A company is considering purchase of a piece of equipment that costs £23,000. Projected net annual...
Grayson Corp. is considering the purchase of a piece of equipment that costs $29,233. Projected net annual cash flows over the project's life are:YearNet Annual Cash Flow1 $5,181216,784319,816419,675The cash payback period is _______ . Round your answer by two decimals
A company is considering the purchase of new equipment for $78,000. The projected annual net cash flows are $31,100. The machine has a useful life of 3 years and no salvage value. Management of the company requires a 9% return on investment. The present value of an annuity of $1 for various periods follows: Period Present value of an annuity of $1 at 9% 1 0.9174 2 1.7591 3 2.5313 What is the net present value of this...
Multiple Choice Question 41 Tamarisk Corp. is considering the purchase of a piece of equipment that costs $25000. Projected net annual cash flows over the project's life are: Year Net Annual Cash Flow $ 6000 13000 15000 11000 The cash payback period is 2.40 years 2.45 years 2.52 years 2.03 years
1) A company is considering the purchase of new equipment for $90,000. The projected annual net cash flows are $35,500. The machine has a useful life of 3 years and no salvage value. Management of the company requires a 8% return on investment. The present value of an annuity of $1 for various periods follows: Period Present value of an annuity of $1 at 8% 1 0.9259 2 1.7833 3 2.5771 What is the net present value of...
Fatima Corporation has the following information pertaining to the purchase of a new piece of equipment: Cash revenues less cash expenses $40,000 per year Cost of equipment Salvage value at the end of the year Increase in working capital requirements $70,000 $7,000 $30,000 Tax rate Life 30 percent 6 years Cost of capital is 11 percent. Required (use excel): a. Calculate the following assuming straight-line depreciation: i. Calculate the after-tax net income for each of the six years. ii. Calculate...
Company A is considering investing in a piece of equipment with a cost of $150,000. Annual cash flows over the 7-year useful life are projected to be $27,000. The payback period is?
Graziano Corporation (GC) is considering a project to purchase new equipment. The equipment would be depreciated by the straight-line method over its 3-year life and would have a zero-salvage value. The project requires an investment of $6,000 today on net working capital. Revenues and other operating costs are expected to be constant over the project's 3-year life. However, this project would compete with other company’s products and would reduce its pre-tax annual cash flows of $5,000 per year. The investment...
XYZ Company is considering the purchase of a new piece of equipment and has gathered the following information about the purchase: Initial investment .............. ? Annual cost savings ............. $20,000 Salvage value in 6 years ........ 20% of original cost of the equipment Repair in 4 years ............... $14,000 Cost of capital ................. 10% Life of project ................. 6 years The net present value of this new equipment was -$37,779. Calculate the salvage value for this piece of equipment.
Southport Company is considering the purchase of a piece of equipment that costs $100,000. The equipment would be depreciated on a straight-line basis to its expected salvage value of $10,000 over its 10-year useful life. Assuming a tax rate of 40%, what is the annual amount of the depreciation tax shield provided by this investment? Multiple Choice $4,000 $9,000 $3,600 None of these answers is correct.
A company is considering the purchase of a new piece of equipment for $90,000. Predicted annual cash inflows from this investment are $36,000 (year 1), $30,000 (year2), $18,000 (year 3), $12,000 (year 4) and $6,000 (year 5). The payback period is: