Chapter 26 Question 1: (1 point) Calculate the average rate of return for an equipment that...
Chapter 26 Question 1: (1 point) Calculate the average rate of
return for an equipment that has a cost of $320,000, an estimated
residual value of $20,000, and is estimated to result in total
income of $170,000 over 5 years.
Chapter 26 Question 2: (1 point) Calculate the cash payback period
for an equipment that has a cost of $200,000. The net cash flows
for years 1 through 5 are, $90,000, $60,000, $40,000, $20,000, and
$15,000 respectively.
Chapter 26 Question 3 (3 points) Warren Corporation is considering
the purchase of a new equipment costing $500,000. The company
desired rate of return is 10%. The net cash flows for years 1
through 5 are, $200,000, $160,000, $140,000, $100,000, and $60,000
respectively. The present value factors for $1 at 10% for 1 through
5 years are 0.909, 0.826, 0.751, 0.683, and 0.621 respectively. In
addition, the following information is available:
Required: Calculate the net present value. When entering your
answer in Blackboard, omit $ signs.
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Chapter 26 Question 1: (1 point) Calculate the average rate of
return for an equipment that...
1) 2) 3) 4) 5) The primary advantages of the average rate of return method are...
1)
2)
3)
4)
5)
The primary advantages of the average rate of return method are its ease of computation and the fact that a. there is less possibility of loss from changes in economic conditions and obsolescence when the commitment is short-term Ob. it is especially useful to managers whose primary concern is liquidity Oc. it emphasizes the amount of income earned over the life of the proposal Od. rankings of proposals are necessary The management of Wyoming Corporation...
The management of ABC Corporation is considering the purchase of a new machine costing $430,000. The...
The management of ABC Corporation is considering the purchase of a new machine costing $430,000. The company's desired rate of return is 10%. The present value factors for $1 at compound interest of 10% for 1 through 5 years are 0.909, 0.826, 0.751, 0.683, and 0.621, respectively. In addition to the foregoing information, use the following data in determining the acceptability in this situation by using the NPV methodology calculations Income from Operations Net Cash Flow Year a AwN- $100,000...
The management of Dakota Corporation is considering the purchase of a new machine costing $420,000. The...
The management of Dakota Corporation is considering the purchase of a new machine costing $420,000. The company's desired rate of return is 10%. The present value factors for $1 at compound interest of 10% for 1 through 5 years are 0.909, 0.826, 0.751, 0.683, and 0.621, respectively. In addition to the foregoing information, use the following data in determining the acceptability of this investment: Year Income from Operations Net Cash Flow 1 $100,000 $180,000 2 40,000 120,000 3 20,000 100,000...
Discuss the various classification of cost. 3. A company is considering investment in a project that...
Discuss the various classification of cost. 3. A company is considering investment in a project that costs Rs. 2,00,000. The estimated cash inflow from the project are as follows: Year Cash Inflow Present value factor at 10% 70,000 0.909 80.000 0.826 1,20,000 0.751 90,000 0.683 60.000 0.621 Calculate Net Present Value at P.V 10%
The management of Arkansas Corporation is considering the purchase of a new machine costing $490,000. The...
The management of Arkansas Corporation is considering the purchase of a new machine costing $490,000. The company's desired rate of return is 10%. The present value factors for $1 at compound interest of 10% for 1 through 5 years are 0.909, 0.826, 0.751, 0.683, and 0.621, respectively. In addition to the foregoing information, use the following data in determining the acceptability of this investment: Year Income from Operations Net Cash Flow 1 $100,000 $180,000 2 40,000 120,000 3 40,000 100,000...
A. Using the following partial table of present value of $1 at compound Interest, the present...
A. Using the following partial table of present value of $1 at compound Interest, the present value of $79,077 to be received three years hence with earnings at the rate of 6% a year is (round to two decimal points). Year 6% 10% 12% 0.943 0.909 0.893 2 0.890 0.826 0.797 0.840 0.751 0.712 4 0.792 0.683 0.636 $66,424.68 $50,292.97 $54,009.59 $62,628.98 B.Use these present value table to answer the question that follow Below is a table for the present...
TUTO SECTION 2 1. From the following information, calculate the net present value of the two...
TUTO SECTION 2 1. From the following information, calculate the net present value of the two pro two projects should be accepted. resent value of the two project andsuggest which of the Particulars Investment Project Y 30,000 dhs Estimated Life Project X 20,000 dhs 5 years 1,000 dhs 5 years Scrap Value 2,000 dhs The cash inflows are as follows: Project Year 1 Name Year 2 Year 3 Year 4 Year 5 Project 5,000 10,000 10,000 3,000 2,000 Project 20,000...
Teks Quiz Calculator Heedy Inc. is considering a capital investment proposal that costs $400,000 and has...
