accounting rate of return
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A: Net Present Value=(Present Value of Cash Inflows-Present Value of Cash Outflows)
Q: A new machine costs $160 000, has a useful life of 10 years, and can be sold for $15 000 at the end…
A: Note: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question…
Q: Vandezande Inc. is considering the acquisition of a new machine that costs $461,000 and has a useful…
A: Cumulative cash flows Year 1 =Cash inflow-Initial inventment=$149,000-$461,000=-$312,000
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: Lovewell Limited a food manufacturer is considering purchasing a new machine for £275,000. The…
A: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question and…
Q: a company can buy a machine that is expected to have a three-year life and a 30,000 salvage value.…
A: Net Present Value: It is the present worth today of the project having the initial cost and annual…
Q: A machine costs $700,000 and is expected to yield an after-tax net income of $30,000 each year.…
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Q: a. A new operating system for an existing machine is expected to cost $710,000 and have a useful…
A: a.Compute the net present value of investment “a”.
Q: Covington Corporation purchased a vibratory finishing machine for $22,000 in year 0. The useful life…
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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: A new absorption chiller system costs $360,000 and will save $52,500 in each of the next 12 years.…
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Q: Rooney, Incorporated is considering the purchase of a new machine costing $700,000. The machine's…
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Q: If an asset costs $65,000 and is expected to have a $5,000 salvage value at the end of its ten-year…
A: Cash payback period = Initial investment /annual cash inflow
Q: Jason Corporation has invested in a machine that cost $80,000, that has a useful life of eight…
A: Given: Particulars Amount Initial cost $80,000 Use life 8 Payback period 5
Q: Henerhiya Co. is planning to buy a machine costing P84,000 to be depreciated on the straight-line…
A: The payback bailout is the length of time required to recover the cost of Investment through cash…
Q: a. The Payback Period. b. The Accounting Rate of Return. c. The Net Present Value. d. The…
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Q: Enerlam Company purchased a machine with an estimated useful life of seven years. The machine will…
A: Net present value = Present value of future cash inflows- initial investment
Q: Assume that a company purchased a new machine for $26,000 that has no salvage value. The machine is…
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Q: Eastern corporation replace an old vibratory finishing machine and purchased new machine for $…
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Q: Priscila Eunice Co. is interested in purchasing a state-of-the-art packaging machine for its…
A: Net present value is the difference between present value of all cash inflows and initial investment…
Q: Lovewell Limited a food manufacturer is considering purchasing a new machine for£275,000. The…
A: Compute the payback period (PBP), using the equation as shown below: Hence, the PBP is 3.79…
Q: A machine can be purchased for $150,000 and used for five years, yielding the following net incomes.…
A: Definition: Cash payback method: The cash payback period is the expected time period which is…
Q: A machine can be purchased for $150,000 and used for five years, yielding the following net incomes.…
A: Payback period: It can be defined as the time that is taken by an investment before it starts…
Q: a. A new operating system for an existing machine is expected to cost $520,000 and have a useful…
A: We need to add back annual depreciation to after tac profits, so that we are able to determine the…
Q: The Mellow Machine Company is considering the addition of a computerized lathe to its equipment…
A: Depreciation expense: Depreciation expense is the reduction in a particular asset due to its use or…
Q: Vandezande Inc. is considering the acquisition of a new machine that costs $467,000 and has a useful…
A: Payback is a capital budgeting tool which is used to find the time required to recover the invested…
Q: The Lana company is planning to purchase a machine known as machine D. Machine D would cost $ 28580…
A: Pay back period =intial investment / annual cash flow=28580/9529 =2.999(or 3 years)
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: The cost of a new machine is $250,000) The machine has a 3-year life and no salvage value) If the…
A: Using the excel for cumulative table
Q: ue. The cash flows that would be produced by the machine are (Ignore income taxes): Net Cash…
A: Payback period is the period within which the initial investment is recovered . It is the time taken…
Q: Sussman industries purchased a drilling machine for $50,000 and paid cash. Sussman expects to use…
A: Sussman industries purchased a drilling machine for $50,000 and paid cash.Part (A)So, the cash flow…
Q: A machine has a first cost of PhP 800,000 and a salvage value of PhP 50,000 at the end of its life…
A: Return means earn additional on invested amount over the period. It shows excess cash inflow over…
Q: The estimated cash payback period f
A: Capital budgeting: capital budgeting is a decision making method done by management accountants in…
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…
a manufacturing company bought a new machine for $150,000. the machine will last ten years and will be
Requirement: what is the accounting
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- Cinemar Productions bought a piece of equipment for $55,898 that will last for 5 years. The equipment will generate net operating cash flows of $14,000 per year and will have no salvage value at the end of its life. What is the internal rate of return?The Scampini Supplies Company recently purchased a new delivery truck. The new truck cost $22,500, and it is expected to generate net after-tax operating cash flows, including depreciation, of $6,250 per year. The truck has a 5-year expected life. The expected salvage values after tax adjustments for the truck are given here. The company’s cost of capital is 10%. Should the firm operate the truck until the end of its 5-year physical life? If not, then what is its optimal economic life? Would the introduction of salvage values, in addition to operating cash flows, ever reduce the expected NPV and/or IRR of a project?Although the Chen Company’s milling machine is old, it is still in relatively good working order and would last for another 10 years. It is inefficient compared to modern standards, though, and so the company is considering replacing it. The new milling machine, at a cost of $110,000 delivered and installed, would also last for 10 years and would produce after-tax cash flows (labor savings and depreciation tax savings) of $19,000 per year. It would have zero salvage value at the end of its life. The project cost of capital is 10%, and its marginal tax rate is 25%. Should Chen buy the new machine?
