Homework Answers
1a.
| Payback Period | |||||
| Choose Numerator: | / | Choose Denominator: | = | Payback Period | |
| Investment required | / | Annual net cash inflow | = | Payback Period | |
| 300000 | / | 60000 | = | 5 | years |
Annual net cash inflow = Net operating income + Depreciation = $42000 + $18000 = $60000
Depreciation being a non-cash expense, is added back to the net operating income to arrive at the annual net cash inflow.
2a.
| Simple rate of return | 15.6% |
Simple rate of return = Net operating income/(Investment required - Salvage value) = $42000/($300000 - $30000) = $42000/$270000 = 15.55 = 15.6%
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L me ollowing :normation applies to tre questions displayed below. Nick's Novelties, Inc., is considering the...
Required information [The following information applies to the questions displayed below.) Nick's Novelties, Inc.,...
Required information [The following information applies to the questions displayed below.) Nick's Novelties, Inc., is considering the purchase of new electronic games to place in its amusement houses. The games would cost a total of $592,000, have a fifteen-year useful life, and have a total salvage value of $59,200. The company estimates that annual revenues and expenses associated with the games would be as follows: $300,000 Revenues Less operating expenses: Commissions to amusement houses Insurance Depreciation Maintenance Net operating income...
Check my work Nick's Novelties, Inc., is considering the purchase of new electronic games to place...
Check my work Nick's Novelties, Inc., is considering the purchase of new electronic games to place in its amusement houses. The games would cost a total of $392,000, have a fifteen-year useful life, and have a total salvage value of $39,200. The company estimates that annual revenues and expenses associated with the games would be as follows: Part 1 of 2 $300,000 Revenues Less operating expenses: Commissions to amusement houses Insurance Depreciation Maintenance Net operating income $90,000 72,000 23,520 40,000...
Required information The following information applies to the questions displayed below,] Nick's Novelties, Inc., Is considering...
Required information The following information applies to the questions displayed below,] Nick's Novelties, Inc., Is considering the purchase of new electronic games to place in its amusement houses. The games would cost a total of $325,000, have a fifteen-year useful life, and have a total salvage value of $32,500. The company estimates that annual revenues and expenses associated with the games would be as follows: Revenues $220,000 Less operating expenses Commissions to amusement houses $60,000 55,000 19,500 40,000 Insurance Depreciation...
Check my work Nick's Novelties, Inc., is considering the purchase of new electronic games to place...
Check my work Nick's Novelties, Inc., is considering the purchase of new electronic games to place in its amusement houses. The games would cost a total of $392,000, have a fifteen-year useful life, and have a total salvage value of $39,200. The company estimates that annual revenues and expenses associated with the games would be as follows: Part 2 of 2 $300,000 10 Revenues Less operating expenses: Commissions to amusement houses Insurance Depreciation Maintenance Net operating income $90,000 72,000 23,520...
Required information [The following information applies to the questions displayed below.] Nick's Novelties, Inc., is considering...
Required information [The following information applies to the questions displayed below.] Nick's Novelties, Inc., is considering the purchase of new electronic games to place in its amusement houses. The games would cost a total of $332,000, have a fifteen-year useful life, and have a total salvage value of $33,200. The company estimates that annual revenues and expenses associated with the games would be as follows: $ 280,000 Revenues Less operating expenses: Commissions to amusement cona houses Insurance 57,000 Depreciation 19,920...
EXERCISE 7-8 Payback Period and Simple Rate of Return L07-1, L07-6 Nick's Novelties, Inc., is considering...
EXERCISE 7-8 Payback Period and Simple Rate of Return L07-1, L07-6 Nick's Novelties, Inc., is considering the purchase of new electronic games to place in its amuse. ment houses. The games would cost a total of $300,000, have an eight-year useful life, and have a total salvage value of $20,000. The company estimates that annual revenues and expenses associ. ated with the games would be as follows: $200,000 Revenues Less operating expenses: Commissions to amusement houses. Insurance Depreciation.. Maintenance Net...
Nick’s Novelties, Inc., is considering the purchase of new electronic games to place in its amusement...
Nick’s Novelties, Inc., is considering the purchase of new electronic games to place in its amusement houses. The games would cost a total of $380,000, have a fifteen-year useful life, and have a total salvage value of $38,000. The company estimates that annual revenues and expenses associated with the games would be as follows: Revenues $ 300,000 Less operating expenses: Commissions to amusement houses $ 60,000 Insurance 65,000 Depreciation 22,800 Maintenance 80,000 227,800 Net operating income $ 72,200 Garrison 16e...
[The following information applies to the questions displayed below.) Nick's Novelties, Inc., is considering the purchase...
