a. Calculate the terminal cash flow for a usable life of (1) 3 years, (2) 5 years, and (3) 7 years. The following table can be used to solve for the terminal cash flow: (Round to the nearest dollar.) 3-year Proceeds from sale of proposed asset +/- Tax on sale of proposed asset Total after-tax proceeds-new $ + Change in net working capital Terminal cash flow $ %24 %24 %24
Q: Given the following information regarding an income-producing property, determine the NPV using…
A: The NPV is the sum of discounted cash flows less the initial costs.
Q: A company is considering investing in one of two projects for a period of three years. Information…
A:
Q: An equipment costing P250,000 has an estimated life of 15 years with a book value of P30,000 at the…
A: N = 15 years Cost = 250,000 Book Value at end = 30,000 SLM Depreciation Method
Q: company is evaluating a proposal for purchase of equipment which will cost $180,000. The cash…
A: Introduction Payback period: It is the method of capital investment evaluation. This method counts…
Q: Given the following information regarding an income-producing property, determine the NPV using…
A: Net present value (NPV) is the value of all the cash flow of the investment (positive and negative)…
Q: An asset is purchased for 240 000 It is expected to provide an additional 56 000 of annual net cash…
A: A method of capital budgeting that helps to evaluate the present worth of cash flow and a series of…
Q: The internal rate of return method is used by Testerman Construction Co. in analyzing a capital…
A: a. At internal rate of return, the present value of cash inflows is equal to the present value of…
Q: ssuming that capital requirement for new machinery is P135,000; net of sale of present equipment –…
A: Payback period is no. of years required to recover the amount invested.
Q: A “capital investment” Tug has the following current and projected cash flows during the recovery…
A: Given information: Initial Cost : $350,000 Revenue : $150,000 Maintenance : $20,000 Tax Rate : 40%…
Q: Consider the following financial data for an investment project:• Required capital investment at n =…
A: According to the 7-year MACRS Depreciation Schedule Whole assets will be written off in the Year 8th…
Q: Consider the following after-tax cash flows: (a) Compute the project balances for Projects A and D,…
A: Cash flows are the cash and cash equivalents that flows in and out of the business in a particular…
Q: What is the capital recovery (CR) cost of the project? Assume Cash Flow First cost, S Annual cost, S…
A: In this we need to calculate the capital recovery cost of project.
Q: The amount of the estimated average income for a proposed investment of $60,000 in a fixed asset,…
A: As posted multiple independent questions we are answering only first question kindly repost the…
Q: used. If the desired after-tax return on investment is 10% per year, which de should be chosen?…
A: The net present value is the difference between the present value of cash flow and initial…
Q: An investment in equipment with a 5-year MACRS property class is being considered. The operating…
A: Here
Q: or the first 6 years and then P130,000 each year thereafter for operating expenses with interest at…
A: Present worth is present value of future cost.
Q: The management of Wyoming Corporation is considering the purchase of a new machine costing $375,000.…
A: Formulas: Profitability index = Present value of cash inflows / Cash outflow Profitability index…
Q: MNO company is evaluating a proposal for purchase of equipment which will cost S180,000. The cash…
A: Initial investment is $180,000 (Purchase cost of equipment) Year Cash inflows…
Q: Calculate the Equivalent X(4) for a project with the following cash flows: First Cost (F.C) = JD…
A: Cash Flows: Year Cash Flow Reference 0 -13000 First Cost 1 -3000 Operating Cost 2 -3000…
Q: Use this information for Wyoming Corporation to answer the questions that follow. The management…
A: Present value means when the future cash flow has been adjusted with required rate of return.…
Q: The internal rate of return method is used by Testerman Construction Co. in analyzing a capital…
A: Internal Rate of ReturnInternal Rate of Return is the return where the sum of discounted cash…
Q: For the cash flows shown and in preparation for a PW-based rate of return analysis, determine the…
