Complete the Capital Budgeting Schedule Born & Bread BakeryCapital Investment ProjectSales per year$ 270,000 Commence at beginning of year 1.Varable cost per year30% of salesFixed Costs per year$90,000$ 120,000 Paid prior to approval decision on this equipment (capital expenditure)$ 220,000 Paid, delivered & operational at beginning of year 1Catering Equipment SurveyEquipment Cost (Capex)Net working capital5,000Equipment sold for$20,000 at end of year 4.Тах20%Required Return12%Depreciation (tax)52,000 Stipulated for both tax and accounting purposesYears>>124Initial OutflowsEquipment (Capex)(220,000)Working CapitalTotal(220,000)Operating Cash FlowsSales270,000Variable Costs(81,000)Cost of Sales189,000Fixed CostsDepreciation(52,000)Before Tax Cash Flows137,000Tax(27,400)After tax Cash Flows109,600Add back depreciationOperating Cash Flow(220,000)109,600Terminal Cash FlowsWorking Capital Recovery$ 168,000$ 20,000Sale of equipmentBVTax on Gain/loss on disposalDisposal ProceedsTerminal Cash FlowGain (Loss)-148000Net Cash Flows(220,000)109,600Cumulative Cash Flow(220,000)(110,400)(110,400)(110,400)(110,400)NPVIRRPayback

Required return 12% Year 0 1 2 3 4 Cumulative cash flows -220,000 110400 110400 110400…

Answered: Complete the Capital Budgeting Schedule

Business

Finance

Complete the Capital Budgeting Schedule

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter12: Capital Investment Analysis

Section: Chapter Questions

Problem 8E: Net present value method for a service company Coast-to-Coast Inc. is considering the purchase of an...

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Company Q is considering a project which needs an equipment. The cost of the equipment is $350,000. This equipment will be depreciated for five years on a straight-line basis to zero-salvage value. The market value of the equipment at the end of the fifth year is $25,000. Initial investment in working capital is $22,000. Annual sales and operating costs (excluding depreciation) from this project are $175,000 and 93,000 respectively. Company pays tax at 40%. The annual operating cashflow from the project is A. $75200 B. $64000 C. $62000 D. $77200
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On December 31 Y1, the Company ARL develop a Product: Master 3D. The disbursement associate to the Product are the following: Research $6,000,000 and Development $4,000,000. The criteria have been met for recognition of the development costs as an asset. Product Master D will be in the market in Year 2 and is expected to marketable for 5 years. Total sales of the product are estimated at $100,000,000. Instructions: Using IAS 38, determine the effect of the Research & Development costs have on Company’s Net Income. Answer the following questions. 1. Choose one and explain Net Income using IFRS will be in Year 1: a. Higher by $________ larger than U.S. GAAP income. b. Lower by $________ larger than U.S. GAAP income. c. Both will be the same. 2. Explanation: 3. Year 3 (ending balance) Determine the Book Value of the asset 4. Explanation: Show you computations.