Homework Answers
| Answer 1: | |||
| Cost of games | = | $3,00,000 | |
| Usefull Life | = | 8 Years | |
| Salvage Value | = | $20,000 | |
| Net Operating Income | = | $40,000 | |
| Add: Depreciation | = | $35,000 | |
| Cash Flows | $75,000 | ||
| Payback Period | = | Total Cost / Cash Flows | |
| = | 300000/75000 | ||
| = | 4 | Years | |
| There is Payback period of 4 Years then Nick Novelties will purchase the games. | |||
| Answer 2: | |||
| Let Take Rate of Return 10% | |||
| Pv of Cash Flows | = | PV(rate,nper,pmt) | |
| PV(0.1,8,-75000) | |||
| $4,00,119 | |||
| Pv of Salvage | = | 20000*(1/1.10)^8 | |
| $9,330 | |||
| Total PV | = | $4,09,450 | |
| Let Take Rate of return 16% | |||
| Pv of Cash Flows | = | PV(rate,nper,pmt) | |
| PV(0.16,8,-75000) | |||
| $3,25,769 | |||
| Pv of Salvage | = | 20000*(1/1.16)^8 | |
| $6,101 | |||
| Total PV | = | $3,31,870 | |
| PV | Rates | ||
| $4,09,450 | 10% | ||
| $3,31,870 | 16% | ||
| $77,580 | 6% | ||
| $31,870 | ? | ||
| = | 31870/77580*6% | ||
| = | 2.46% | ||
| IRR | = | 16% +2.46% | |
| = | 18.46% |
Add Answer to:
EXERCISE 7-8 Payback Period and Simple Rate of Return L07-1, L07-6 Nick's Novelties, Inc., is considering...
Required information Exercise 12-8 Payback Period and Simple Rate of Return (L012-1, LO12-6) [The following information...
Required information Exercise 12-8 Payback Period and Simple Rate of Return (L012-1, LO12-6) [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 $385,000, have a fifteen-year useful life, and have a total salvage value of $38,500. The company estimates that annual revenues and expenses associated with the games would be as follows: $280,000 Revenues Less operating...
Required information Exercise 13-8 Payback period and Simple Rate of Return (LO13-1, LO13-6) [The following information...
Required information Exercise 13-8 Payback period and Simple Rate of Return (LO13-1, LO13-6) [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 $175,000, have a fifteen-year useful life, and have a total salvage value of $17,500. The company estimates that annual revenues and expenses associated with the games would be as follows: $200,000 Revenues Less operating...
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 Exercise 12-8 Payback Period and Simple Rate of Return [LO12-1, LO12-6] [The following information...
Required information Exercise 12-8 Payback Period and Simple Rate of Return [LO12-1, LO12-6] [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 $350,000, have a fifteen-year useful life, and have a total salvage value of $35,000. The company estimates that annual revenues and expenses associated with the games would be as follows: Revenues $ 220,000 Less...
Required information Exercise 12-8 Payback Period and Simple Rate of Return [LO12-1, LO12-6] [The following information...
Required information Exercise 12-8 Payback Period and Simple Rate of Return [LO12-1, LO12-6] [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 $350,000, have a fifteen-year useful life, and have a total salvage value of $35,000. The company estimates that annual revenues and expenses associated with the games would be as follows: Revenues $ 220,000 Less...
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 Exercise 12-8 Payback Period and Simple Rate of Return (LO12-1, LO12-6) [The following information...
Required information Exercise 12-8 Payback Period and Simple Rate of Return (LO12-1, LO12-6) [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 $385,000, have a fifteen-year useful life, and have a total salvage value of $38,500. The company estimates that annual revenues and expenses associated with the games would be as follows: $280,000 Revenues Less operating...
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...
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...
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...
Required information Exercise 12-8 Payback Period and Simple Rate of Return (L012-1, LO12-6) [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 $385,000, have a fifteen-year useful life, and have a total salvage value of $38,500. The company estimates that annual revenues and expenses associated with the games would be as follows: $280,000 Revenues Less operating...
Required information Exercise 13-8 Payback period and Simple Rate of Return (LO13-1, LO13-6) [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 $175,000, have a fifteen-year useful life, and have a total salvage value of $17,500. The company estimates that annual revenues and expenses associated with the games would be as follows: $200,000 Revenues Less operating...
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...
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 Exercise 12-8 Payback Period and Simple Rate of Return (LO12-1, LO12-6) [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 $385,000, have a fifteen-year useful life, and have a total salvage value of $38,500. The company estimates that annual revenues and expenses associated with the games would be as follows: $280,000 Revenues Less operating...
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...
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...
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...
Most questions answered within 3 hours.
-
Assume memory access is 10 units of time and disk access is
10000 units of time....
asked 12 minutes ago -
1. Are all good samples random?
2. Magazines often report surveys giving statistics such as “63%...
asked 33 minutes ago -
Under all the various types of market structures, firms
must eventually earn some economic profits for...
asked 20 minutes ago -
Consider the following fitness regime for a single locus trait
with two co-dominant alleles: w11 =...
asked 24 minutes ago -
A large cable company reports the following.
80% of its customers subscribe to its cable TV...
asked 40 minutes ago -
Please answer the question in brief.
Discuss the role of ERP in organizations. Are ERP tools...
asked 26 minutes ago -
Discuss the pros and cons of collaborative software such
as SameTime. Does it increase productivity? What...
asked 38 minutes ago -
Buying your in-laws a gift because it’s expected is
due to the ____________ motive of gift-giving....
asked 41 minutes ago -
Calculate the expected value, the variance, and the standard
deviation of the given random variable X....
asked 1 hour ago -
A hospital performs 100 surgeries per week. The probability that
complications after surgery occur is 10%....
asked 1 hour ago -
1 point) Given the significance level α=0.01 find the following:
(a) left-tailed z value z= (b)...
asked 1 hour ago -
Assuming you are the head of the software development unit at
Cyber.Soft, explain and justify why...
asked 48 minutes ago