0 1 2 3 4 Total initial investment ($457,000) Operating Cash Flows Unit sales 250,000 250,000 250,000 250,000 Price per unit $2.50 $2.50 $2.50 $2.50 Total reve...
| 0 | 1 | 2 | 3 | 4 | |
| Total initial investment | ($457,000) | ||||
| Operating Cash Flows | |||||
| Unit sales | 250,000 | 250,000 | 250,000 | 250,000 | |
| Price per unit | $2.50 | $2.50 | $2.50 | $2.50 | |
| Total revenues | $ 625,000 | $ 625,000 | $ 625,000 | $ 625,000 | |
| Total costs | $ 236,400 | $ 186,000 | $ 312,000 | $ 345,600 | |
| Operating income | $ 388,600 | $ 439,000 | $ 313,000 | $ 279,400 | |
| Taxes on operating income | 136,010 | 153,650 | 109,550 | 97,790 | |
| After-tax operating income | $ 252,590 | $ 285,350 | $ 203,450 | $ 181,610 | |
| Operating cash flow | $ 113,990 | $ 96,350 | $ 140,450 | $ 152,210 | |
| Terminal Year Cash Flows | |||||
| Total termination cash flow | $ 53,250 | ||||
| Project Cash Flows | |||||
| Net cash flows | ($457,000) | $113,990 | $96,350 | $140,450 | $205,460 |
| Required return (used as the discount rate) | 12% | ||||
| Payback period | (2.22) | ||||
| Present value of net cash inflows | |||||
| Present value of cash outflows | |||||
| Profitability index | 0.90 | ||||
| Internal rate of return (IRR) | 7.44% | ||||
| Net present value (NPV) | ($47,870.50) |
PV of NCF and PV of CO
Homework Answers
The solution of the above is below for your perusal.
| 0 | 1 | 2 | 3 | 4 | |
| Total Initial Investment | -457000 | ||||
| Unit Sales | 250000 | 250000 | 250000 | 250000 | |
| Price Per unit | 2.5 | 2.5 | 2.5 | 2.5 | |
| Total Revenue | 625000 | 625000 | 625000 | 625000 | |
| Total Cost | 236400 | 236400 | 236400 | 236400 | |
| Operating Income | 388600 | 439000 | 313000 | 279400 | |
| Taxes on Operating Income | 136010 | 153650 | 109550 | 97790 | |
| After Tax Operating Income | 252590 | 285350 | 203450 | 181610 | |
| Operating Cash Flow | 113990 | 96350 | 140450 | 152210 | |
| Terminal Flow Cash Flow | 53250 | ||||
| Net Cash Flow | -457000 | 113990 | 96350 | 140450 | 205460 |
| PV Of Net Cash Inflows @12% | 101777 | 76810 | 99970 | 130574 | |
| PV Of Cash Outflows @12% | -457000 | ||||
| IRR | 7.44% |
The Calculation is below
Add Answer to:
0 1 2 3 4 Total initial investment ($457,000) Operating Cash Flows Unit sales 250,000 250,000 250,000 250,000 Price per unit $2.50 $2.50 $2.50 $2.50 Total reve...
Years 0 1 2 3 4 Investment Outlay Equipment cost ($350,000) Shipping and installation ($70,000) Increase in inventory ($55,000) Increase in ac...
Years 0 1 2 3 4 Investment Outlay Equipment cost ($350,000) Shipping and installation ($70,000) Increase in inventory ($55,000) Increase in accounts payable $18,000 Total initial investment ($457,000) Operating cash flow $ 113,990 $ 96,350 $ 140,450 $ 152,210 Total termination cash flow $ 53,250 Project Cash Flows Net cash flows ($457,000) $113,990 $96,350 $140,450 $205,460 Required return (used as the discount rate) 12% Payback period (2.22) Present value of net cash inflows Present value of cash outflows Profitability index...
Consider the following timeline detailing a stream of cash flows: Date 0 1 2 3 4...
Consider the following timeline detailing a stream of cash flows: Date 0 1 2 3 4 CF ? $100 $100 $200 $2000 CF = Cash Flow If the current market rate of interest is 10%, then the present value (PV) of this stream of cash flows is closest to: a. $736 b. $230 c. $460 d. $552
Page 1 of 2 Cash Flows from Operating Activities-Indirect Method The net income reported on the...
Page 1 of 2 Cash Flows from Operating Activities-Indirect Method The net income reported on the income statement for the current year was $185,000 recorded on equipment and a building amounted to $96,000 for the year. Balances of the current asset and current liability accounts at the beginning and end of the year are as follows: . Depreciation End of Year Beginning of Year Cash Accounts receivable (net) Inventories Prepaid expenses Accounts payable (merchandise creditors) Salaries payable s75,900 84,550 186,200...
Problem 11-4A Prepare a statement of cash flows-indirect method (L011-2, 11-3, 11-4, 11- The income statement,...
