Blue Spruce Co. purchased some equipment 3 years ago. The company's required rate of return is...
Blue Spruce Co. purchased some equipment 3 years ago. The
company's required rate of return is 12%, and the net present value
of the project was $(1200). Annual cost savings were: $14000 for
year 1; 12000 for year 2; and $10000 for year 3. The amount of the
initial investment was
| Present Value | PV of an Annuity | |
| Year | of 1 at 12% | of 1 at 12% |
| 1 | 0.893 | 0.893 |
| 2 | 0.797 | 1.690 |
| 3 | 0.712 | 2.402 |
$30386.
$27624.
$30024.
$27986.
Homework Answers
rate positively ..
| Computation of intial investment | ||||
| Initial investment = | ||||
| 14000*0.893+12000*0.797+10000*0.712+1200 | ||||
| 30386 | ||||
| Ans = | 30386 |
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Blue Spruce Co. purchased some equipment 3 years ago. The
company's required rate of return is...
--/10 Question 7 View Policies Current Attempt in Progress Marigold Co. purchased some equipment 3 years...
--/10 Question 7 View Policies Current Attempt in Progress Marigold Co. purchased some equipment 3 years ago. The company's required rate of return is 12%, and the net present value of the project was $(900). Annual cost savings were: $7000 for year 1:5000 for year 2; and $3000 for year 3. The amount of the initial investment was Year Present Value of 1 at 12% 0.893 0.797 0.712 PV of an Annuity of 1 at 12% 0.893 1.690 2.402 $11472...
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...
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...
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...
Below is a table for the present value of $1 at Compound interest. Year 6% 10%...
Below is a table for the 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 Below is a table for the 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 3 2.673 2.487 2.402 4 3.465 3.170 3.037 5 4.212 3.791 3.605 Using the tables...
1) Using the present value tables above, determine the net present value of Project A over a four-year life salvage val...
1) Using the present value tables above, determine the net
present value of Project A over a four-year life salvage value
assuming a minimum rate of return of 12%. Round answer to two
decimal places.
2) Which Project provides the greatest net present value?
-Project A or Project B
Project A requires an original investment of 551,600. The project will yield cash flows of $14,200 per year for seven years. Project B has a calculated net present value of $2,960...
Project A requires an original investment of $47,100. The project will yield cash flows of $13,200...
Project A requires an original investment of $47,100. The project will yield cash flows of $13,200 per year for seven years. Project B has a calculated net present value of $1,840 over a four year life. Project A could be sold at the end of four years for a price of $14,100. Below is a table for the 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...
Use these present value tables to answer the question that follow. Below is a table for...
Use these present value tables to answer the question that follow. Below is a table for the 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 Below is a table for the 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 3 2.673 2.487 2.402...
Project A requires an original investment of $53,800. The project will yield cash flows of $15,600...
Project A requires an original investment of $53,800. The project will yield cash flows of $15,600 per year for 4 years. Project B has a computed net present value of $4,050 over a 4-year life. Project A could be sold at the end of 4 years for a price of $15,500. Following is a table for the 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...
Below is a table for the present value of $1 at compound interest. Year 6% 10%...
Below is a table for the 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 Below is a table for the 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 3 2.673 2.487 2.402 4 3.465 3.170 3.037 5 4.212 3.791 3.605 Using the tables...
--/10 Question 7 View Policies Current Attempt in Progress Marigold Co. purchased some equipment 3 years ago. The company's required rate of return is 12%, and the net present value of the project was $(900). Annual cost savings were: $7000 for year 1:5000 for year 2; and $3000 for year 3. The amount of the initial investment was Year Present Value of 1 at 12% 0.893 0.797 0.712 PV of an Annuity of 1 at 12% 0.893 1.690 2.402 $11472...
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...
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...
1) Using the present value tables above, determine the net
present value of Project A over a four-year life salvage value
assuming a minimum rate of return of 12%. Round answer to two
decimal places.
2) Which Project provides the greatest net present value?
-Project A or Project B
Project A requires an original investment of 551,600. The project will yield cash flows of $14,200 per year for seven years. Project B has a calculated net present value of $2,960...
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