Henerhiya Co. is planning to buy a machine costing P84,000 to be depreciated on the straight-line method basis over 10 degrees years life. The related cash flow from operations, net of income taxes, is expected to be P10,000 a year for each of the first 6 years and P12,000 for the next 4 years. It was also estimated that the salvage value of the project at the end of year 1 to be P60,000 and decreases by P5,000 each year thereafter, provided further that at the end of 10 years, the machine has no salvage value. Compute the payback bailout period in years.

Q: Krostel Company is planning to acquire a machine costing P 500,000 with a useful life of 3 years…

A: Accounting rate of return = Average Annual Income/ Average Investment Accounting rate of return = P…

Q: A machine costs Php 500,000 with a salvage value of Php 50,000. Its useful life is six years. The…

A: Depreciation is the decrease in the value of fixed tangible asset due to usage, obsolence or passage…

Q: Company is planning to purchase an new machine for the amount of P90,000, with an estimated useful…

A: In bailout period we consider the cash flow and salvage value and time period required to recover…

Q: Frost Company is evaluating the purchase of a rebuilt spot-welding machine to be used in the…

A: IRR is a rate at which the present value of all cash inflows is almost equal to the initial…

Q: Hayden Company is considering the acquisition of a machine that costs $320,000. The machine is…

A: Formulas: Cash payback period = Cash out flows / Cash inflows

Q: Jefferson Company is considering investing $33,000 in a nev last five years and to have a salvage…

A: The expense of borrowing money is called interest expenditure. For using the lender's funds, the…

Q: .Calculate the NPV method and discount rate of 12%

A: Net Present Value (NPV) is a capital budgeting technique used for finding the profitability of the…

Q: The Mellow Machine Company is considering the addition of a computerized lathe to its equipment…

A: Present value of tax shield on depreciation is to be arrived by considering discount rate 10%

Q: Teja International is determining the cash flows for a project involving replacement of an old…

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

Q: NUBD Co. purchased a new machine on January 1 of this year for an amount of P85,000, with an…

A: Bail payback is calculated to know the length of time needed to pay back the initial invested amount…

Q: project’s total nominal cash flow from as

A: Cash flow statements refer to the statement that shows the cash inflows and cash outflows in an…

Q: A construction company has purchased a motor for P20,000 and a generator for P8,000 to produce its…

A: Depreciation is charged on fixed tangible asset to show the asset on true and accurate value. It is…

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: The NUBD Co. is planning to purchase a new machine for P300,000. The payback period is expected to…

A: Cost of new Machine = P300,000 Depreciation = P50,000 Expected Payback Period = 5 Years

Q: Heidi Company is considering the acquisition of a machine that costs $420,000. The machine is…

A: Investment required in the machine is $420,000. Amount to be recovered is $420,000. Each year an…

Q: Hayden Company is considering the acquisition of a machine that costs $444,000. The machine is…

A: Payback period: Payback period is the length of time in which an investment reaches its break-even…

Q: XYZ Company invests $2,000,000 for a new machine. The new machine will generate an annual income of…

A: For calculation of IRR two rates are estimated with close range, in which one rate should have…

Q: Hayden Company is considering the acquisition of a machine that costs $392,000. The machine is…

A: The payback period is the length of time in which an investment reaches its break-even point. In…

Q: NUBD Co. is planning to purchase a new machine which it will depreciate, for book purposes, on a…

A: Accounting rate of return = Average annual profit / Average investment Average annual profit = Net…

Q: A machine has a first cost of $10,000 and an expected salvage value of $900 when it is sold.…

A: Payback period is the period which depicts the recovery period within which the cash outflows of the…

Q: Henessy Co. is planning to buy a machine costing P84,000 to be depreciated on the straight-line…

A: Payback Period: The payback period is the amount of time it will take for you to recoup the cost of…

Q: A construction company has purchased a motor for P20,000 and a generator for P8,000 to produce its…

A: Annual cost of operation = Depreciation expense + maintenance cost + operation costs

Q: The Scampini Supplies Company recently purchased a newdelivery truck. The new truck costs $22,500,…

A: The formula to compute NPV for an abandonment option as follows:

Q: A new absorption chiller system costs $360,000 and will save $52,500 in each of the next 12 years.…

A:

Q: Pears Company purchased a new machine on January 1 of this year for an amount of P90,000, with an…

A: At the end of the year Cash inflow Salvage value Cumulative payback 1 P36,000 P20,000 P56,000 2…

Q: Special Instrument company is considering replacing its machine with a new model that sells for…

A: A project could be accepted if its net present value (NPV) is positive. A positive NPV refers that,…

Q: CC Company invested in a project which required an investment of P10,000 with a salvage value of…

A: GIVEN   CC Company invested in a project which required an investment of P10,000 with a salvage…

Q: An electronics balance costs P87,000 and has an estimated salvage value of P8,000 at the end of its…

A: Depreciation expense: Depreciation expense is the reduction in a particular asset due to its use or…

Q: A 2-ton hydraulic press is needed to add to production. This equipment has an initial purchase and…

A: Initial Purchase and Installation Cost 190000         Yearly Operation Cost 1000…

Q: The NUBD Co. is planning to purchase a new machine for P300,000. The payback period is expected to…

A:

Q: A machine costs $500,000 and is expected to yield an after-tax net income of $19,000 each year.…

A: Answer:   6.33%

Q: A new absorption chiller system costs $360,000 and will save $52,500 in each of the next 12 years.…

A: Net present worth approach is a quantitative analysis tool that helps in evaluating the investment…

Q: How much will the new machine cost?

A: In the given case, the present value of annual cashflows will be equal to the cost of the machine.…

Q: A company is considering purchasing an asset for P60,000 that would have a useful life of 5 years…

A: Solution Given Cost of asset 60000 Useful life 5 years Salvage value 7000 Net…

Q: will the new machine cost

A: Cost = Annual cash from operations/Accounting rate of return

Q: accounting rate of return based on initial investment?

A: Year  1 2 3 4 5 Cash flow 180000 180000 180000 180000 180000 Less: Depreciation (200000)…

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: 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: Heidi Company is considering the acquisition of a machine that costs $549,000. The machine is…

A: Cash payback period = Initial investment / Annual net cash inflow

Q: NUBD Co. purchased a new machine on January 1 of this year for an amount of P85,000, with an…

A: The bailout period is similar to the payback period, the difference between them is that the bailout…

Q: NUBD Co. is planning to purchase a new machine which it will depreciate, for book purposes, on a…

A: Accounting rate of return measures the amount of profits that can be earned from an investment.

Q: The initial cost of an evaporative crystallizer including its installation is Php 930,000. The…

A: solution given Initial cost 930000 Cost of dismantling 22000 Salvage value 66000…

Q: Sunland is considering the purchase of equipment costing $147000. The equipment has a 12- year…

A: The Accounting Rate of Return (ARR) seems to be the projected percentage rate of return on an…

Q: A machine costs $700,000 and is expected to yield an after-tax net income of $52,000 each year.…

A: A machine costs $700,000 and is expected to yield an after-tax net income of $52,000 each year.…

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…

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.