Problem 11-4A Prepare a statement of cash flows-indirect method (L011-2, 11-3, 11-4, 11- The income statement, balance sheets, and additional information for Video Phones, Inc., are provided. $3,386,000 VIDEO PHONES, INC. Income Statement For the Year Ended December 31, 2021 Net sales Expenses : Cost of goods sold $2,200,000 Operating expenses 998,000 Depreciation expense 32,000 Loss on sale of land 8,500 Interest expense 17,500 Income tax expense 53,000 Total expenses Net income ces 3,219,080 $ 167,000 VIDEO PHONES, INC. Balance...
Exercise 11-1 Payback period computation; uneven cash flows LO P1 Beyer Company is considering the purchase of an asset for $210,000. It is expected to produce the following net cash flows. The cash...
Exercise 11-1 Payback period computation; uneven cash flows LO P1 Beyer Company is considering the purchase of an asset for $210,000. It is expected to produce the following net cash flows. The cash flows occur evenly within each year. Year1 $64,000 $33,000 62,000 $150,000 $28,000 $337,000 Year2 Year3 Year 4 Year5 Total Net cash flows 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...
answer Comparison of Capital Budgeting Methods 1. Determine the payback period for an investment 2. Evaluate the acceptability of an investment project using the net present value method 3. Eval...
answer
Comparison of Capital Budgeting Methods 1. Determine the payback period for an investment 2. Evaluate the acceptability of an investment project using the net present value method 3. Evaluate the acceptability of an investment project using the internal rate of return method. 4. Compute the simple rate of return for an investment FILE HOME INSERT PAGE LAYOUT FORMULAS DATA REVIEW VIEW LEH Sign In в r u . B- 5- Number Formation 1 Format as Styles. Alignment Cells Editing...
A company is considering a 3-year project that requires an initial installed equipment cost of $10,000. The project engineer has estimated that the operating cash flows will be $4,000 in year 1, $6,00...
A company is considering a 3-year project that requires an initial installed equipment cost of $10,000. The project engineer has estimated that the operating cash flows will be $4,000 in year 1, $6,000 in year 2, and $8,000 in year 3. The new machine will also require a parts inventory of $3,000 at the beginning of the project (assume this inventory can be sold for cost at the end of the project). It is also estimated that the equipment can...
LO 2, 3, 4, 5 Statement of Cash Flows: Indirect Method P8. Shah Fabrics, Inc.'s comparative...
LO 2, 3, 4, 5 Statement of Cash Flows: Indirect Method P8. Shah Fabrics, Inc.'s comparative balance sheets for December 31, 2014 and 2013, follow RATIO 1 Net cash flows from operating activities $93.600 1: Net cash flows from investing Shah Fabrics, Inc. Comparative Balance Sheets December 31, 2014 and 2013 activities: (528,800 1: Net cash flows from financing activities: $204,000 2014 2013 Assets Cash $ 378,240 $ 109,440 Accounts receivable (net) 409,720 301,720 Inventory Prepaid expenses 451,560 551,560 80,000...
Complete the excel. INCOME STATEMENT 1 Sales 2 COGS 3 Depreciation expense 4 Total operating costs...
Complete the excel.
INCOME STATEMENT 1 Sales 2 COGS 3 Depreciation expense 4 Total operating costs 5 EBIT 6 Less interest 7 Earnings before taxes (EBT) 8 Taxes (40%) 11 Net Income 12 Shares of common equity 13 Dividends per share 14 Dividends to common 15 Additions to retained earnings Actual 2016 $ 7,500.00 $ 5,625.00 375.00 6,000.00 1,500.00 63.00 1,437.00 574.80 862.20 62.50 $ 2.50 $ 156.25 $ 705.95 Actual 2016 30.00 543.75 787.50 1,361.25 1,350.00 2,711.25 BALANCE SHEET...
Prepare a statement of Cash Flows using the Indirect Method. P23.7 (LO 2, 3, 4) Groupwork...
Prepare a statement of Cash Flows using the Indirect
Method.
P23.7 (LO 2, 3, 4) Groupwork (SCF-Direct and Indirect Methods from Comparative Financial Statements) Chapman Company, major retailer of bicycles and accessories, operates several stores and is a publicly traded company. The comparative balance sheet and income statement for Chapman as of May 31, 2020, are as follows. The company is preparing its statement of cash flows. 2019 $ 20,000 58,000 250,000 7,000 _335,000 502,000 Chapman Company Comparative Balance Sheet...
Page 1 of 2 Cash Flows from Operating Activities-Indirect Method The net income reported on the income statement for the current year was $185,000 recorded on equipment and a building amounted to $96,000 for the year. Balances of the current asset and current liability accounts at the beginning and end of the year are as follows: . Depreciation End of Year Beginning of Year Cash Accounts receivable (net) Inventories Prepaid expenses Accounts payable (merchandise creditors) Salaries payable s75,900 84,550 186,200...
Problem 11-4A Prepare a statement of cash flows-indirect method (L011-2, 11-3, 11-4, 11- The income statement, balance sheets, and additional information for Video Phones, Inc., are provided. $3,386,000 VIDEO PHONES, INC. Income Statement For the Year Ended December 31, 2021 Net sales Expenses : Cost of goods sold $2,200,000 Operating expenses 998,000 Depreciation expense 32,000 Loss on sale of land 8,500 Interest expense 17,500 Income tax expense 53,000 Total expenses Net income ces 3,219,080 $ 167,000 VIDEO PHONES, INC. Balance...
Exercise 11-1 Payback period computation; uneven cash flows LO P1 Beyer Company is considering the purchase of an asset for $210,000. It is expected to produce the following net cash flows. The cash flows occur evenly within each year. Year1 $64,000 $33,000 62,000 $150,000 $28,000 $337,000 Year2 Year3 Year 4 Year5 Total Net cash flows 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...
answer
Comparison of Capital Budgeting Methods 1. Determine the payback period for an investment 2. Evaluate the acceptability of an investment project using the net present value method 3. Evaluate the acceptability of an investment project using the internal rate of return method. 4. Compute the simple rate of return for an investment FILE HOME INSERT PAGE LAYOUT FORMULAS DATA REVIEW VIEW LEH Sign In в r u . B- 5- Number Formation 1 Format as Styles. Alignment Cells Editing...
LO 2, 3, 4, 5 Statement of Cash Flows: Indirect Method P8. Shah Fabrics, Inc.'s comparative balance sheets for December 31, 2014 and 2013, follow RATIO 1 Net cash flows from operating activities $93.600 1: Net cash flows from investing Shah Fabrics, Inc. Comparative Balance Sheets December 31, 2014 and 2013 activities: (528,800 1: Net cash flows from financing activities: $204,000 2014 2013 Assets Cash $ 378,240 $ 109,440 Accounts receivable (net) 409,720 301,720 Inventory Prepaid expenses 451,560 551,560 80,000...
Complete the excel.
INCOME STATEMENT 1 Sales 2 COGS 3 Depreciation expense 4 Total operating costs 5 EBIT 6 Less interest 7 Earnings before taxes (EBT) 8 Taxes (40%) 11 Net Income 12 Shares of common equity 13 Dividends per share 14 Dividends to common 15 Additions to retained earnings Actual 2016 $ 7,500.00 $ 5,625.00 375.00 6,000.00 1,500.00 63.00 1,437.00 574.80 862.20 62.50 $ 2.50 $ 156.25 $ 705.95 Actual 2016 30.00 543.75 787.50 1,361.25 1,350.00 2,711.25 BALANCE SHEET...
Prepare a statement of Cash Flows using the Indirect
Method.
P23.7 (LO 2, 3, 4) Groupwork (SCF-Direct and Indirect Methods from Comparative Financial Statements) Chapman Company, major retailer of bicycles and accessories, operates several stores and is a publicly traded company. The comparative balance sheet and income statement for Chapman as of May 31, 2020, are as follows. The company is preparing its statement of cash flows. 2019 $ 20,000 58,000 250,000 7,000 _335,000 502,000 Chapman Company Comparative Balance Sheet...
Most questions answered within 3 hours.
-
Assume Kw = 1.01 ✕ 10−14
For pure water, we can calculate [H3O+ ] = [OH...
asked 41 minutes ago -
Suppose that on a temperature scale X, water boils at 203.0°X
and freezes at -105.7°X. What...
asked 1 hour ago -
BaS crystallizes in a cubic unit cell with S2- ions on each
corner and each face....
asked 2 hours ago -
A. 0≤P(Oi)≤10≤P(Oi)≤1 for each i
B. P(Oi)≤0P(Oi)≤0
C. P(Oi)=1+P(OCi)P(Oi)=1+P(OiC)
D. P(Oi)≥1P(Oi)≥1
If an experiment consists of...
asked 3 hours ago -
A battery has an emf of 9.20V and an internal resistance of 1.20
ohm. a)What resistance...
asked 3 hours ago -
The area of an elastic circular loop decreases at a constant
rate, dA/dt = −6.60×10−3 m2/s...
asked 4 hours ago -
The denaturation of proteins can be described by the
equilibrium
F⇌U
where F and U represent...
asked 6 hours ago -
Please answer what the maximum and minimum force is, and the
angle on the ion is...
asked 6 hours ago -
implement a program that reads a number of rows and a symbol.
The program will draw...
asked 6 hours ago -
Assume that when adults with smartphones are randomly selected,
45% use them in meetings or classes....
asked 6 hours ago -
Determine the number of formula units of
Na2SO4 and moles of oxygen contained in 8.11
moles...
asked 6 hours ago -
Explain in steps on the following code
What would be the output when executed
using System;...
asked 6 hours ago