Homework Answers
| Net Present Value | = | $ 10,302 | ||
| Workings: | ||||
| Year | Value Flows | Present Factor @14% | Present Value | |
| Initial Cost | 0 | $ -4,20,000 | 1 | $ -4,20,000 |
| Cash Inflows | 1 - 9 | $ 87,000 | 4.946 | $ 4,30,302 |
| Net Present Value | $ 10,302 | |||
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Vaughn Company has the following information about a potential capital investment: 420,000 87,000 9 years 14%...
Vaughn Company has the following information about a potential capital investment: $ $ Initial investment Annual...
Vaughn Company has the following information about a potential capital investment: $ $ Initial investment Annual cash inflow Expected life Cost of capital 450,000 77,000 9 years 9% 1. Calculate the net present value of this project. (Future Value of $1, Present Value of $1, Future Value Annuity of $1, Present Value Annuity of $1.) (Use appropriate factor(s) from the tables provided. Round the final answer to nearest whole dollar.) Net Present Value
Vaughn Company has the following information about a potential capital investment: Initial investment $ 310,000 Annual...
Vaughn Company has the following information about a potential capital investment: Initial investment $ 310,000 Annual cash inflow $ 75,000 Expected life 7 years Cost of capital 14% 1. Calculate the net present value of this project. (Future Value of $1, Present Value of $1, Future Value Annuity of $1, Present Value Annuity of $1.) (Use appropriate factor(s) from the tables provided. Round the final answer to nearest whole dollar.) Net Present Value
M11-7 Calculating Net Present Value, Predicting Internal Rate of Return [LO 11-3, 11-4] Vaughn Company has...
M11-7 Calculating Net Present Value, Predicting Internal Rate of Return [LO 11-3, 11-4] Vaughn Company has the following information about a potential capital investment: $ 520,000 83,000 Initial investment Annual cash inflow Expected life Cost of capital 10 years 9% 1. Calculate the net present value of this project. (Future Value of $1, Present Value of $1, Future Value Annuity of $1, Present Value Annuity of $1.) (Use appropriate factor(s) from the tables provided. Round the final answer to nearest...
Merrill Corp. has the following information available about a potential capital investment: Initial investment Annual net...
Merrill Corp. has the following information available about a potential capital investment: Initial investment Annual net income Expected life Salvage value Merrill's cost of capital $ 1,300,000 $ 130,000 8 years $ 140,000 10% Assume straight line depreciation method is used. Required: 1. Calculate the project's net present value. (Future Value of $1, Present Value of $1, Future Value Annuity of $1, Present Value Annuity of $1.) (Use appropriate factor(s) from the tables provided. Do not round intermediate calculations. Round...
Merrill Corp. has the following information available about a potential capital investment: Initial investment Annual net...
Merrill Corp. has the following information available about a potential capital investment: Initial investment Annual net income Expected life Salvage value Merrill's cost of capital $1,300,000 $ 130,000 8 years $ 140,000 10% Assume straight line depreciation method is used. Required: 1. Calculate the project's net present value. (Future Value of $1, Present Value of $1, Future Value Annuity of $1, Present Value Annuity of $1.) (Use appropriate factor(s) from the tables provided. Do not round intermediate calculations. Round the...
Merrill Corp. has the following information available about a potential capital investment: Initial investment Annual net...
Merrill Corp. has the following information available about a potential capital investment: Initial investment Annual net income Expected life Salvage value Merrill's cost of capital $1,200,000 $ 120,000 8 years $ 130,000 10% Assume straight line depreciation method is used. Required: 1. Calculate the project's net present value. (Future Value of $1, Present Value of $1, Future Value Annuity of $1, Present Value Annuity of $1.) (Use appropriate factor(s) from the tables provided. Do not round intermediate calculations. Round the...
Merrill Corp. has the following information available about a potential capital investment: Required 1 Required 2...
Merrill Corp. has the following information available about a potential capital investment: Required 1 Required 2 Required 3 Required 4 Initial investment Annual net income Expected life Salvage value Merrill's cost of capital $ 600,000 $ 60,000 8 years $ 70,000 7% Calculate net present value. (Future Value of $1, Present Value of $1, Future Value Annuity of $1, Present Value Annuity of $i.) (Use appropriate factor(s) from the tables provided. Cash Outflows and negative amounts should be indicated by...
Merrill Corp. has the following information available about a potential capital investment: Initial investment Annual net...
Merrill Corp. has the following information available about a potential capital investment: Initial investment Annual net income Expected life Salvage value Merrill's cost of capital $2,100,000 $ 200,000 8 years $ 210,000 10% Assume straight line depreciation method is used. Required: 1. Calculate the project's net present value. 2. Without making any calculations, determine whether the internal rate of return (IRR) is more or less than 10 percent. 3. Calculate the net present value using a 13 percent discount rate....
