Question

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Question 15 2 pts Elsie Moving Company is considering purchasing new equipment that costs $726,000. Its management estimates that the equipment will generate cash flows as follows: 3 Year 1 $202,000 2 202,000 264,000 264.000 5 160,000 The company's required rate of return is 10%. Using the factors in the table below, calculate the present value of the cash inflows. (Round all calculations to the nearest whole dollar.) 4 Present value of $1: 7% 8% 9% 10% ܝܕ 0.926 0.917 0.909 6% 0.943 0.890 0.840 0.792 0.935 0.873 0.857 0.842 0.8261 N 3 0.816 0.794 0.772 0.751 4 0.763 0.735 0.708 0.683 0.621 un 0.747 0.713 0.681 0.650 O $797,481 0 $793,414 O $808,971 $828,406

Answer 1

Question 15

OPTION D

Year 1 Year 2 Year 3 Year 4 Year 5 rate@10% 202000 0.909 202000 0.826 264000 0.751 264000 0.683 160000 0.621 183618 166852 198264 180312 99360 Total Present Value 828406 828406

QUESTION 23

OPTION A : Planning how to invest in long term assets

REASON: Capital Budgeting is the most important aspect of Financial managment in which proepr decision making is respect of Investment of long term funds

QUESTION 24

OPTION D : Process of planning for investments in long term assets

REASON: The complications of capital budgeting decisions extend to longer period in future.The consequence of one wrong decision will have a disaster survival in future

Qyestion 26

OPTION C : The purchase price of the old equipment compared to the purchase price of the new equipment

REASON : In case of upgrade of the equipment , only efficiency and other features realted to output and productivity are checked. The purchase price of upgrade is always above the price of old