A: Meaning of Incremental Cash flow Incremental cash flow is the extra operating cash flow that a…
Q: An investment of $450,000 is made in equipment that qualifies as 5-year equipment for MACRS-GDS…
A: Planning horizon is the time period for which investor will invest the amount in an investment. With…
Q: The management of Wyoming Corporation is considering the purchase of a new machine costing $375,000.…
A: Capital budgeting is a process to evaluate a project in order to make a decision whether to accept…
Q: The management of Wyoming Corporation is considering the purchase of a new machine costing $375,000.…
A: Average rate of return = Average profit / Initial investment where, Average profit = Total profit /…
Q: equipment has a useful life of five years and a residual value of $75,000. Depreciati using the…
A: Accounting rate of return can be computed using the following formula : ARR=Average net…
Q: 3. A manufacturer purchased S$200,000 worth of equipment with a useful life of 5 years and $20,000…
A: Data given:: Cost of equipment = $200,000 Useful life= 5 years Salvage value = $20,000 Rate = 6%…
Q: The following present value factors are provided for use in this problem. Periods Present Value…
A: Net present value method is used to evaluate the investment projects. We can evaluate the project by…
Q: The management of Wyoming Corporation is considering the purchase of a new machine costing $375,000.…
A: Average rate of return = Estimated Average annual income / Average investment
Q: Draw a 5-year cash flow diagram representing the following cash flows to build springs: (Chapter 2)…
A: Initial investment in plant and equipment $50K Answer:
Q: DataPoint Engineering is considering the purchase of a new piece of equipment for $200,000. It has…
A: Net present value (NPV) is a capital budgeting instrument used to measure a project's or…
Q: Harper Corporation has the following information about the purchase of a new piece of equipment:…
A: Gross profit is $50,000 per year Cost of equipment is $130,000 Salvage value at the end of the 8 th…
Q: DRAW CASH FLOW DIAGRAM A manufacturing plant installed a new boiler at a cost of P150, 000 and…
A: The net amount of cash and cash equivalents being transferred in and out of a company is referred to…
Q: The cash flows for two small raw water treatment systems are shown. Determine which should be…
A: Two small raw water treatment systems: MF UF Interest rate - 10% Selection of one on the basis of…
Q: For each of the following problems, (a) draw the cash flow diagram; (b) present clean and clear…
A: Initial Cost = 10,000 Annual Revenue = 5,000 Annual Expense = 100 Time Period (N) = 8 years Salvage…
Q: mpany project capitalized for $ 50,000 invested in depreciable assets will earn a uniform annual…
A: The income return on investment is defined as cash flows.The interest or dividends paid by a…
Q: DataPoint Engineering is considering the purchase of a new piece of equipment for $200,000. It has…
A: Note: I am supposed to provide the solution of first three subparts. Please repost the remaining…
Q: The following data are from an after-tax cash flow analysis in year 1 for anew MACRS 5-year…
A: Depreciation: It refers to a gradual decrease in the fixed asset’s value because of obsolescence,…
Q: Beyer Company Is considering the purchase of an asset for $180,000. It is expected to produce the…
A: Net Present value of the Project is the measurement of acceptance of the project. If Net present…
Q: The cash flows for two alternatives are shown. The correct equation for computing the AW of…
A: Annual worth(AW) shows the net difference between all benefits and costs which occurs in 1 year at…
Q: The following information regarding an investment project is available. Scrap Value £10,000 at…
A: The payback period is a capital budgeting technique that evaluates a capital project's liquidity…
Q: The following information is available for a potential capital investment. Initial investment…
A: Profitability index is ratio of the present value of cash flow to the initial investment of the…
Q: i do not know how to solve this problem
A: Net present value : The difference between present value of cash inflows and present value of cash…
Q: For each of the following problems, (a) draw the cash flow diagram; (b) present clean and clear…
A: a)
Q: post-back profitability inde
A: Pay back period refers to a period taken by an investment to cover the initial outlay.