- Garnette Corp is considering the purchase of a new machine that will cost $342,000 and provide the following cash flows over the next five years: $99,000, $88,000, $92,000. $87,000, and $72,000. Calculate the IRR for this piece of equipment. For further instructions on internal rate of return in Excel. see Appendix C.Dauten is offered a replacement machine which has a cost of 8,000, an estimated useful life of 6 years, and an estimated salvage value of 800. The replacement machine is eligible for 100% bonus depreciation at the time of purchase- The replacement machine would permit an output expansion, so sales would rise by 1,000 per year; even so, the new machines much greater efficiency would cause operating expenses to decline by 1,500 per year The new machine would require that inventories be increased by 2,000, but accounts payable would simultaneously increase by 500. Dautens marginal federal-plus-state tax rate is 25%, and its WACC is 11%. Should it replace the old machine?Montello Inc. purchases a delivery truck for $25,000. The truck has a salvage value of $6,000 and is expected to be driven for 125,000 miles. Montello uses the units-of-production depreciation method, and in year one the company expects the truck to be driven for 26,000 miles; in year two, 30,000 miles; and in year three, 40,000 miles. Consider how the purchase of the truck will impact Montellos depreciation expense each year and what the trucks book value will be each year after depreciation expense is recorded.
- Montello Inc. purchases a delivery truck for $25,000. The truck has a salvage value of $6,000 and is expected to be driven for 125,000 miles. Montello uses the units-of-production depreciation method, and in year one it expects to use the truck for 26,000 miles. Calculate the annual depreciation expense.Filkins Fabric Company is considering the replacement of its old, fully depreciated knitting machine. Two new models are available: Machine 190-3, which has a cost of $190,000, a 3-year expected life, and after-tax cash flows (labor savings and depreciation) of $87,000 per year; and Machine 360-6, which has a cost of $360,000, a 6-year life, and after-tax cash flows of $98,300 per year. Knitting machine prices are not expected to rise because inflation will be offset by cheaper components (microprocessors) used in the machines. Assume that Filkins’ cost of capital is 14%. Should the firm replace its old knitting machine? If so, which new machine should it use? By how much would the value of the company increase if it accepted the better machine? What is the equivalent annual annuity for each machine?Gallant Sports s considering the purchase of a new rock-climbing facility. The company estimates that the construction will require an initial outlay of $350,000. Other cash flows are estimated as follows: Assuming the company limits its analysis to four years due to economic uncertainties, determine the net present value of the rock-climbing facility. Should the company develop the facility if the required rate of return is 6%?
- Consolidated Aluminum is considering the purchase of a new machine that will cost $308,000 and provide the following cash flows over the next five years: $88,000, 92,000, $91,000, $72,000, and $71,000. Calculate the IRR for this piece of equipment. For further instructions on internal rate of return in Excel, see Appendix C.Alfredo Company purchased a new 3-D printer for $900,000. Although this printer is expected to last for ten years, Alfredo knows the technology will become old quickly, and so they plan to replace this printer in three years. At that point, Alfredo believes it will be able to sell the printer for $15,000. Calculate yearly depreciation using the double-declining-balance method.Montezuma Inc. purchases a delivery truck for $15,000. The truck has a salvage value of $3,000 and is expected to be driven for eight years. Montezuma uses the straight-line depreciation method. Calculate the annual depreciation expense. After three years of recording depreciation, Montezuma determines that the delivery truck will only be useful for another three years and that the salvage value will increase to $4,000. Determine the depreciation expense for the final three years of the assets life, and create the journal entry for year four.
