Values Of the two capital investment evaluation methods, a defining characteristic NPV and IRR is that they consider the time value of money. This means that money tomorrow is worth less than money today....
Net Present Value Method, Internal Rate of Return Method, and Analysis for a Service Company The management of Advanced Alternative Power Inc. is considering two capital investment projects. The estimated net cash flows from each project are as follows: Wind Biofuel Year Turbines Equipment $180,000 $360,000 180,000 360,000 180,000 360,000 180,000 360,000 The wind turbines require an investment of $513,900, while the biofuel equipment requires an investment of $1,093,320. No residual value is expected from either project. Present Value of...
Net Present Value Method, Internal Rate of Return Method, and Analysis for a Service Company The management of Advanced Alternative Power Inc. is considering two capital investment projects. The estimated net cash flows from each project are as follows: Year Wind Turbines Biofuel Equipment 1 $340,000 $650,000 2 340,000 650,000 3 340,000 650,000 4 340,000 650,000 The wind turbines require an investment of $880,260, while the biofuel equipment requires an investment of $1,855,750. No residual value is expected from either...