A small company pays 30% in income taxes. A $2000 machine with a four-year life and zero salvage value will generate revenues of $1200 annually. Using 8%, compare the present worth of the after-tax profits using single line and sum-of-the-years digits depreciation.

Q: A company is planning to purchase a machine that will cost $54,000 with a six-year life and no…

A: Payback period refers to the time period that is required to recover the initial cost. With the help…

Q: A machine has an initial cost of $30,000, labor annual cost of $37,000, maintenance annual cost of…

A:

Q: A company is considering the purchase of a new machine for $59,000. Management predicts that the…

A: Financial Management: Financial management comprises of two words i.e. Finance and management.…

Q: A corporation expects to receive $32,000 each year for 15 years from the sale of a product. There…

A: Rate of return is the annual income in percentage earned from an investment.

Q: Telstar Communications is going to purchase an asset for $600,000 that will produce $290.000 per…

A: Modified Accelerated cost recovery system (MACRS) is a method of calculating depreciation on an…

Q: What is the payback period for the new machine

A: Payback Period: It is the period in which the initial outlay of an investment or equipment is…

Q: Harper Corporation has the following information about the purchase of a new piece of equipment:…

A: Given Cash revenues less cash expenses $50,000  per year Cost of equipment $130,000 Salvage value at…

Q: A machine costs 100,000 and is subject to a depreciation rate of 25 percent under the WDV method.…

A: In WDV is written down value method in which depreciation is more in the initial years.

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%

Q: Antonio, Inc., has invested in new production equipment at a cost of $24,000. The equipment has an…

A: The payback period (PBP) is the amount of time that is expected to recover the investment costs…

Q: A Company plans on an expansion project that would initially cost $750,000 and a salvage value of…

A: A) Yearly Total Cash flows   Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8…

Q: Macaron Corporation is making a $96,400 investment in equipment with a 5-year life. The company uses…

A: Lets understand the basics. Depreciation is a reduction in value of asset due to wear and tear…

Q: A company is planning to purchase a machine that will cost P240,000, have a six-year life, and be…

A: Net income = P 30000 n = 6 years Initial cost (I) = P 240000 Let r = Rate of return

Q: Build Corporation wants to purchase a new machine for $287,000. Management predicts that the machine…

A: Payback Period:  The payback period of an investment is the length of time required for the…

Q: A local delivery company has purchased a delivery truck for $15,000. The truck will be depreciated…

A: MACRS is Modified Accelerated Cost Recovery System which is the tax depreciation system where…

Q: Build Corporation wants to purchase a new machine for $295,000. Management predicts that the machine…

A: NPV is the difference between present value of all cash inflows and initial investment NPV =PV of…

Q: A subsidiary of AEP places in service electric generating and transmission equipment at a cost of…

A: Present value is the concept that states an amount of money today is worth more than that same…

Q: Northern Inc. purchases an asset for​ $150,000. This asset qualifies as a five−year recovery asset…

A: Solution:- Calculation of cash flow from​ disposal as follows under:-

Q: Pebble Co. recently sold a used machine for P40,000. The machine had a book value of P60,000 at the…

A: Tax is financial charge or levy imposed by the government of the country to make government…

Q: A company is planning to spend P60,000 for a machine which will be depreciated on a straight-line…

A: Introduction: The accounting rate of return (ARR), a capital budgeting metric, is used to determine…

Q: XYZ Company plans to invest $1 million in a new plant which is expected to produce a uniform annual…

A: Net Present Value: It is the difference  between the current worth of money inflows  and outflows…

Q: Peng Company is considering an investment expected to generate an average net income after taxes of…

A: Calculate annual average investment: Annual average investment = (Initial investment + salvage…

Q: Build Corporation wants to purchase a new machine for $318,000. Management predicts that the machine…

A: The payback period refers to the time by which the project starts to return positive cash flows. In…

Q: A subsidiary of AEP places in service electric generating and transmission equipment at a cost of…

A: PW is the current worth of cash flows that are expected to occur in the future.

