1. Straight line Depreciation = (Original Value - Salvage Value)
/ Useful life
= ($483000-23000)/4 = $115000
2.
Revenues | ||
Expected Sales | $ 18,60,000 | |
Expenses | ||
Direct Material | $ 4,85,000 | |
Direct Labor | $ 6,79,000 | |
Overhead | $ 3,36,000 | |
Selling and administrative expenses | $ 1,54,000 | |
Depreciation | $ 1,15,000 | |
Total Expense | $ 17,69,000 | |
Income before taxes | $ 91,000 | |
Income tax @34% | $ 30,940 | |
Net Income | $ 60,060 | |
Expected Net Cash Flow | ||
Net Income | $ 60,060 | |
Depreciation | $ 1,15,000 | |
Expected Net Cash Flow | $ 1,75,060 |
3. Payback Period = Investment / Annual expected cash
flows
= $483000 / 175060 = 2.76 years
4. Accounting Rate of Return = Annual Net Income /
Investment
= $60060 / 483000 = 12.43%
5.
n = | 4 | |||
I = | 7% | |||
Annual Cash flow | Expected Net Cash Flow | $ 1,75,060 | 3.3875 | $ 5,93,016 |
Residual Value | Salvage Value | $ 23,000 | 0.763 | $ 17,549 |
Total PV | $ 6,10,565 | |||
Less Investment | $ 4,83,000 | |||
NPV | $ 1,27,565 |
factory Company is planning to add a new product to its line. $483,000 cost $23,000 salvage...
Factor Company is planning to add a new product to its line. To manufacture this product, the company needs to buy a new machine at a $500,000 cost with an expected four-year life and a $22,000 salvage value. All sales are for cash, and all costs are out-of-pocket. except for depreciation on the new machine. Additional information includes the following (PV of $1. FV of $1. PVA of $1, and EVA of $1 (Use appropriate factor(s) from the tables provided....
Factor Company is planning to add a new product to its line. To manufacture this product, the company needs to buy a new machine at a $660,000 cost with an expected four-year life and a $38,000 salvage value, All sales are for cash, and all costs are out-of-pocket, except for depreciation on the new machine. Additional information includes the following. (PV of $1, EV of $1, PVA of $1, and FVA of $1) (Use approprlate factor(s) from the tables provided....
Factor Company is planning to add a new product to its line. To manufacture this product, the company needs to buy a new machine at a $640,000 cost with an expected four-year life and a $36,000 salvage value. All sales are for cash, and all costs are out-of-pocket. except for depreciation on the new machine. Additional information includes the following. (PV of $1. FV of $1. PVA of S1, and FVA of $1) (Use appropriate factor(s) from the tables provided....
Factor Company is planning to add a new product to its line. To manufacture this product, the company needs to buy a new machine at a $500,000 cost with an expected four-year life and a $22,000 salvage value. All sales are for cash, and all costs are out-of-pocket, except for depreciation on the new machine. Additional information includes the following. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided....
Factor Company is planning to add a new product to its line. To manufacture this product, the company needs to buy a new machin at a $483,000 cost with an expected four-year life and a $23.000 salva except for depreciation on the new machine. Additional Information Includes the following. (PV of $1. FV of $1. PVA of $1. and FVA O $1) (Use appropriate factor(s) from the tables provided.) $1,860,000 Expected anmaal sales of new product Expected annual costs of...
Factor Company is planning to add a new product to its line. To manufacture this product, the company needs to buy a new machine at a $880,000 cost with an expected four-year life and a $60,000 salvage value. All sales are for cash, and all costs are out-of-pocket, except for depreciation on the new machine. Additional information includes the following. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided....
Factor Company is planning to add a new product to its line. To manufacture this product, the company needs to buy a new machine at a $640,000 cost with an expected four-year life and a $36,000 salvage value. All sales are for cash, and all costs are out-of-pocket, except for depreciation on the new machine. Additional information includes the following. (PV of $1. EV of $1. PVA of $1, and EVA of $1) (Use appropriate factor(s) from the tables provided....
A company is planning to add a new product to its line. To manufacture this product, the company needs to buy a new machine at a $487,000 cost with an expected four-year life and a $23,000 salvage value. All sales are for cash, and all costs are out-of-pocket, except for depreciation on the new machine. Additional information includes the following. (PV of $1, FV of $1, PVA of $1, and FVA of $1). $1,890,000 Expected annual sales of new product...
actor Company is planning to add a new product to its line. To manufacture this product, the company needs to buy a new machine $880,000 cost with an expected four-year life and a $60,000 salvage value. All sales are for cash, and all costs are out-of-pocket, xcept for depreciation on the new machine Additional information includes the following. (PV of $1.FV of $1. PVA of S1. and FVA of 1) (Use appropriate factor(s) from the tables provided. Round PV factor...
Factor Company is planning to add a new product to its line. To manufacture this product, the company needs to buy a new machine at a $640,000 cost with an expected four-year life and a $36,000 salvage value. All sales are for cash, and all costs are out-of-pocket, except for depreciation on the new machine. Additional information includes the following. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided....