Annual cash flows | 45800 | |
X PV factor | 5.75902 | =(1-(1.10)^-9)/0.10 |
Present value of Annual cash flows | 263763 | |
Less: Investment cost | 249453 | |
Original estimate net present value | 14310 | |
Annual cash flows | 39200 | |
X PV factor | 6.49506 | =(1-(1.10)^-11)/0.10 |
Present value of Annual cash flows | 254606 | |
Less: Investment cost | 260336 | |
Revised estimate net present value | -5730 |
your answer is partially correct. Try again. Quillen Company is performing a post-audit of a project completed one...
Partially correct answer. Your answer is partially correct. Try again. Quillen Company is performing a post-audit of a project completed one year ago. The initial estimates were that the project would cost $255,000, would have a useful life of 9 years, zero salvage value, and would result in net annual cash flows of $43,000 per year. Now that the investment has been in operation for 1 year, revised figures indicate that it actually cost $261,000, will have a total useful...
Quillen Company is performing a post-audit of a project completed one year ago. The initial estimates were that the project would cost $244,230, would have a useful life of 9 years, zero salvage value, and would result in net annual cash flows of $46,700 per year. Now that the investment has been in operation for 1 year, revised figures indicate that it actually cost $228,895, will have a total useful life of 11 years, and will produce net annual cash...
Quillen Company is performing a post-audit of a project completed one year ago. The initial estimates were that the project would cost $227,000, would have a useful life of 9 years, zero salvage value, and would result in net annual cash flows of $43,700 per year. Now that the investment has been in operation for 1 year, revised figures indicate that it actually cost $231,000, will have a total useful life of 11 years (including the year just completed), and...
Quillen Company is performing a post-audit of a project completed one year ago. The initial estimates were that the project would cost $224,000, would have a useful life of 9 years, zero salvage value, and would result in net annual cash flows of $44,900 per year. Now that the investment has been in operation for 1 year, revised figures indicate that it actually cost $228,000, will have a total useful life of 11 years (including the year just completed), and...
Brief Exercise 27-06 Quillen Company is performing a post-audit of a project completed one year ago. The initial estimates were that the project would cost $244,000, would have a useful life of 9 years, zero salvage value, and would result in net annual cash flows of $46,600 per year. Now that the investment has been in operation for 1 year, revised figures indicate that it actually cost $256,000, will have a total useful life of 11 years (including the year...
Brief Exercise 26-6 Quillen Company is performing a post-audit of a project completed one year ago. The initial estimates were that the project would cost $224,418, would have a useful life of 9 years, zero salvage value, and would result in net annual cash flows of $44,900 per year. Now that the investment has been in operation for 1 year, revised figures indicate that it actually cost $227,644, will have a total useful life of 11 years, and will produce...
Do It Review 26-2 Your answer is partially correct. Try again. Wayne Company is considering a long-term investment project called ZIP. ZIP will require an investment of $129,984. It will have a useful life of 4 years and no salvage value. Annual cash inflows would increase by $80,600, and annual cash outflows would increase by $38,300. The company's required rate of return is 11%. Click here to view PV table. Calculate the net present value on this project. (If the...
Brief Exercise 24-3 Your answer is partially correct. Try again. Thunder Corporation, an amusement park, is considering a capital investment in a new exhibit. The exhibit would cost $150,425 and have an estimated useful life of 9 years. It will be sold for $69,600 at that time. (Amusement parks need to rotate exhibits to keep people interested.) It is expected to increase net annual cash flows by $20,300. The company's borrowing rate is 8%. Its cost of capital is 10%....
Your answer is partially correct. Try again. BAK Corp. is considering purchasing one of two new diagnostic machines. Either machine would make it possible for the company to bid on jobs that it currently isn’t equipped to do. Estimates regarding each machine are provided below. Machine A Machine B Original cost $74,500 $183,000 Estimated life 8 years 8 years Salvage value 0 0 Estimated annual cash inflows $20,300 $40,200 Estimated annual cash outflows $5,100 $9,810 Click here to view PV...
Exercise 24-4 Partially correct answer. Your answer is partially correct. Try again. BAK Corp. is considering purchasing one of two new diagnostic machines. Either machine would make it possible for the company to bid on jobs that it currently isn’t equipped to do. Estimates regarding each machine are provided below. Machine A Machine B Original cost $76,900 $186,000 Estimated life 8 years 8 years Salvage value 0 0 Estimated annual cash inflows $19,600 $39,800 Estimated annual cash outflows $5,150 $10,080...