Q: Pique Corporation wants to purchase a new machine for $290,000. Management predicts that the machine…

A: Formula for calculation Net Present Value is:

Q: Hammer Corporation wants to purchase a new machine for $387,000. Management predicts that the…

A: NPV=Pv of net cash flows Depreciation each year=(3870000-50000)/5=67400 Net cash flows each…

Q: 23,300 in labour costs, and will be useful for 9 years. Suppose that for tax purposes, the lathe…

A: Net present value is the difference between present value of cash flow and initial investment.

Q: Harper Corporation recently sold a used machine for $50,000. The machine had a book value of $75,000…

A: The Loss or Gain on a machine is computed by comparing the purchase price to its Netbook value. A…

Q: An asset with 5-year MACRS life will be purchased for $12,000. It will produce net annual benefits…

A: Rate of return refers to the income from the investment annually expressed in a form of a…

Q: A company buys a machine for $180,000 that has an expected life of nine years and no salvage value.…

A: Accounting rate of return: Accounting rate of return takes the average accounting profit the…

Q: A company with $630,000 in operating assets is considering the purchase of a machine that costs…

A: The aim of every investors will be to earn profits from the investment. The investment will fetch…

Q: Build Corporation wants to purchase a new machine for $298,000. Management predicts that the machine…

A: Net after-tax cash inflow is the amount which represents the cash received by an entity during a…

Q: A special power tool for plastic products costs $400,000 and has a 4year useful life, no salvage…

A: Rate of return A net profit/loss of the investment over the specified period is denoted in terms of…

Q: A firm has invested $60,000 in machinery with a 5-year useful life. The machinery will have no…

A: Given information: Initial investment amount is $60,000 Annual benefits amounted to $15,000 for 5…

Q: Yejen Industries Ltd. invested $10,000,000 in manufacturing equipment for producing small…

A: Investment = 10,000,000 Interest Rate = 15% Time Period = 7 years

Q: A corporation expects to receive $32,000 each year for 15 years from the sale of a product. There…

A: Purpose of every investment is to get return. Return means extra amount received over the invested…

Q: A company with $795,000 in operating assets is considering the purchase of a machine that costs…

A: Payback period = Machine initial cost/Annual reduction in cost

Q: New equipment costing $30,000 has a 5-year life and no salvage value. Benefits are expected to be…

A: Tax rate is defined as the percentage rate at which the tax amount is computed. The rate varies…

Q: What is the depreciation using straight line deprectiation over 12 years, what is the revenue earned…

A: Note: Present value of Detroit engine warranty given is incorrect. Present value of Detroit engine…

Q: A highly specialized piece of equipment has a first cost of $50,000. If this equipment is purchased,…

A: Capital budgeting is the selecting methods of financing long-term project.

Q: Denver Company buys a machine for $65,000 that has an expected life of 4 years and no salvage value.…

A: Answer:   9.54%

Q: Beam Company, which is planning to spend P135,000 for a new machine, to be depreciated on a straight…

A: Payback period is the number of periods within which the investment on a project can be recovered in…

Q: K.T. Labs bought a Gene gun for $25,000.The accounting department has estimated that themachine…

A: Salvage value is the amount that an asset is estimated to be worth at the end of its useful life. It…

Q: Build Corporation wants to purchase a new machine for $298,000. Management predicts that the machine…

A: Computation of annual cash inflows from investments. Sales 215000 Less: Cost -80000 Less:…

Q: A company buys a machine for $180,000 that has an expected life of nine years and no salvage value.…

A: A company buys a machine = $180000 Life of machine = 9 years Salvage value = NIL Annual net income…

Q: Hammer Corporation wants to purchase a new machine for $284,000. Management predicts that the…

A: Net present value = Present value of annual  cash inflows + Present value of salvage  value  -…