A project that cost $108000 has a useful life of 5 years and a salvage value...
A project that cost $108000 has a useful life of 5 years and a salvage value of $3000. The internal rate of return is 12% and the annual rate of return is 18%. The amount of the annual net income is
$9990.
$9450.
$6660.
$6300.
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A project that cost $108000 has a useful life of 5 years and a
salvage value...
Cost of new machinery $200,000 Machinery estimated useful life 10 years Estimated salvage value $0 Straight-line...
Cost of new machinery $200,000 Machinery estimated useful life 10 years Estimated salvage value $0 Straight-line depreciation Annual labor hours reduction 10,000 Annual operating costs reduction $4,000 Average hourly labor rate $5.50 Income tax rate 40% Discount rate 10% Part 1: Calculate the annual incremental income after taxes and the annual net cash flow for each year Part 2: Calculate the payback period Part 3: Calculate the rate of return on average investment Part 4: Calculate the net present value...
A project has an annual rate of return of 15%. The project cost $220000, has a...
A project has an annual rate of return of 15%. The project cost $220000, has a 5-year useful life, and has no salvage value. Straight-line depreciation is used. The annual net income, exclusive of depreciation, is $77000. $60500. $87450. $33000.
8 percent interest Initial cost End-of-useful life salvage value 2000 1000 Useful life, in years 126...
8 percent interest
Initial cost End-of-useful life salvage value 2000 1000 Useful life, in years 126 Pump A because it has a higher EUAC 2000 Useful life, In years 12 Pump A because it has a higher EUAC Pump A because it has a lower EUAC Pump B because it has a lower EUAC An answer cannot be computed because the useful life of the pumps is not the same Pump B because it has a higher EUAC pump should...
Cardinal Company is considering a five-year project that would require a $2,915,000 investment in equipment with a useful life of five years and no salvage value.
Cardinal Company is considering a five-year project that would require a $2,915,000 investment in equipment with a useful life of five years and no salvage value. The company’s discount rate is 16%. The project would provide net operating income in each of five years as follows: Sales$2,863,000 Variable expenses1,014,000 Contribution margin1,849,000 Fixed expenses: Advertising, salaries, and other out-of-pocket costs$781,000 Depreciation583,000 Total fixed expenses1,364,000 Net operating income$485,000 (Hint: Use Microsoft Excel to calculate the discount factor(s).) Respond with workings:2-a. What are the project’s annual net cash inflows?2-b. What is the present...
A machine with a cost of $260,000 has an estimated salvage value of $20,000 and an estimated useful life of 5 years or 1...
A
machine with a cost of $260,000 has an estimated salvage value of
$20,000 and an estimated useful life of 5 years or 12000 hours. It
is to be depreciated using the units-of-activity method of
depreciation. What is amount of depreciation for the second full
year, during which the machine was used 4000 hours?
Multiple Choice Question 209 A machine with a cost of $260000 has an estimated salvage value of $20000 and depreciation for the second full year, during...
Fill in the blanks. $ Inputs: Machine Cost Estimated Salvage Value Estimated Useful Life in Years...
Fill
in the blanks.
$ Inputs: Machine Cost Estimated Salvage Value Estimated Useful Life in Years 50,000 5,000 $ Depreciation Rate Annual Depreciation Expense Accumulated Depreciation Year Carrying Value 50,000 30,000 18,000 10,800 40% 40% 40% 40% 40% $20,000 $12,000 $7,200 $20,000 32,000 39,200 b) Prepare a depreciation schedule for the following scenario if the company uses the 150% declin linnut b) Prepare a depreciation schedule for the following scenario if the company uses the 150% declining balance method. Inputs:...
machine 1: cost 76,000 salvage value 6,000 useful life 10 years purchased 7/1/16 machine 2: cost...
machine 1:
cost 76,000
salvage value 6,000
useful life 10 years
purchased 7/1/16
machine 2:
cost 80,000
salvage value 10,000
useful life 8 years
purchased 1/1/13
machine 3:
cost 78,000
salvage value 6,000
useful life 6 years = 24,000 hours
purchased 1/1/18
Problem: In recent years, Hrubeck Company purchased three machines. Because of heavy turnover in the accounting department, a different accountant was in charge of selecting the depreciation method for each machine, and various methods were selected. Information concerning...
