Annual cash inflow = cost saving = $9730
Present value of an annuity of 1 = Investment / annual cash inflow
= $40000 / 9730
= 4.111
Internal rate of return = 12%
--/10 Question 9 View Policies Current Attempt in Progress Sheridan, Inc. is considering purchasing equipment costing...
Marigold, Inc. is considering purchasing equipment costing $34000 with a 6-year useful life. The equipment will provide annual cost savings of $8270 and will be depreciated straight-line over its useful life with no salvage value. Marigold requires a 10% rate of return. Period 6 8% 4.623 Present Value of an Annuity of 1 9% 10% 11% 12% 4.486 4.355 4.231 4.111 15% 3.784 What is the approximate internal rate of return for this investment? 11% 9% O 10% O 12%
Splish Brothers, Inc. is considering purchasing equipment costing $76000 with a 6-year useful life. The equipment will provide annual cost savings of $18487 and will be depreciated straight-line over its useful life with no salvage value. Splish Brothers requires a 10% rate of return. Present Value of an Annuity of 1 Period 8% 9% 10% 11% 12% 15% 6 4.623 4.486 4.355 4.231 4.111 3.784 What is the approximate internal rate of return for this investment? 9% 10% 11% 12%
Johnson Company is considering purchasing one of two new machines. The following estimates are available for each machine: Machine 1 Machine 2 Initial cost $152,000 $169,000 Annual cash inflows 50,000 60,000 Annual cash outflows 15,000 20,000 Estimated useful life 6 years 6 years The company's minimum required rate of return is 9%. Present Value of an Annuity of 1 Period 8% 9% 10% 11% 12% 15% 6 4.623 4.486 4.355 4.231 4.111 3.784 Requirement: Compute Payback, NPV, PI, and IRR...
Cullumber, Inc. is considering purchasing equipment costing $30000 with a 6-year useful life. The equipment will provide annual cost savings of $7200 and will be depreciated straight-line over its useful life with no salvage value. Cullumber requires a 10% rate of return. Present Value of an Annuity of 1 What is the approximate internal rate of return for this investment? 12% 9% 10% 11%
--/10 Question 10 View Policies Current Attempt in Progress Marigold Company is considering buying equipment for $260000 with a useful life of 5 years and an estimated salvage value of $10000. If annual expected income is $28000, the denominator in computing the annual rate of return is $260000 $130000. $270000 $135000
Multiple Choice Question 114 CullumberCompany is considering two capital investment proposals. Estimates regarding each project are provided below: Project Soup Project Nuts Initial investment $200000 $400000 Annual net income 16000 46000 Net annual cash inflow 60000 97000 Estimated useful life 5 years 6 years Salvage value 0 0 The company requires a 10% rate of return on all new investments. Present Value of an Annuity of 1 Periods 9% 10% 11% 12% 5 3.89 3.791 3.696 3.605 6 4.486 4.355...
View Policies Current Attempt in Progress Sheridan Company acquires equipment at a cost of $44.100 on January 3, 2021. Management estimates the equipment will have a residual value of $6,300 at the end of its 4-year useful life. Assume that the company uses the diminishing-balance method and that the diminishing-balance depreciation rate is double the straight-line rate. Calculate the depreciation expense for each year of the equipment's life. Do not leave any answer field blank. Enter o for amounts.) Depreciation...
Skysong Company is considering two capital investment proposals. Estimates regarding each project are provided below: Project Soup Project Nuts Initial investment $400,000 $600,000 Annual net income $18,000 34,000 Net annual cash inflow $96,000 119,000 Estimated useful life 5 years 6 years Salvage 0 0 The company requires a 10% rate of return on all new investments Present Value of an Annuity of 1 Periods 9% 10% 11% 12% 5 3.89 3.791 3.696 3.605 6 4.486 4.355 ...
--/10 Question 7 View Policies Current Attempt in Progress Marigold Co. purchased some equipment 3 years ago. The company's required rate of return is 12%, and the net present value of the project was $(900). Annual cost savings were: $7000 for year 1:5000 for year 2; and $3000 for year 3. The amount of the initial investment was Year Present Value of 1 at 12% 0.893 0.797 0.712 PV of an Annuity of 1 at 12% 0.893 1.690 2.402 $11472...
MarigoldCompany is considering two capital investment proposals. Estimates regarding each project are provided below: Project Soup Project Nuts Initial investment $305000 $504000 Annual net income 30000 46000 Net annual cash inflow 110000 146000 Estimated useful life 5 years 6 years Salvage value 0 0 The company requires a 10% rate of return on all new investments. Present Value of an Annuity of 1 Periods 9% 10% 11% 12% 5 3.89 3.791 3.696 3.605 6 4.486 4.355 4.231 4.111 The cash...