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Annual revenues | 220000 | |
Less: Annual expenses | 160000 | |
Net annual income | 60000 | |
Net annual income | 60000 | |
Divide by Average Investment | 500000 | =(980000+20000)/2 |
Rate of return | 12% |
Salt Company is considering investing in a new facility to extract and produce salt. The facility will increase revenues by $220,000, but it will also increase annual expenses by $160,000. The facility will cost $980,000 to build, and it will have a $20,0
Swift Oil Company is considering investing in a new oil well. It is expected that the oil well will increase annual revenues by $132,000 and will increase annual expenses by $88,000 including depreciation. The oil well will cost $427,000 and will have a $9,000 salvage value at the end of its 10-year useful life. Calculate the annual rate of return. (Round answer to 2 decimal places, e.g. 12.47.) Annual rate of return
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Wilson Corp. is considering the purchase of a new piece of equipment. The cost savings from the equipment would result in an annual increase in net income after tax of $50,000. The equipment will have an initial cost of $626,000 and have an 8 year life. The salvage value of the equipment is estimated to be $114,000. If the hurdle rate is 11%, what is the approximate net present value? i have posted this same question several times but the...