None The following present value factors are provided for use in this problem.Present ValuePresent Value of anPeriods1of $1 at 8%Annuity of $1 at 8%0.92590.925920.85731.783330.79382.577140.73503.3121Xavier Company wants to purchase an asset for $36,800 with a four-year life and a $1,000 salvage value. Xavier requires an 8%return on investment. The expected year-end net cash flows are $11,800 in each of the four years. What is the machine's netpresent value (round to the nearest whole dollar)?Multiple ChoiceО$2,283.О$3,018.О$(3,018).$(2,283).О$39,818.

Step 1: Introduction to capital budgetingCapital budgeting refers to the process of analyzing…

Answered: The following present value factors are…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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The following present value factors are provided for use in this problem. Periods Present Value of $1 at 8% Present Value of an Annuity of $1 at 8% 1 0.9259 0.9259 2 0.8573 1.7833 3 0.7938 2.5771 4 0.7350 3.3121 Xavier Company wants to purchase an asset for $37,000 with a four-year life and a $1,000 salvage value. Xavier requires an 8% return on investment. The expected year - end net cash flows are $12,000 in each of the four years. What is the machine's net present value (round to the nearest whole dollar)?
The following information is available to use in deciding whether to purchase the new backhoes or old backhoes. Using the 8% Present Value of an Annuity of 1. Old Backhoes New Backhoes Purchase cost when new $90,000 $200,000 Salvage value now $42,000 Investment in major overhaul needed in next year $55,000 Salvage value in 8 years $15,000 $90,000 Remaining life 8 years 8 years Net cash flow generated each year $30,425 $43,900 Answers that Bartebly provided is down below. My Question: Can you provide in detail what the pay back period is for the Old and New Backhoes. For the calculations that are already presented. Thank you Meaning of Profitability Index :- Profitability Index is a capital budgeting tool used to rank projects on the basis of their profitability. It is calculated by dividing the present value of all cash inflows by the initial investment. Projects with higher profitability index are…
A P1, 500, 000.00 equipment has an estimated life of 20 years with a book value of P 250, 000.00 at the end of the period. What is the depreciation charge and its book value after 10 years using the sinking fund method? i= 8% Given: Required: Solution: refer to this textbook: https://drive.google.com/file/d/16J6M6RHBZ22NDaog_9DSXMgYb4qFu7T3/view?usp=sharing
Determine the capitalized cost of an alternative that has a first cost of $55,000 an annual maintenance cost of $12,000 and a salvage value of $8,000 after its 6-year life. Use an interest rate of 8% per year. 56895 185699 285088
Determine the capitalized cost of a large-format printer that has a first cost of P1.20 million and a salvage value after five useful years equal to P600,000. The operation has a maintenance cost of P100,000 every after 3 years. Use interest rate, i = 10% O P3.31 M O P 2.28 M P 2.36 M O P 3.26 M
The following table summarizes the financial data for a proposed new asset. The issue is how long the asset should be kept. Assume an interest rate of 12% and delermine the economic service life of the anset. End of YearN) Investment cost O&M Cost Salvage value $14,000 $3.400 $8.000 $4600 $6.000 $5.800 $4,000 01 year O2 years 3 years O Not enough information
Capitalized cost is an application of perpetuity. It is the sum of the first cost and the present worth of all future payments and replacements. A machine costs P300,000 new, and must be replaced at the end of each 15 years. If the annual maintenance required is P5,000, find the capitalized cost, if money is worth 5% and the salvage value is P50,000. First Cost 300000 Present worth of the annual maintenance cost *Letters only Perpetuity of the depreciation cost Capitalized cost a. 178,700 b. 231,700 c. 321,500 d. 400,500 e. 127,700 a. 372,700 b. 441,700 c. 529,500 d. 609,500 e. 631,700
An asset with a purchase price of $486,966 falls in the 5-year MACRS asset class. The asset will be sold at the end of a three year project for $153,883. What is the book value of the asset at the end of the project? Round your answer to the nearest dollar. Year Depreciable Allowance 1 20% 32 19 12 11 6. 6. 4-
An equipment cost P60,000 today and its salvage value is P20,000 after 6 years. Calculate its depreciation at year 2 with 3.45% interest rate.Use Sinking Fund Method
An asset has the estimated salvage values for various lives, shown in the table below. For each possible life from 1 to 6 by 1, determine the capital recovery cost for MARR of 8%/year. EOY 0 1 2 3 4 5 6 NCF -$150,000 $30,000 $30,000 $30,000 $30,000 $30,000 $30,000 Estimated SV $150,000 $130,000 $110,000 $100,000 $90,000 $85,000 $82,000 Capital recovery cost with 1-year life $ Capital recovery cost with 2 years life $ Capital recovery cost with 3 years life $ Capital recovery cost with 4 years life $ Capital recovery cost with 5 years life $ Capital recovery cost with 6 years life $ Carry all interim calculations to 5 decimal places and then round your final answer to the nearest dollar. The tolerance is ±50.
DT Lid, provides you the following information 1.Purchase price of machine Rs. 190000 2.Installation purchase Rs.10000 3.Useful life of machine 3 years. 4.Salvage value at the end of useful life nil 5 5.Tax rate 30% 6.Cost of capital 10% 7.Cash flows before depreciation and tax 100000 p.a. Required: Calculate the Discounted payback period.
A company is considering two alternatives with regards to equipment which it needs. The alternatives are as follows: Alternative A: Purchase Cost of Equipment 703,668700,000 Salvage Value 100,454100,000 Daily operating cost 501500 Economic life, years 10 Alternative B: Rental at 1,5751,500 per day. At 18% interest, how many days per year must the equipment be in use if Alternative A is to be chosen.

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