Homework Answers
rate positively ..
| i | ii | iii=i*ii | |||||||||||
| Year | Cash flow | PVIF @ 12% | present value | ||||||||||
| 1 | 62000 | 0.893 | 55366 | ||||||||||
| 2 | 48000 | 0.797 | 38256 | ||||||||||
| 3 | 36000 | 0.712 | 25632 | ||||||||||
| 4 | 24000 | 0.636 | 15264 | ||||||||||
| 134518 | |||||||||||||
| Ans a) | present value of net cash flow= | 134518 | |||||||||||
| amount to be invested | 110300 | ||||||||||||
| Net present value | 24218 | ||||||||||||
| ans b) | YES, because the net present value indicates that the return on the proposal is GREATER than the minimum desired rate of return 12% | ||||||||||||
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Chapter 11-Homework eBook Show Me How Calculator Print Item Net Present Value Method The following data...
Net Present Value Method The following data are accumulated by Paxton Company in evaluating the purchase...
Net Present Value Method The following data are accumulated by Paxton Company in evaluating the purchase of $106,400 of equipment, having a four-year useful life: Net Income Net Cash Flow Year 1 Year 2 Year 3 Year 4 $35,000 $60,000 22,000 46,000 11,000 35,000 (1,000) 23,000 Present Value of $1 at Compound Interest 6% 10% 12% 15% 20% 0.943 0.9090.893 0.870 0.833 0.890 0.826 0.797 0.756 0.694 0.840 0.751 0.712 0.658 0.579 0.792 0.683 0.636 0.572 0.482 0.747 0.621 0.567...
eBook Calculator Print Item Net Present Value Method, Present Value Index, and Analysis for a service...
eBook Calculator Print Item Net Present Value Method, Present Value Index, and Analysis for a service company Continental Rallroad Company is evaluating three capital Investment proposals by using the net present value method. Relevant data related to the proposals are summarized as follows: Maintenance Ramp Computer Equipment Facilities Network Amount to be invested $804,847 $463,438 $242,702 Annual net cash flows: Year 1 392,000 263,000 176,000 Year 2 365,000 237,000 121,000 Year 3 333,000 210,000 88,000 Year 1 Present Value of...
Net Present Value Method The following data are accumulated by Geddes Company in evaluating the purchase...
Net Present Value Method The following data are accumulated by Geddes Company in evaluating the purchase of $105,000 of equipment, having a four-year useful life: Net Income Net Cash Flow Year 1 $31,000 $52,000 Year 2 19,000 40,000 Year 3 9,000 30,000 Year 4 (1,000) 20,000 Present Value of $1 at Compound Interest Year 6% 10% 12% 15% 20% 1 0.943 0.909 0.893 0.870 0.833 2 0.890 0.826 0.797 0.756 0.694 3 0.840 0.751 0.712 0.658 0.579 4 0.792 0.683...
Net Present Value Method The following data are accumulated by Geddes Company in evaluating the purchase...
Net Present Value Method The following data are accumulated by Geddes Company in evaluating the purchase of $130,600 of equipment, having a four-year useful life: Net Income Net Cash Flow Year 1 $30,000 $50,000 Year 2 18,000 39,000 Year 3 9,000 29,000 Year 4 (1,000) 20,000 Present Value of $1 at Compound Interest Year 6% 10% 12% 15% 20% 1 0.943 0.909 0.893 0.870 0.833 2 0.890 0.826 0.797 0.756 0.694 3 0.840 0.751 0.712 0.658 0.579 4 0.792 0.683...
Net Present Value Method The following data are accumulated by Geddes Company in evaluating the purchase...
Net Present Value Method The following data are accumulated by Geddes Company in evaluating the purchase of $161,000 of equipment, having a four-year useful life: Net Income Net Cash Flow Year 1 $35,000 $59,000 Year 2 21,000 45,000 Year 3 10,000 34,000 Year 4 (1,000) 23,000 Present Value of $1 at Compound Interest Year 6% 10% 12% 15% 20% 1 0.943 0.909 0.893 0.870 0.833 2 0.890 0.826 0.797 0.756 0.694 3 0.840 0.751 0.712 0.658 0.579 4 0.792 0.683...
Net Present Value Method The following data are accumulated by Paxton Company in evaluating the purchase...
Net Present Value Method The following data are accumulated by Paxton Company in evaluating the purchase of $119,700 of equipment, having a four-year useful life: Net Income Net Cash Flow Year 1 $38,000 $65,000 Year 2 24,000 50,000 Year 3 11,000 38,000 Year 4 (1,000) 25,000 Present Value of $1 at Compound Interest Year 10% 6% 12% 15% 20% 0.943 0.870 0.833 0.909 0.893 1 0.756 0.694 0.797 0.826 2 0.890 0.658 0.579 0.751 0.712 0.840 0.482 0.572 0.792 0.683...
Net Present Value Method The following data are accumulated by Paxton Company in evaluating the purchase...
