The Chum Company is considering the production of a new product line which will require an investment of P 3 000 000 with P 200 000 salvage value. The investment will have a useful life of ten years during which annual cash inflows before income tax of P 1 400 000 are expected. The income tax rate is 40%. Required:     Annual net income Average return on investment Average return on average investment

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A: Payback period:  The payback period (PBP) is an investment assessment approach that determines how…

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A: Present worth = Future value / (1+r)^n

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Q: How many years must the cash flows last for the investment to be acceptable?

A: Time value of money:   Any amount invested today earns an additional income, called interest…

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A:

Q: A new machine costing $100,000 is expected to save the McKaig Brick Company $15,000 per year for 12…

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A: Formulas that are used:-

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A: In this we have to calculate present value of all and decide what is required period.

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A: Computation:

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A: The payback period is the amount of time it takes to recover the initial cash outflow. The NPV is…

Q: John Walker Company is planning to buy a new machine costing Php2,000,000 with a useful life of five…

A: 1) Payback period = Initial investment                                   -------------------…

Q: An investment of P270,000 can be made in a project that will produce a uniform annual revenue of…

A: NPV It is a capital budgeting tool to decide on whether the capital project should be considered or…

Q: Answer each independent question, (a) through (e), below. a. Project D costs $10,000 and will…

A: book rate of return based on the average book value=Average net profit/Average investment…

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A: The question is based on the concept of Financial Management. As per the Bartleby guidelines we are…

Q: project requires an initial investment of P300,000 on equipment. The project will generate sales…

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A: Average After Tax Income = 76,300 Average Book Value of Equipment = 194,140

Q: A company is considering the purchase of a new machine for P480,000. Management predicts that the…

A: Payback period: The payback period refers to the total years needed to cover the initial cash…

Q: A company would like to purchase a machine for $160,000 with a life of 8 years. They estimate a…

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Q: An investment of P200,000 can be made in a project that will produce a uniform annual revenue of…

A: As per the honor code, we’ll answer only one question at a time, we have answered the first question…

Q: A capital investment of Php 508,000 on a project can produce an annual revenue of Php 383,000 for 5…

A: Capital Investment = 508,000 Annual Revenue = 383,000 Investment is mentioned as 508,000 Salvage…

Q: Dinshaw Company is considering the purchase of a new machine. The invoice price of the machine is…

A: GIVEN   Dinshaw Company is considering the purchase of a new machine. The invoice price of the…

Q: Hashim Sdn. Bhd. plan to introduce a new product line with an initial investment of RM 1.5 million…

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Q: A company would like to purchase a machine for $160,000 with a life of 8 years. They estimate a…

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Q: An investment project is expected to yield $10,000 in annual revenues, will incur $2,000 in fixed…

A: Cost of goods sold = Sales x 60% = $10000 x 60% = $6,000

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A: The question is related to Annual Cost Method. In  this  method,  interest  on  the  original…

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Q: What is the internal rate of return on this investment?

A: Rate of return of a company implies the amount of money that is being returned after investing in an…

Q: Nine Point Industries is trying to decide whether to invest in equipment to manufacture a ne…

A: Increase in sales = $94,000 Decrease in Material Cost =$37,000 Equipment Cost = $148,000 Time Period…

Q: A PROJECT IS ESTIMATED TO COST P 100,000.00, LASTS 8 YEARS, AND HAVE A P 10,000.00 SALVAGE VALUE.…

A: Investment income includes interest charges, dividends, capital appreciation earned from the sale of…

Q: An investment of RM20,000 can be made in a project that will produce a uniform annual revenue of…

A: Data Given: Investment (t=0)= RM20,000 Annual Revenue (t=1 to t=7) = RM7310 Salvage Value (t=7) =…

Q: What must be the required rate of return, so that the company will be indifferent between these two…

A: Introduction: The term required rate of return can be defined as the minimum amount which an…

Q: Maroc Group of Companies (MGC) Ltd is considering an investment in an equipment costing GHȻ80,000.…

A: The cost of capital is the minimum required rate of return necessary to meet the optimum return on…

Q: 1. An investment of P270, 000 can be made in a project that will produce a uniform annual revenue of…

A: Given, In this question we have to find the given payback period of the  investment.

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

Q: An investment of P270,305 is needed for a Korean Mart that will produce a uniform annual revenue.…

A:

Q: Glow  Limited is considering expanding its production capacity with the installation of new…

A: Cash Inflow :— Cash Inflow means Cash which is Generated from the Operation of the Business.  Cash…

Q: An investment of ₱270,000 can be made in a project that will produce a uniform annual revenue of…

A: Pay back period of the investment can be estimated using various methods like: The Rate of Return…

Q: Packaging equipment for Xi Cling Wrap costs $60,000 and is expected to result in end-of-year net…

A: MARR is used as a hurdle rate in the capital budgeting projects. It is that minimum rate which an…

Q: An investment of P3M can be made in a business that will produce uniform annual revenue of P1.2M for…

A: Required Return = 20% Cash Flows: Year Cash Flow Reference 0 -3,000,000 First Cost 1 950,000…

Q: Stuart Electronics is considering investing in manufacturing equipment expected to cost $350,000.…

A: We’ll answer the first question since the exact one wasn’t specified. Please submit a new question…

Q: a minimum after-tax return of 8% on investment.  Project D costs $5,000 and will generate sales of…

A: The difference between the current value of cash and the future value of cash is referred to as net…

Q: Elearning Company would like to develop its technology process by purchasing a production equipment…

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Q: An investment of P270,000 can be made in a project that will produce a uniform annual revenue of…

A: Computation:

Q: Maroc Group of Companies (MGC) Ltd is considering an investment in an item of equipment costing…

A: Capital Budgeting decisions are one of the most important decisions taken by the firm as these…

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.