Teks Quiz Calculator Heedy Inc. is considering a capital investment proposal that costs $400,000 and has an estimated life of four years, and no residual value. The estimated net cash flows are as follows: Net Cash Flow $195,000 160,000 120,000 83,000 The minimum desired rate of return for net present value analysis is 10%. The present value of $1 at compound interest rates of 10% for 1, 2, 3, and 4 years is 0.909, 0.826, 0.751, and 0.683, respectively. Determine...
A project has estimated annual cash flows of $90,000 for 3 years and is estimated to...
A project has estimated annual cash flows of $90,000 for 3 years and is estimated to cost $250,000. Assume a minimum acceptable rate of return of 10%. Present Value of $1 at Compound Interest Year 6% 10% 12% 1 0.943 0.909 0.893 2 0.890 0.826 0.797 3 0.840 0.751 0.712 4 0.792 0.683 0.636 5 0.747 0.621 0.567 Present Value of an Annuity of $1 at Compound Interest Year 6% 10% 12% 1 0.943 0.909 0.893 2 1.833 1.736 1.690...
Average Rate of Return Method, Net Present Value Method, and Analysis The capital investment committee of...
Average Rate of Return Method, Net Present Value Method, and Analysis The capital investment committee of Ellis Transport and Storage Inc. is considering two investment projects. The estimated income from operations and net cash flows from each investment are as follows: Warehouse Net Cash Tracking Technology Income from Net Cash Operations Flow Year Flow $326,000 275,000 Income from Operations $65,100 65,100 65,100 65,100 65,100 $325,500 194,000 $204,000 204,000 204,000 204,000 204,000 $1,020,000 $137,000 104,000 52,000 23,000 9,500 9,500 $325,500 133,000...
1)
2)
3)
4)
5)
The primary advantages of the average rate of return method are its ease of computation and the fact that a. there is less possibility of loss from changes in economic conditions and obsolescence when the commitment is short-term Ob. it is especially useful to managers whose primary concern is liquidity Oc. it emphasizes the amount of income earned over the life of the proposal Od. rankings of proposals are necessary The management of Wyoming Corporation...
The management of ABC Corporation is considering the purchase of a new machine costing $430,000. The company's desired rate of return is 10%. The present value factors for $1 at compound interest of 10% for 1 through 5 years are 0.909, 0.826, 0.751, 0.683, and 0.621, respectively. In addition to the foregoing information, use the following data in determining the acceptability in this situation by using the NPV methodology calculations Income from Operations Net Cash Flow Year a AwN- $100,000...
Discuss the various classification of cost. 3. A company is considering investment in a project that costs Rs. 2,00,000. The estimated cash inflow from the project are as follows: Year Cash Inflow Present value factor at 10% 70,000 0.909 80.000 0.826 1,20,000 0.751 90,000 0.683 60.000 0.621 Calculate Net Present Value at P.V 10%
A. Using the following partial table of present value of $1 at compound Interest, the present value of $79,077 to be received three years hence with earnings at the rate of 6% a year is (round to two decimal points). Year 6% 10% 12% 0.943 0.909 0.893 2 0.890 0.826 0.797 0.840 0.751 0.712 4 0.792 0.683 0.636 $66,424.68 $50,292.97 $54,009.59 $62,628.98 B.Use these present value table to answer the question that follow Below is a table for the present...
TUTO SECTION 2 1. From the following information, calculate the net present value of the two pro two projects should be accepted. resent value of the two project andsuggest which of the Particulars Investment Project Y 30,000 dhs Estimated Life Project X 20,000 dhs 5 years 1,000 dhs 5 years Scrap Value 2,000 dhs The cash inflows are as follows: Project Year 1 Name Year 2 Year 3 Year 4 Year 5 Project 5,000 10,000 10,000 3,000 2,000 Project 20,000...
Teks Quiz Calculator Heedy Inc. is considering a capital investment proposal that costs $400,000 and has an estimated life of four years, and no residual value. The estimated net cash flows are as follows: Net Cash Flow $195,000 160,000 120,000 83,000 The minimum desired rate of return for net present value analysis is 10%. The present value of $1 at compound interest rates of 10% for 1, 2, 3, and 4 years is 0.909, 0.826, 0.751, and 0.683, respectively. Determine...
Average Rate of Return Method, Net Present Value Method, and Analysis The capital investment committee of Ellis Transport and Storage Inc. is considering two investment projects. The estimated income from operations and net cash flows from each investment are as follows: Warehouse Net Cash Tracking Technology Income from Net Cash Operations Flow Year Flow $326,000 275,000 Income from Operations $65,100 65,100 65,100 65,100 65,100 $325,500 194,000 $204,000 204,000 204,000 204,000 204,000 $1,020,000 $137,000 104,000 52,000 23,000 9,500 9,500 $325,500 133,000...
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