Net Present Value Method The following data are accumulated by Paxton Company in evaluating the purchase of $134,100 of equipment, having a four-year useful life: Net Income Net Cash Flow Year 1 $36,000 $61,000 Year 2 22,000 47,000 Year 3 11,000 35,000 Year 4 (1,000) 24,000 Present Value of $1 at Compound Interest Year 6% 10% 12% 15% 20% 1 0.9430 .909 0.893 0.870 0.833 0.890 0.826 0.797 0.756 0.694 0.840 0.751 0.712 0.658 0.579 0.792 0.683 0.636 0.572 0.482...
Net Present Value Method The following data are accumulated by Geddes Company in evaluating the purchase...
Net Present Value Method The following data are accumulated by Geddes Company in evaluating the purchase of $89,500 of equipment, having a four-year useful life: Net Income Net Cash Flow Year 1 $30,000 $50,000 Year 2 18,000 39,000 Year 3 9,000 29,000 Year 4 (1,000) 20,000 Present Value of $1 at Compound Interest Year 6% 10% 12% 15% 20% 1 0.943 0.909 0.893 0.870 0.833 2 0.890 0.826 0.797 0.756 0.694 3 0.840 0.751 0.712 0.658 0.579 4 0.792 0.683...
Net Present Value Method The following data are accumulated by Geddes Company in evaluating the purchase...
Net Present Value Method The following data are accumulated by Geddes Company in evaluating the purchase of $206,000 of equipment, having a four-year useful life: Net Income Net Cash Flow Year 1 $44,000 $75,000 Year 2 27,000 58,000 Year 3 13,000 44,000 Year 4 (1,000) 29,000 Present Value of $1 at Compound Interest Year 6% 10% 12% 15% 20% 1 0.943 0.909 0.893 0.870 0.833 2 0.890 0.826 0.797 0.756 0.694 3 0.840 0.751 0.712 0.658 0.579 4 0.792 0.683...
Net Present Value Method The following data are accumulated by Geddes Company in evaluating the purchase...
Net Present Value Method The following data are accumulated by Geddes Company in evaluating the purchase of $102,900 of equipment, having a four-year useful life: Net Income Net Cash Flow Year 1 $33,000 $56,000 Year 2 20,000 43,000 Year 3 10,000 32,000 Year 4 (1,000) 22,000 Present Value of $1 at Compound Interest Year 6% 10% 12% 15% 20% 1 0.943 0.909 0.893 0.870 0.833 2 0.890 0.826 0.797 0.756 0.694 3 0.840 0.751 0.712 0.658 0.579 4 0.792 0.683...
Net Present Value Method The following data are accumulated by Paxton Company in evaluating the purchase of $106,400 of equipment, having a four-year useful life: Net Income Net Cash Flow Year 1 Year 2 Year 3 Year 4 $35,000 $60,000 22,000 46,000 11,000 35,000 (1,000) 23,000 Present Value of $1 at Compound Interest 6% 10% 12% 15% 20% 0.943 0.9090.893 0.870 0.833 0.890 0.826 0.797 0.756 0.694 0.840 0.751 0.712 0.658 0.579 0.792 0.683 0.636 0.572 0.482 0.747 0.621 0.567...
eBook Calculator Print Item Net Present Value Method, Present Value Index, and Analysis for a service company Continental Rallroad Company is evaluating three capital Investment proposals by using the net present value method. Relevant data related to the proposals are summarized as follows: Maintenance Ramp Computer Equipment Facilities Network Amount to be invested $804,847 $463,438 $242,702 Annual net cash flows: Year 1 392,000 263,000 176,000 Year 2 365,000 237,000 121,000 Year 3 333,000 210,000 88,000 Year 1 Present Value of...
Net Present Value Method The following data are accumulated by Paxton Company in evaluating the purchase of $119,700 of equipment, having a four-year useful life: Net Income Net Cash Flow Year 1 $38,000 $65,000 Year 2 24,000 50,000 Year 3 11,000 38,000 Year 4 (1,000) 25,000 Present Value of $1 at Compound Interest Year 10% 6% 12% 15% 20% 0.943 0.870 0.833 0.909 0.893 1 0.756 0.694 0.797 0.826 2 0.890 0.658 0.579 0.751 0.712 0.840 0.482 0.572 0.792 0.683...
Net Present Value Method The following data are accumulated by Paxton Company in evaluating the purchase of $134,100 of equipment, having a four-year useful life: Net Income Net Cash Flow Year 1 $36,000 $61,000 Year 2 22,000 47,000 Year 3 11,000 35,000 Year 4 (1,000) 24,000 Present Value of $1 at Compound Interest Year 6% 10% 12% 15% 20% 1 0.9430 .909 0.893 0.870 0.833 0.890 0.826 0.797 0.756 0.694 0.840 0.751 0.712 0.658 0.579 0.792 0.683 0.636 0.572 0.482...
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