Merrill Corp. has the following information available about a potential capital investment Initial investment $1,eee, ee0...
Merrill Corp. has the following information available about a potential capital investment Initial investment $1,eee, ee0 $ 100,000 8 years Annual net income Expected life Salvage value Merrill's cost of capital $ 110,000 7% Assume straight line depreciation method is used. Required: 1. Calculate the project's net present value 2 Without making any calculations, determine whether the internal rate of return (IRR) is more or less than 7 percent 3. Calculate the net present value using a 14 percent discount...
Required information (The following information applies to the questions displayed below.) Falcon Crest Aces (FCA), Inc.,...
Required information (The following information applies to the questions displayed below.) Falcon Crest Aces (FCA), Inc., is considering the purchase of a small plane to use in its wing-walking demonstrations and aerial tour business. Various information about the proposed investment follows: Initial investment Useful life Salvage value Annual net income generated FCA'S Cost of capital $ 220,000 $ 10 years 25,000 $ 5,000 7% Assume straight line depreciation method is used. 2. Help FCA evaluate this project by calculating each...
Vaughn Company has the following information about a potential capital investment: $ $ Initial investment Annual cash inflow Expected life Cost of capital 450,000 77,000 9 years 9% 1. Calculate the net present value of this project. (Future Value of $1, Present Value of $1, Future Value Annuity of $1, Present Value Annuity of $1.) (Use appropriate factor(s) from the tables provided. Round the final answer to nearest whole dollar.) Net Present Value
M11-7 Calculating Net Present Value, Predicting Internal Rate of Return [LO 11-3, 11-4] Vaughn Company has the following information about a potential capital investment: $ 520,000 83,000 Initial investment Annual cash inflow Expected life Cost of capital 10 years 9% 1. Calculate the net present value of this project. (Future Value of $1, Present Value of $1, Future Value Annuity of $1, Present Value Annuity of $1.) (Use appropriate factor(s) from the tables provided. Round the final answer to nearest...
Merrill Corp. has the following information available about a potential capital investment: Initial investment Annual net income Expected life Salvage value Merrill's cost of capital $ 1,300,000 $ 130,000 8 years $ 140,000 10% Assume straight line depreciation method is used. Required: 1. Calculate the project's net present value. (Future Value of $1, Present Value of $1, Future Value Annuity of $1, Present Value Annuity of $1.) (Use appropriate factor(s) from the tables provided. Do not round intermediate calculations. Round...
Merrill Corp. has the following information available about a potential capital investment: Initial investment Annual net income Expected life Salvage value Merrill's cost of capital $1,300,000 $ 130,000 8 years $ 140,000 10% Assume straight line depreciation method is used. Required: 1. Calculate the project's net present value. (Future Value of $1, Present Value of $1, Future Value Annuity of $1, Present Value Annuity of $1.) (Use appropriate factor(s) from the tables provided. Do not round intermediate calculations. Round the...
Merrill Corp. has the following information available about a potential capital investment: Initial investment Annual net income Expected life Salvage value Merrill's cost of capital $1,200,000 $ 120,000 8 years $ 130,000 10% Assume straight line depreciation method is used. Required: 1. Calculate the project's net present value. (Future Value of $1, Present Value of $1, Future Value Annuity of $1, Present Value Annuity of $1.) (Use appropriate factor(s) from the tables provided. Do not round intermediate calculations. Round the...
Merrill Corp. has the following information available about a potential capital investment: Required 1 Required 2 Required 3 Required 4 Initial investment Annual net income Expected life Salvage value Merrill's cost of capital $ 600,000 $ 60,000 8 years $ 70,000 7% Calculate net present value. (Future Value of $1, Present Value of $1, Future Value Annuity of $1, Present Value Annuity of $i.) (Use appropriate factor(s) from the tables provided. Cash Outflows and negative amounts should be indicated by...
Merrill Corp. has the following information available about a potential capital investment: Initial investment Annual net income Expected life Salvage value Merrill's cost of capital $2,100,000 $ 200,000 8 years $ 210,000 10% Assume straight line depreciation method is used. Required: 1. Calculate the project's net present value. 2. Without making any calculations, determine whether the internal rate of return (IRR) is more or less than 10 percent. 3. Calculate the net present value using a 13 percent discount rate....
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Required information (The following information applies to the questions displayed below.) Falcon Crest Aces (FCA), Inc., is considering the purchase of a small plane to use in its wing-walking demonstrations and aerial tour business. Various information about the proposed investment follows: Initial investment Useful life Salvage value Annual net income generated FCA'S Cost of capital $ 220,000 $ 10 years 25,000 $ 5,000 7% Assume straight line depreciation method is used. 2. Help FCA evaluate this project by calculating each...
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