A company is planning to purchase a machine that will cost $24,000, have a 6-year life, and have no salvage value.  The company expects to sell the machine’s output of 3,000 units evenly throughout each year. Total operating income generated over the life of the machine is estimated to be $12,000.  The machine will generate net cash inflows of $6,000 per year.  The average rate of return for the machine is 50%. Group of answer choices True False

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Q: The Comil Corporation recently purchased a new machine for its factory operations at a cost of…

A: Calculate present value factor.

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A: The average rate of return calculates the rate of return compared to the initial investment costs.…

Q: A company is planning to purchase a machine that will cost 240,000, have a six-year life, and be…

A: Answer is option d) 25%

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Q: The management of Charlton Corporation is considering the purchase of a new machine costing…

A: IRR is a rate at which NPV of the project is equal to 0 or it’s a rate at which cash inflows are…

Q: Liam Mitchell, a manager of the Plate Division for the Harvest Manufacturing company, has the…

A: Determine the acceptability of the proposal based on above calculation and if accounting rate of…

Q: A company is considering purchasing a special machine to expand one of its production lines. The…

A: Net present value is sum of present value of cash flows. In excel NPV function is used to calculate…

Q: Market Top Investors, Inc., is considering the purchase of a $345,000 computer with an economic life…

A: Computation of NPV:NPV of the project is $20,275.66. Excel spread sheet:

Q: Clapton Corporation is considering an investment in new equipment costing $750,000. The equipment…

A: Accounting Rate-of-Return (ARR) is used to measure profitability of investment proposals ignoring…

Q: Hayden Company is considering the acquisition of a machine that costs $553,000. The machine is…

A: Payback period is the time required to recover the investment.  Payback period = Initial…

Q: Heidi Company is considering the acquisition of a machine that costs $420,000. The machine is…

A: Investment required in the machine is $420,000. Amount to be recovered is $420,000. Each year an…

Q: A company with $800,000 in operating assets is considering purchasing a machine that costs $300,000…

A: Payback period: Payback period is the length of time in which an investment reaches its break-even…

Q: Alter company's manager has proposed installing equipment that will cost $36,000 have an 8 years…

A: Average annual profit = Total profit / total no. of years = $16000/4 years = $4000 Average…

Q: Billy Gaffney, a manager of the Plate Division for the Red Dog Manufacturing ​Company, has the…

A: Cost of machinery is $430000 Required after tax rate of return is 12% Net before tax inflows are…

Q: A corporation is considering purchasing a machine that will save $200,000 per year before taxes. The…

A: The net present value is the difference of the present value of cash inflows and the present value…

Q: Lukow Products is investigating the purchase of a piece of automated equipment that will save…

A: Net present value  = Present value of cash inflows  - initial  investment

Q: Alter company's manager has proposed installing an equipment that will cost $36,000, have a 8-year…

A: The average rate of return is a capital budgeting method that is determined by dividing the average…

Q: APJ, Inc. is planning to purchase a new machine that will take six years to recover the cost. The…

A: PAYBACK PERIOD = INTIAL INVESTMENT / CASH FLOW PER YEAR  SO , INITIAL INVESTMENT = CASH FLOW PER…

Q: Thurston Petroleum is considering a new project that complements its existing business. The machine…

A: Hello, since your submission includes two questions, we have solved the first question as per our…

Q: Henessy Co. is planning to buy a machine costing P84,000 to be depreciated on the straight-line…

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Q: The management of Kunkel Company is considering the purchase of a $22,000 machine that would reduce…

A: 1.

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A:

Q: Ursus, Inc., is considering a project that would have a eight-year life and would require a…

A: Note: Since we only answer up to 3 questions, we’ll answer the first 3. Please resubmit the question…

Q: The estimated cash payback period for the machine is (round to one decimal point)?

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Q: Bilk.com, an online retailing company, proposes to spend $50 million on servers and other computer…

A: given, year one sales = $30 millionyear one cost = $21 millioncost of machine = $50 millionlife =…

Q: Culver Industries is considering the purchase of new equipment costing $1,500,000 to replace…

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Q: Market Top Investors, Inc., is considering the purchase of a $350,000 computer with an economic life…

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Q: Calculate the NPV of this project.

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A:

Q: w machine costing $150,000 is expected to save the McKaig Brick Company $11,000 per year for 5 years…

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A: The terminal cashflow is known as terminal year non operating cashflow.

Q: How much will the new machine cost?

A: In the given case, the present value of annual cashflows will be equal to the cost of the machine.…

Q: Rambus Inc. would like to purchase a production machine for $325,000. The machine is expected to…

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Q: edavoy Company is considering a new project that complements its existing business. The machine…

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Q: Market Top Investors, Inc., is considering the purchase of a $345,000 computer with an economic life…

A: The net worth of the project after the deduction of the current worth of the cash outflows from the…

Q: Liam Mitchell, a manager of the Plate Division for the Harvest Manufacturing company, has the…

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Q: Lukow Products is investigating the purchase of a piece of automated equipment that will save…

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Q: Macoupin Mining Inc. must purchase a new coring machine that costs $60,000 and will last 15 years…

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Q: Pique Corporation plans to purchase a new machine for $300,000. Management estimates that with the…

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Q: Market Top Investors, Inc., is considering the purchase of a $365,000 computer with an economic life…

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Q: Hayden Company is considering the acquisition of a machine that costs $561,000. The machine is…

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Q: The estimated cash payback period f

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Q: Perkins, Inc., is considering an investment of $383,000 in an asset with an economic life of 5…

A: Cash Flows: Cash flows eliminate the impact of non-cash charges and give the true picture of the…

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.