Answer to Question 16:
Initial Investment = $394,000
Annual Income = $53,000
Accounting Rate of Return = Annual Income / Initial
Investment
Accounting Rate of Return = $53,000 / $394,000
Accounting Rate of Return = 13.45%
Answer to Question 17:
Cash Flows:
Year 0 = -$56,000
Year 1 = $18,000
Year 2 = $18,000
Year 3 = $18,000
Year 4 = $18,000
Let IRR be i%
NPV = -$56,000 + $18,000/(1+i) + $18,000/(1+i)^2 +
$18,000/(1+i)^3 + $18,000/(1+i)^4
0 = -$56,000 + $18,000/(1+i) + $18,000/(1+i)^2 + $18,000/(1+i)^3 +
$18,000/(1+i)^4
Using financial calculator, i = 10.87%
IRR of the project is 10.87%
IRR of the project is higher than the hurdle rate; therefore, you should accept this project.
10. Over the River Manufacturing purchased a machine for $394,000 with an expected useful lite of...
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please answer these questions. Nothing's Limited is considering investing $140,000 in a project that would provide the following net cash flows: 15. buoulsy.oovioa Eilo eso ni 000,es2eubong o1 bstsq $38,000 $ 38,000 $35,000 $ 33,000 $20,000 Year 1 Year 2 I anidheM awolt ria Year 3 Year 4 00082 Year 5 What is the project's payback period? dairdw to noleibsb it eanm o bordem suley Juoz na toa adt2s20 1nwo art snno 30smtanl no muto lsunne NS 20w odz bna...
A company buys a machine for $60,000 that has an expected life of nine years and no salvage value. The company anticipates a yearly net income of $2,850 after taxes of 30%, with the cash flows to be received evenly throughout of each year. What is the accounting rate of return?
A company buys a machine for $60,000 that has an expected life of 9 years and no salvage value. The company anticipates a yearly net income of $2,850 after taxes of 30%, with the cash flows to be received evenly throughout each year. What is the accounting rate of return?
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