[The following information applies to the questions displayed below.) Nick's Novelties, Inc., is considering the purchase of new electronic games to place in its amusement houses. The games would cost a total of $672,000, have an eight-year useful life, and have a total salvage value of $67,200. The company estimates that annual revenues and expenses associated with the games would be as follows: $260,000 Revenues Less operating expenses: Commissions to amusement houses Insurance Depreciation Maintenance $90,000 36,000 75,600 50,000 251,600...
Part 1 of 2 Required information [The following information applies to the questions displayed below.] 20...
Part 1 of 2 Required information [The following information applies to the questions displayed below.] 20 Nick's Novelties, Inc., is considering the purchase of new electronic games to place in its amusement houses. The games would cost a total of $332,000, have a fifteen-year useful life, and have a total salvage value of $33,200. The company estimates that annual revenues and expenses associated with the games would be as follows: points $ 280,000 eBook Hint Revenues Less operating expenses: Commissions...
Nick’s Novelties, Inc., is considering the purchase of new electronic games to place in its amusement...
Nick’s Novelties, Inc., is considering the purchase of new electronic games to place in its amusement houses. The games would cost a total of $332,000, have a fifteen-year useful life, and have a total salvage value of $33,200. The company estimates that annual revenues and expenses associated with the games would be as follows: Revenues $ 280,000 Less operating expenses: Commissions to amusement houses $ 80,000 Insurance 57,000 Depreciation 19,920 Maintenance 60,000 216,920 Net operating income $ 63,080 Garrison 16e...
Required information [The following information applies to the questions displayed below.) Nick's Novelties, Inc., is considering the purchase of new electronic games to place in its amusement houses. The games would cost a total of $592,000, have a fifteen-year useful life, and have a total salvage value of $59,200. The company estimates that annual revenues and expenses associated with the games would be as follows: $300,000 Revenues Less operating expenses: Commissions to amusement houses Insurance Depreciation Maintenance Net operating income...
Check my work Nick's Novelties, Inc., is considering the purchase of new electronic games to place in its amusement houses. The games would cost a total of $392,000, have a fifteen-year useful life, and have a total salvage value of $39,200. The company estimates that annual revenues and expenses associated with the games would be as follows: Part 1 of 2 $300,000 Revenues Less operating expenses: Commissions to amusement houses Insurance Depreciation Maintenance Net operating income $90,000 72,000 23,520 40,000...
Required information The following information applies to the questions displayed below,] Nick's Novelties, Inc., Is considering the purchase of new electronic games to place in its amusement houses. The games would cost a total of $325,000, have a fifteen-year useful life, and have a total salvage value of $32,500. The company estimates that annual revenues and expenses associated with the games would be as follows: Revenues $220,000 Less operating expenses Commissions to amusement houses $60,000 55,000 19,500 40,000 Insurance Depreciation...
Check my work Nick's Novelties, Inc., is considering the purchase of new electronic games to place in its amusement houses. The games would cost a total of $392,000, have a fifteen-year useful life, and have a total salvage value of $39,200. The company estimates that annual revenues and expenses associated with the games would be as follows: Part 2 of 2 $300,000 10 Revenues Less operating expenses: Commissions to amusement houses Insurance Depreciation Maintenance Net operating income $90,000 72,000 23,520...
Required information [The following information applies to the questions displayed below.] Nick's Novelties, Inc., is considering the purchase of new electronic games to place in its amusement houses. The games would cost a total of $332,000, have a fifteen-year useful life, and have a total salvage value of $33,200. The company estimates that annual revenues and expenses associated with the games would be as follows: $ 280,000 Revenues Less operating expenses: Commissions to amusement cona houses Insurance 57,000 Depreciation 19,920...
EXERCISE 7-8 Payback Period and Simple Rate of Return L07-1, L07-6 Nick's Novelties, Inc., is considering the purchase of new electronic games to place in its amuse. ment houses. The games would cost a total of $300,000, have an eight-year useful life, and have a total salvage value of $20,000. The company estimates that annual revenues and expenses associ. ated with the games would be as follows: $200,000 Revenues Less operating expenses: Commissions to amusement houses. Insurance Depreciation.. Maintenance Net...
[The following information applies to the questions displayed below.) Nick's Novelties, Inc., is considering the purchase of new electronic games to place in its amusement houses. The games would cost a total of $672,000, have an eight-year useful life, and have a total salvage value of $67,200. The company estimates that annual revenues and expenses associated with the games would be as follows: $260,000 Revenues Less operating expenses: Commissions to amusement houses Insurance Depreciation Maintenance $90,000 36,000 75,600 50,000 251,600...
Part 1 of 2 Required information [The following information applies to the questions displayed below.] 20 Nick's Novelties, Inc., is considering the purchase of new electronic games to place in its amusement houses. The games would cost a total of $332,000, have a fifteen-year useful life, and have a total salvage value of $33,200. The company estimates that annual revenues and expenses associated with the games would be as follows: points $ 280,000 eBook Hint Revenues Less operating expenses: Commissions...
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