The DYI Construction Co. is considering a new inventory system that will cost $750,000. The system is expected to generate positive cash flows over the next four years in the amounts of $350,000 in year one, $300,000 in year two, $150,000 in year three, and $180,000 in year four. DYI's required rate of return is 8%. What is the payback period of this project?

Q: Kingston, Inc. management is considering purchasing a new machine at a cost of $4,255,072. They…

A: Investments are a source of income for a long period of time for a corporation and help the…

Q: unland, Inc. management is considering purchasing a new machine at a cost of $4,390,000. They expect…

A: solution NPV = present value of inflow - present value of outflow discount rate = 15% cash flow…

Q: uick computing currently sells 19 million computer chips each year at a price of $23 per chip. It is…

A: Impact on the Cash flow from manufacture of new chips is calculated as follows: Increase in sales of…

Q: Alpha Zeta is considering purchasing some new equipment costing $390,000. The equipment will be…

A: Average accounting rate of return is the ratio of average net income to average investment. Average…

Q: Fargo Corp, is considering the purchase of a new pilece of equipment The equipment costs $51,400 and…

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

Q: We are examining a new project. We expect to sell 6,500 units per year at $43 net cash flow apiece…

A: Net Present Value(NPV) is excess of PV of inflows over PV of cash outlays of proposed project. It is…

Q: A company is considering buying workstation computers to support its engineering staff. In today's…

A: Given: i = 16%, f = 10% To Find the amount of payment, first we have to calculate i: i = i - f…

Q: A software company that installs systems for inventory control using RFID technology spent $600,000…

A: F/A is taken from table FV of an annuity of $1.

Q: Stationery Supplies is considering installing an inventory control system in itsstore in Provo,…

A: Computation:

Q: a) Harrison Corporation expects to sell 8,500 units per year of its new product at $68 net cash flow…

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

Q: A company is deciding whether to launch a new product or not. The research and development cost…

A: Relevant net cash flow of the business means after tax cash inflow of the business after deducting…

Q: Regina Industries has a new product whose sales are expected to be 1.2, 3.5, 7, 5, and 3 million…

A: The present value is the value of the sum received at time 0 or the current period. It is the value…

Q: A firm is considering a project with a 5-year life and an initial cost of $1,000,000. The discount…

A: Initial cost = -$1000000 After tax cash flow Year 1 – 3 = 2500*120 = $300,000 Abandon option, After…

Q: Fargo Corp. is considering the purchase of a new plece of equipment The equipment costs $51,400 and…

A: Answer a) Calculation of Annual Depreciation on Equipment Annual Depreciation on Equipment =…

Q: Need help with cost savings

A: Computation of operating cash flow:The NPV will be zero when the firm is indifferent among accepting…

Q: RODEO, Inc., is purchasing machinery at a cost of $2,957,720. The company’s management expects the…

A:

Q: Due to increased demand, the management of Rani Beverage Company is considering purchasing new…

A: The time value of money is not taken into account during the payback period. It is calculated by…

Q: Muncy, Inc., is looking to add a new machine at a cost of $4,133,250. The company expects this…

A: The difference between net cash Inflow and net cash Outflow over a period of time is called NPV.

Q: at is the expected net income (after tax) in Year 3 if the proposed investment is undertaken? Round…

A: Summary of the relevant information provided in the question : New Machine Cost = $ 303,000 Sales…

Q: The owner of Ardent company wants to increase sales by ZMW75 000 over the next year. The company's…

A: Cash Cycle: It is the time taken between buying raw materials to make a product and collect money…

Q: A software company that installs systems for inventory control using RFID technology spent $720,000…

A: The calculation is:

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: The manufacture of equipment costs $73,000 per year. An engineer finds that by spending $16,000 now…

A: Costs per year= 73000 Initial Cost = 16000 Updated costs per year: Year Cash Outflow 1 -58000…

Q: Suppose Francine Dunkelberg’s Sweets is considering investing in warehouse-management software that…

A: Accounting rate of return (ARR) = Average annual net income / Average investment Where, Average…

Q: Kingston, Inc. management is considering purchasing a new machine at a cost of $4,150,315. They…

A: given, r=15% YEAR CASHFLOW 0 -4150315 1 756424 2 834614 3 932657 4 1071731 5 1298352…

Q: The company you work for is considering a new product line that is projected to have the net cash…

A: 1 given, inflation adjusted rate =20% year cashflow discounting factor @ 20% pw 0 -10,000 1…

Q: DYI Construction Co. is considering a new inventory system that will cost $650,000. The system is…

A: Internal rate of return (IRR ) is the rate at which the net present value of the project is zero.

Q: Suppose Francine Dunkelberg’s Sweets is considering investing in warehouse-management software that…

A: Accounting Rate of Return:  The accounting rate of return is the amount of income that is earned…

Q: Ace Corporation is considering expanding its operations. If it expands, its current accounts are…

A: Change in working capital is difference between current assets and current laibilties.

Q: A report from the marketing department indicates that a new product will generate the following…

A: Discount rate is 11% To Find: Present Value

Q: A business industry has a new product whose sales are expected to be 1.2, 3.5, 7, 5, 3 million units…

A: The Present worth method means computing the Present value of all the cashflows generated from the…

Q: Your firm, Agrico Products, is considering a tractor that wouldhave a cost of $36,000, would…

A: Computation of NPV (3 cases):

Q: e are examining a new project. We expect to sell 6,000 units per year at $74 net cash flow apiece…

A: Data given: annual cash flow is projected =$74 × 6,000 = $444,000. Discount rate = 18 %, Initial…

Q: Compute the present value, P, for the following cash flows. You supervise an aging production line…

A: Net Present Value is the difference between the present value of cash inflows and cash outflows.

Q: Primus Corp. management is planning to convert an existing warehouse into a new plant that will…

A: The internal rate of return is the rate at which the present value of cash inflows is equals to the…

Q: FNV Industries is considering the purchase of a new processing machine. The initial cost of the…

A: NPV is the difference between present value of all cash inflows and initial investment. NPV =PV of…

Q: A company is deciding whether to purchase new equipment that costs $300,000.00. Management estimates…

A: Initial cash outflow = $300,000 Annual cash inflow (1-4 years) = $ 160,000 Salvage value = $60,000

Q: ABC Company is evaluating a project that can generate the following revenues: P4,600 in year one,…

A: Calculation of Effective Annual Rate = (1 + 12%/2)2 - 1…

Q: You are considering making an $80,000 investment in a process improvement project. Revenues are…

A: Annual Equivalent worth of the project is the net present value of cash flows divided by equivalent…

Q: A firm is considering a new inventory system that will cost $120,000.  The system is expected to…

A: Capital Budgeting Techniques helps to determine which investment alternative should be undertaken.…

Q: ny expects the cost of equipment maintenance to be $5,000 in year one, $5,500 in year two, and…

A: The given problem can be solved using NPV function in excel.

Q: You are considering making an $80,000 investment in a process improvement project. Revenues are…

A: To compute the annual equivalent worth (AEW), we will first compute the NPV and then use the PMT…

Q: DYI Construction Co. is considering a new inventory system that will cost $650,000. The system is…

A: net present value (NPV) is present value of cash inflows - present value of cash outflows at 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.