2. Mattice Corporation is considering investing $640,000 in a project. The life of the project would be 6 years. The pr...
2.
Mattice Corporation is considering investing $640,000 in a project. The life of the project would be 6 years. The project would require additional working capital of $24,000, which would be released for use elsewhere at the end of the project. The annual net cash inflows would be $158,000. The salvage value of the assets used in the project would be $34,000. The company uses a discount rate of 18%. (lgnore income taxes.) Click here to view Exhibit 13B-1 and...
Cullumber Company is considering buying equipment for $220000 with a useful life of 5 years and...
Cullumber Company is considering buying equipment for $220000 with a useful life of 5 years and an estimated salvage value of $6000. If annual expected income is $28000, the denominator in computing the annual rate of return is $220000. $110000. $113000. $226000.
10) You buy a machine now for $10,000. The machine can be depreciated using DDB depreciation with 5 years useful life and $2,000 salvage value. Three years later you sell the machine for $1,000....
10) You buy a machine now for $10,000. The machine can be depreciated using DDB depreciation with 5 years useful life and $2,000 salvage value. Three years later you sell the machine for $1,000. The annual net benefit is $8000. The inflation rate is 5% per year. The acceptable real after-tax rate of return after taking inflation into consideration is 10%. Combined incremental tax rate is 50%. Calculate PW of this investment a) $4102 b) $3654 c) $3181 d) $2706...
8 percent interest
Initial cost End-of-useful life salvage value 2000 1000 Useful life, in years 126 Pump A because it has a higher EUAC 2000 Useful life, In years 12 Pump A because it has a higher EUAC Pump A because it has a lower EUAC Pump B because it has a lower EUAC An answer cannot be computed because the useful life of the pumps is not the same Pump B because it has a higher EUAC pump should...
A
machine with a cost of $260,000 has an estimated salvage value of
$20,000 and an estimated useful life of 5 years or 12000 hours. It
is to be depreciated using the units-of-activity method of
depreciation. What is amount of depreciation for the second full
year, during which the machine was used 4000 hours?
Multiple Choice Question 209 A machine with a cost of $260000 has an estimated salvage value of $20000 and depreciation for the second full year, during...
Fill
in the blanks.
$ Inputs: Machine Cost Estimated Salvage Value Estimated Useful Life in Years 50,000 5,000 $ Depreciation Rate Annual Depreciation Expense Accumulated Depreciation Year Carrying Value 50,000 30,000 18,000 10,800 40% 40% 40% 40% 40% $20,000 $12,000 $7,200 $20,000 32,000 39,200 b) Prepare a depreciation schedule for the following scenario if the company uses the 150% declin linnut b) Prepare a depreciation schedule for the following scenario if the company uses the 150% declining balance method. Inputs:...
machine 1:
cost 76,000
salvage value 6,000
useful life 10 years
purchased 7/1/16
machine 2:
cost 80,000
salvage value 10,000
useful life 8 years
purchased 1/1/13
machine 3:
cost 78,000
salvage value 6,000
useful life 6 years = 24,000 hours
purchased 1/1/18
Problem: In recent years, Hrubeck Company purchased three machines. Because of heavy turnover in the accounting department, a different accountant was in charge of selecting the depreciation method for each machine, and various methods were selected. Information concerning...
2.
Mattice Corporation is considering investing $640,000 in a project. The life of the project would be 6 years. The project would require additional working capital of $24,000, which would be released for use elsewhere at the end of the project. The annual net cash inflows would be $158,000. The salvage value of the assets used in the project would be $34,000. The company uses a discount rate of 18%. (lgnore income taxes.) Click here to view Exhibit 13B-1 and...
10) You buy a machine now for $10,000. The machine can be depreciated using DDB depreciation with 5 years useful life and $2,000 salvage value. Three years later you sell the machine for $1,000. The annual net benefit is $8000. The inflation rate is 5% per year. The acceptable real after-tax rate of return after taking inflation into consideration is 10%. Combined incremental tax rate is 50%. Calculate PW of this investment a) $4102 b) $3654 c) $3181 d) $2706...
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