Balloons By Sunset (BBS) is considering the purchase of two new hot air balloons so that it can expand its desert sunset tours. Variou information about the proposed investment follows: (Future Value of $1, Present Value of $1, Future Value Annuity of $1, Present Valuc Annuity of $1.) (Use appropriate factor(s) from the tables provided.) $ 364,000 8 years Initial investment (for two hot air balloons) Useful life $ 52,000 Salvage value Annual net income generated BBS's cost of capital 30,212 8% Assume straight line depreciation method is used. Required: Help BBS evaluate this project by calculating each of the following: 4. Recalculate the NPV assuming BBS's cost of capital is 11 percent. (Do not round intermediate calculations. Negative amount should be indicated by a minus sign. Round the final answer to nearest whole dollar.) 1. Accounting rate of return 2. Payback period 3. Net present value 4. Net present value assuming 11% cost of capital % years
Balloons By Sunset (BBS) is considering the purchase of two new hot air balloons so that it can expand its desert sunset tours. Variou information about the proposed investment follows: (Future Value of $1, Present Value of $1, Future Value Annuity of $1, Present Valuc Annuity of $1.) (Use appropriate factor(s) from the tables provided.) $ 364,000 8 years Initial investment (for two hot air balloons) Useful life $ 52,000 Salvage value Annual net income generated BBS's cost of capital 30,212 8% Assume straight line depreciation method is used. Required: Help BBS evaluate this project by calculating each of the following: 4. Recalculate the NPV assuming BBS's cost of capital is 11 percent. (Do not round intermediate calculations. Negative amount should be indicated by a minus sign. Round the final answer to nearest whole dollar.) 1. Accounting rate of return 2. Payback period 3. Net present value 4. Net present value assuming 11% cost of capital % years
Financial And Managerial Accounting
15th Edition
ISBN:9781337902663
Author:WARREN, Carl S.
Publisher:WARREN, Carl S.
Chapter26: Capital Investment Analysis
Section: Chapter Questions
Problem 17E
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