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
- gnment (II) Saved Fox Co. has identified an investment project with the following cash flows. Year Cash Flow $1,290 1,240 1,590 2. 3 1,950 a. If the discount rate is 9 percent, what is the present value of these cash flows? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. What is the present value at 17 percent? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) c. What is the present value at 23 percent? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) a. Present value at 9 percent b. Present value at 17 percent C. Present value at 23 percent re to searchQuestion three For each of the following projects compute (i) pay-back period, (ii) post payback profitability and (iii) post-back profitability index Initial outlay 50,000,000 Annual cash inflow (after tax but before depreciation) Shs .10,000,000 Estimated life 8 Years Initial outlay 50,000,000 Annual cash inflow (after tax but before depreciation) First three years Shs .15,000,000 Next five years Shs. 5,000,000 Estimated life 8 Years Salvage Shs. 8,000,000The capitalized Čost A of an asset is given by A= Ao t c(t) e-** dt %3D Where A is He onginal investment t is the time in years r3 the anneal interest rate Gn decimal form) compounded Coine ously, and A) is the annual Cast of mantenance Cin dollacs) a) Find the capitalized Cust of an asset for n=5 years when A = $ 140,000 c(t) = $ 12,000 t , T:.04. %3D Cost b) Find the capitalized cosp of an asset forever cit)= $12,000 t, r:.04. Ao = $ 140,000
- Payback Period and Accounting Rate of Return: Equal Annual Operating Cash Flows with Disinvestment Minn is considering an investment proposal with the following cash flows: Initial investment-depreciable assets $227,500 Net cash inflows from operations (per year for 10 years) 32,500 Disinvestment-depreciable assets 22,750 For parts b. and c., round answers to three decimal places, if applicable. a. Determine the payback period. 7 years b. Determine the accounting rate of return on initial investment. 5.495 c. Determine the accounting rate of return on average investment. 4.902Payback Period and Accounting Rate of Return: Equal Annual Operating Cash Flows without DisinvestmentJuliana is considering an investment proposal with the following cash flows: Initial investment-depreciable assets $45,000 Net cash inflows from operations (per year for 10 years) 5,000 Disinvestment 0 For parts b. and c., round answers to three decimal places, if applicable. a. Determine the payback period. Answer years b. Determine the accounting rate of return on initial investment. Answer c. Determine the accounting rate of return on average investment. AnswerProject Y requires a $350,000 investment for new machinery with a four-year life and no salvage value. The project yields the following annual results. Cash flows occur evenly within each year. Annual Amounts Sales of new product Expenses Materials, labor, and overhead (except depreciation) Depreciation Machinery Selling, general, and administrative expenses Income Revelant Time Value of Money factors: PV $1 (8%, 4 years): PVA $1 (8%, 4 years): PVAD $1 (8%, 4 years): FV $1 (8%, 4 years): FVA $1 (8%, 4 years): FVAD $1 (8%, 4 years): 0.7350 3.3121 3.5771 1.3605 4.5061 4.8666 Project Y $350,000 157,500 87,500 49,000 $56,000
- Juliana is considering an investment proposal with the following cash flows: Initial investment-depreciable assets $55,000 Net cash inflows from operations (per year for 10 years) 11,000 Disinvestment 0 a. Determine the payback period. Round your answer to one decimal place; for example, enter 1.4 for 1.44 or 1.5 for 1.45. Answer years For parts b. and c., round your answers to three decimal places if applicable. For example, enter 0.084 for 0.0844 or 0.085 for 0.0845. b. Determine the accounting rate of return on initial investment. Answer c. Determine the accounting rate of return on average investment.Compute the payback perlod for an Investment with the following net cash flows. (Round your answer to one decimal place.) Net Cash Flows per Year Cumulative Net Cash Flows $ (101,000) $ (101,000) (90,900) (70,800) Year Initial investment 1. 2. 3. 5. 6. Payback period 10,100 20,100 20,100 26,640 40,100 40,100 years (50,700) (24,060) 16,040 56,140Q2: Find out the capitalized cost of a certain investment based on the following: 1. An initial deposit of $100,000 2. Recurring payments of $10,000 each 6 years starting by the end of the first year for infinity. 3. Annual uniform payments of $2,000 starting by the end of year 10 for infinity. Interest rate is 6%
- Calculate the future value of the following single amounts. (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use appropriate factor(s) from the tables provided. Round your answers to 2 decimal places.) Initial Investment Annual Rate Interest Compounded Period Invested Future Value 1. $7,400 10 % Annually 7 years $14,420.00 2. 5,400 12 % Semiannually 4 years 3. 8,400 8 % Quarterly 4 yearsAssume a $55,000 investment and the following cash flows for two alternatives. Year Investment A Investment B $ 15,000 $35,000 1 2 25,000 10,000 20,000 15,000 25,000 3 4 20,000 a. Calculate the payback for investment A and B. (Round your answers to 2 decimal places.) Investment A years Investment B years b. Which investment would you select under the payback method? O Investment A O Investment B c. If the inflow in the fifth year for Investment A was $20,000,000 instead of $20,000, would your answer change under the payback method? Yes O Noa) How many possible rate of returns b) If the reinvestment ratec 15%, find the composite rate of return. Year 1 Net Cash Flow -10,000 +15,000 +5,000 -7,000