If an asset costs $144000 and is expected to have a $24000 salvage value at the...
If an asset costs $144000 and is expected to have a $24000 salvage value at the end of its 10-year life, and generates annual net cash inflows of $24000 each year, the cash payback period is
6 years.
4 years.
7 years.
5 years.
Homework Answers
| Cash payback period = Asset cost / Annual net cash inflows = 144000 / 24000 = | 6 | years |
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If an asset costs $144000 and is expected to have a $24000
salvage value at the...
If an asset costs $180000 and is expected to have a $60000 salvage value at the...
If an asset costs $180000 and is expected to have a $60000 salvage value at the end of its 10-year life, and generates annual net cash inflows of $60000 each year, the cash payback period is
3. An asset costs $10,000 and is expected to have $1,000 salvage value at the end...
3. An asset costs $10,000 and is expected to have $1,000 salvage value at the end of 5 years. Determine (10 points) Total depreciation of the asset at the end of 3 years using Sum-of- the-years-digit method. a. b. (10 points) Its value at the end of second year using Sum-of-the-years-digit.
13. A company is considering purchasing a machine that costs $344000 and is estimated to have...
13. A company is considering purchasing a machine that costs $344000 and is estimated to have no salvage value at the end of its 8-year useful life. If the machine is purchased, annual revenues are expected to be $100000 and annual operating expenses exclusive of depreciation expense are expected to be $38000. The straight-line method of depreciation would be used. If the machine is purchased, the annual rate of return expected on this machine is 36.04%. 11.05%. 5.52%. 18.02%. 14....
Beyer Company is considering the purchase of an asset for $400,000. It is expected to produce the following net...
Beyer Company is considering the purchase of an asset for $400,000. It is expected to produce the following net cash flows. The cash flows occur evenly within each year Year 1 $80,000 Year 3 $70,e0e Year 2 Year 4 Year 5 Total $445,000 $200,000 Net cash flows $80,000 $15,e00 Compute the payback period for this investment. (Cumulative net cash outflows must be entered with a minus sign. Round your Payback Period answer to 2 decimal place.) Cumulative Net Cash Inflow...
O'Malley Inc. purchased an asset costing $90,000. Annual operating cash inflows are expected to be $20,000...
O'Malley Inc. purchased an asset costing $90,000. Annual operating cash inflows are expected to be $20,000 each year for six years. No salvage value is expected at the end of the asset's life. Assuming O'Malley's cost of capital is 16 percent, what is the asset's net present value? (ignore income taxes) $(16,306) $30,000 $(5,600) $4,800
A company is considering purchasing a machine that costs $240000 and is estimated to have no...
A company is considering purchasing a machine that costs $240000 and is estimated to have no salvage value at the end of its 8-year useful life. If the machine is purchased, annual revenues are expected to be $70000 and annual operating expenses exclusive of depreciation expense are expected to be $32000. The straight-line method of depreciation would be used. The cash payback period on the machine is 7.3 years. 6.3 years. 3.6 years.
A company is considering purchasing a machine that costs $520000 and is estimated to have no...
A company is considering purchasing a machine that costs $520000 and is estimated to have no salvage value at the end of its 8-year useful life. If the machine is purchased, annual revenues are expected to be $210000 and annual operating expenses exclusive of depreciation expense are expected to be $40000. The straight-line method of depreciation would be used. The cash payback period on the machine is 8.0 years. 4.1 years. 3.1 years. 2.0 years.
factory Company is planning to add a new product to its line. $483,000 cost $23,000 salvage...
factory Company is planning to add a new product to its line.
$483,000 cost $23,000 salvage
Factor Company is planning to add a new product to its line. To manufacture this product, the company needs to buy a new machine ta $183,000 cost with an expected four year life and a $23,000 salvage value. All sales are for cash, and all costs are out-of-pocket except for depreciation on the new machine. Additional information includes the following (PV of $1. FV...
A B capital investment 50000 65000 annual expenses 9000 8000 annual revenues 22000 24000 salvage value...
A B capital investment 50000 65000 annual expenses 9000 8000 annual revenues 22000 24000 salvage value 13000 20000 useful life 8 year 8 year A_ Calculate the payback period of each alternative and decide the best alternative without taking into account the time value of the money B- Use conventional benefit cost ratio analysis to define which alternative should be selected. C-Use modified benefit cost ratio to define which alternative should be selected (MARR %10)
Problem 10-7 Calculating Salvage Value [LO1] Consider an asset that costs $595,000 and is depreciated straight-line...
Problem 10-7 Calculating Salvage Value [LO1] Consider an asset that costs $595,000 and is depreciated straight-line to zero over its seven-year tax life. The asset is to be used in a five-year project; at the end of the project, the asset can be sold for $180,000. If the relevant tax rate is 34 percent, what is the aftertax cash flow from the sale of this asset? Aftertax salvage value
3. An asset costs $10,000 and is expected to have $1,000 salvage value at the end of 5 years. Determine (10 points) Total depreciation of the asset at the end of 3 years using Sum-of- the-years-digit method. a. b. (10 points) Its value at the end of second year using Sum-of-the-years-digit.
Beyer Company is considering the purchase of an asset for $400,000. It is expected to produce the following net cash flows. The cash flows occur evenly within each year Year 1 $80,000 Year 3 $70,e0e Year 2 Year 4 Year 5 Total $445,000 $200,000 Net cash flows $80,000 $15,e00 Compute the payback period for this investment. (Cumulative net cash outflows must be entered with a minus sign. Round your Payback Period answer to 2 decimal place.) Cumulative Net Cash Inflow...
O'Malley Inc. purchased an asset costing $90,000. Annual operating cash inflows are expected to be $20,000 each year for six years. No salvage value is expected at the end of the asset's life. Assuming O'Malley's cost of capital is 16 percent, what is the asset's net present value? (ignore income taxes) $(16,306) $30,000 $(5,600) $4,800
factory Company is planning to add a new product to its line.
$483,000 cost $23,000 salvage
Factor Company is planning to add a new product to its line. To manufacture this product, the company needs to buy a new machine ta $183,000 cost with an expected four year life and a $23,000 salvage value. All sales are for cash, and all costs are out-of-pocket except for depreciation on the new machine. Additional information includes the following (PV of $1. FV...
Problem 10-7 Calculating Salvage Value [LO1] Consider an asset that costs $595,000 and is depreciated straight-line to zero over its seven-year tax life. The asset is to be used in a five-year project; at the end of the project, the asset can be sold for $180,000. If the relevant tax rate is 34 percent, what is the aftertax cash flow from the sale of this asset? Aftertax salvage value
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