Calculate Discounted Payback period and suggest which one is better if the discounting factor is 10% and tax rate 30%. Show in detail relevant calculations and use Straight Line Method of Depreciation

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Q: company is evaluating a proposal for purchase of equipment which will cost $180,000. The cash…

A: Introduction Payback period: It is the method of capital investment evaluation. This method counts…

Q: The internal rate of return method is used by Testerman Construction Co. in analyzing a capital…

A: a. At internal rate of return, the present value of cash inflows is equal to the present value of…

Q: Two alternative machines (A and B) have been suggested each costing 4,50,000. C. Flow After Tax…

A: The net  рresent  vаlue  (NРV)  is  the  differenсe  between  the  рresent  vаlue  оf  саsh  inflоws…

Q: What will be the annual cash outflows for Mimi Inc. if it leased a milling machine for $8,200 per…

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Q: From the following information calculate the Net Present Value of the two projects & sugge which of…

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Q: A property is for sale with an asking price of $2.75 million. The property is assumed to increase in…

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Q: The internal rate of return method is used by Testerman Construction Co. in analyzing a capital…

A: Internal rate of return is the rate at which the present value of cash inflows is equal to the…

Q: used. If the desired after-tax return on investment is 10% per year, which de should be chosen?…

A: The net present value is the difference between the present value of cash flow and initial…

Q: Internal Rate of Return Method The internal rate of return method is used by King Bros. Construction…

A: Internal rate of return is the rate at which the present value of cash inflows is equal to initial…

Q: [EXCEL]  Investment cash flows: Zippy Corporation just purchased computing equipment for $20,000.…

A: MACRS depreciation method is the standard depreciation method which is used for federal income tax…

Q: DT Ltd. provides you the following information: 1. Purchase price of machine Rs. 1,90,000 2.…

A: given, Purchase price of machine= Rs. 1,90,000 Installation expenses =Rs. 10,000 Useful life of…

Q: Internal Rate of Return Method The internal rate of return method is used by Testerman Construction…

A:

Q: What is the capitalized cost of a structure that will require construction cost of P1,000,000…

A: solution given initial cost            =1,000,000 P800,00 each year for the next 4 years annual year…

Q: Three mutually exclusive design alternatives are being considered. The estimated cash flows for each…

A: "Since you have posted a question with multiple sub-parts, we will solve first three sub parts for…

Q: In 1-year the number of units sold will be revised either upward by 8,700 or downward by 4,300 with…

A: Given:

Q: An investment of $450,000 is made in equipment that qualifies as 5-year equipment for MACRS-GDS…

A: Planning horizon is the time period for which investor will invest the amount in an investment. With…

Q: The internal rate of return method is used by King Bros. Construction Co. in analyzing a capital…

A: Present value factor for an annuity = Capital expenditure / Annual net cash flows

Q: Internal Rate of Return Method The internal rate of return method is used by Testerman Construction…

A: Requirement 1: The calculation of the present value factor for an annuity is as follows: The…

Q: nternal Rate of Return Method The internal rate of return method is used by Testerman Construction…

A: IRR means the rate of return at which the sum of discounted cash inflows  equal to the sum of…

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A: Depreciation = Cost of investment / Economic life

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A: Solution: Annual net income from investment = Investment amount * ARR = P280,000 * 15% = P42,000

Q: (a) Declining balance method, (b) DDB method, (c) sinking fund method g iven interest rate at 12.5…

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A: a.Determine the present value factor:

Q: A new piece of equipment costs $500,000, and depreciated according to the 5 year MACRS schedule.…

A: In the given question, we have to calculate the net cash inflow for which we have been given annual…

Q: Based on this information the payback period is:

A: Annual cash flow=Depreciation+Net income =(10000+5000)=$15000

Q: Donata Company purchased equipment for $45,000 in December 20x1. The equipment is expected to…

A: Solution: Additional revenue per year = $12,000 Additional cash expenses = $6,000 Depreciation for…

Q: AZA Ltd is considering the purchase of a machine for R2 750 000, which would be sold after seven…

A: In accountancy, machine is a form of asset and is reported under the asset side of the balance…

Q: In 1-year the number of units sold will be revised either upward by 8,700 or downward E 4,300 with…

A: Present value is defined as the current value of the future amount of money of cash flows given a…

Q: Internal Rate of Return Method The internal rate of return method is used by King Bros.…

A: Internal Rate of Return is the rate where Net present value of Cash flows will be ZERO

Q: a. If taxes are 25%, what is the After tax operating cash flow for the first year?

A: Given: Operating income = $200,000 Purchased for = $2,000,000 Land portion = $200,000 Building…

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

A: Gross profit is $50,000 per year Cost of equipment is  $130,000 Salvage value at the end of the 8 th…

Q: Internal Rate of Return Method The internal rate of return method is used by King Bros. Construction…

A: Answer a) Investment requirecd =$89424Annual cash flows =$18000Useful life =8 years Determination of…

Q: An investment of $800,000 is made in equipment that qualifies as 3-year equipment for MACRS-GDS…

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

Q: A firm can purchase a centrifugal separator​ (5-year MACRS​ property) for ​$22,000. The estimated…

A: Net Present Value=(Present Value of Cash Inflows-Present Value of Cash Outflows)

Q: Internal Rate of Return Method The internal rate of return method is used by King Bros. Construction…

A: Hence, 3.037 is the PV of an annuity of $1. It is obtained by the division of initial investment and…

Q: A corporate expects to receive $37,399 each year for 15 years if a particular project is undertaken.…

A:

Q: The company buys an asset that costs $11,200 and returns net cash flow of $160 per month for 3…

A: NPV is the present value of cash inflows less present value of cash outflows. IRR is the discount…

Q: A company is considering two mutually exclusive projects. Both require an initial cash outlay of…

A: Details and inputs under the question: Initial Investment = 20,000 each Required Return = 10% Tax…

Q: payout is 40 percent? SECTION-D (Compulsory) (115=15) 15. A company is considering two mutually…

A: Before investing in new assets, profitability of the project is evaluated by using various methods…

Q: Years Asset - M Asset - N Year 1 3,000 Year 2 1,000 4,000 Year 3 1,000 1,000 Year 4 1,000 2,000

A: The discounted payback period is the time in years it takes the discounted cash flows of the project…

Q: Kurty Limited is considering an investment in a fixed asset which costs $378,000. The asset is…

A: Cost of fixed asset= $378,000 Cash inflows= $108,000 each year for the next four years Residual…

Q: A piece of construction equipment costs $325,000. It will be depreciated as Modified Accelerated…

A: After tax cash flow = Profit after tax + depreciation for the year Depreciation is calculated by…

Q: post-back profitability inde

A: Pay back period refers to a period taken by an investment to cover the initial outlay.

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.