A project has an initial cost of $ 128,325 and an estimated recovery value of $ 27,550 at the end of 25 years. Average annual income is $ 36,900. The estimated average annual expenditures for everything except income tax are $ 19,063. The estimated average annual expenses for income tax are $ 7,820. Assuming that the annual income and disbursements are uniform in all 25 years. Calculate the rate of return.

Q: Determine the average rate of return for a project that is estimated to yield total income of…

A: 1. Formula for average rate of return is = Average annual income or profit/ Initial investment2. To…

Q: what is the projects equivalent annual cost, or EAC?

A:

Q: A project has estimated to cost $54,035. and provide annual net cash flows of $12,000 for 8 years.…

A: The provided information are: Initial cost estimated = $54,035 Annual net cash flow = $12,000 Term =…

Q: Consider a capital expenditure project with an expected 10-year economic life and forecasted…

A: The question is based on the concept of Free Cashflows.

Q: A capital budgeting project is expected to generate an increase to annual operating cash flow of…

A: According to capital budgeting process, different projects are evaluated for the purpose of adding…

Q: What is the project's payback period? Round your answer to two decimal places.  years

A: Payback Period: It is the period in which the project or investment returns its initial cost.  A…

Q: A company expects the material cost of a certain manufacturing operation to be $20,000 per year. At…

A: This is the concept of time value of money. Present Worth is the present value of the future…

Q: cost of a project is $50,000 and it generates cash inflows of $20,000, over four years. Calculate…

A: Payback period is the no. of years required to recover the initial amount invested.

Q: A project that provides annual cash flows of $11,200 for 20 years costs $175,000 today. What is the…

A: The profitability index can be calculated as the ratio of present value of cash inflows and initial…

Q: onsider the following project. Costs: $100,000, at time t = 0. $45,000, at time t = 4. Income: Three…

A: The question is based on the concept of calculating the future value of cash flows in a project at…

Q: A project with a useful life of eight years requires an investment of $200,000 and yields after tax…

A: Income after tax = $ 30,000 Investment = $ 200,000

Q: Consider the following financial data for a project: (a) What is the i* for this project?…

A: Formula to calculate i from the project is: i = Average annual profit/Average investment

Q: Thompson's has determined that a new project has expected fixed costs of $132,378, a contribution…

A: The point where total revenues are equal to total expenses incurred from production is called the…

Q: Assume the following facts:• A project will cost $45,000 to develop.• When the system becomes…

A: NPV: Net present value (NPV) is the method to evaluate the project feasibility. This method…

Q: Assume the following facts:• A project will cost $45,000 to develop.• When the system becomes…

A: Computation:

Q: A project in NU will cost $200,000 for planning. and $40,000 in cach of the next six years. It is…

A: The time worth of cash draws from the possibility that levelheaded financial backers like to get…

Q: The following problem is designed to be solved by spreadsheet. Maintenance costs for a new facility…

A: Present value is the current worth of an amount of money in future. The future amount is…

Q: A project produces annual net income of $15,250, $18,700, and $21,750 over three years,…

A: The average accounting rate of return is calculated as ratio of average income over life of project…

Q: The Mansford Co. Evaluates projects using payback.  Suppose that a project requiring an outlay of…

A: Payback Period = Years before full recovery + (unrecovered cost at the start of the year/ cashflow…

Q: Determine the average rate of return for a project that is estimated to yield total income of…

A: Average rate of return = Average annual income / Initial investment where, Average annual income =…

Q: A project in NU will cost $200,000 for planning and $40,000 in each of the next six years. It is…

A: Cost of project = $200,000 Revenue = $40,000  Additional revenue = $20,000 and decline by $4,000

Q: A four-year life project has an initial capital expenditure of $3,000 and annual operating costs…

A: Escalation rate of income is 5% Escalation rate of costs is 6% Inflation rate is 3% Initial Capital…

Q: How to solve this problem? The year-end operating and maintenance costs of a certain machine are…

A: Equivalent Annual Cost (EAC) : It is a capital budgeting method, it is used where only annual cost…

Q: average rate of return for a project

A: Average annual income Total income/Number of years Total income $386,400 Number of years 4…

Q: Average rate of return Determine the average rate of return for a project that is estimated to yield…

A: The average rate of return is calculated as estimated average annual income divided by average…

Q: A project has estimated to cost $64,025. and provide annual net cash flows of $15,000 for 6 years.…

A: Given: Initial cost estimated = $64,025 Annual net cash flow = $15,000 Term = 6 years

Q: A project with an initial cost of $65,700 is expected to generate annual cash flows of $17,570 for…

A: The internal rate of return (IRR) is a capital budgeting metric used to gauge the benefit of…

Q: An investment project will involve spending $270,000 at the beginning of the project and $450,000 at…

A: Net present value is the sum of present value of cash flows of the project. Present value of cash…

Q: Determine the average rate of return for a project that is estimated to yield total income of…

A: Average rate of return for the project means how much actual net income is generated by investing…

Q: Determine the average rate of return for a project that is estimated to yield total income of…

A: 1. Compute the estimated average annual income: Estimated average annual income=$484,4404…

Q: Determine the average rate of return for a project that is estimated to yield total income of…

A: Annaul income = Total income / Total years = $356,400/4 years = $89,100 Residual value = Operating…

Q: Determine the Total Capital cost of a facility project with initial infrastructure cost of…

A: Present value Concept: The money having today has greater value than receivable in future.

Q: An investment project will involve spending $300,000 at time zero and $450,000 at the end of year…

A: One of the important elements that are required to be continued to evaluate by the management is the…

Q: A project requires an initial investment of $322,990 and its expected life is 7 years. Net operating…

A: Annual cash inflow = Net operating income + depreciation = $28100 + 42270 = $70,370

Q: A company is considering a small project that requires an immediate investment of £120,000. Net…

A: Excel Spreadsheet:

Q: A project has an initial cost of $35,000 and produces cash flows of $20,000, $15,000, $10,000, and…

A: Net Present Value is the difference between the current value of cash inflow and cash outflow for a…

Q: A project produces annual net incomes of $300, $400, and $500 over the three years of its life,…

A: The formula for calculation of average accounting rate of return(ARR) is ARR =Average accounting…

Q: Olinick Corporation is considering a project that would require an investment of $289,000 and would…

A: Payback period is the period during which the initial investment in the project will be recovered…

Q: Determine the average rate of return for a project that is estimated to yield total income of…

A: Calculate the average net income as follows: Average net income = Total income / Number of years…

Q: Determine the average rate of return for a project that is estimated to yield total income of…

A: Step 1 Average rate of return (ARR) is a return that  reflects the percentage rate of return…

Q: A project will cost $45,000 to develop. When the system becomes operational after a one-year…

A: Payback period is the period which is generally expressed in years or months at which the total…