The management of Byrge Corporation is investigating buying a small used aircraft to use in making airborne inspections of its above-ground pipelines. The aircraft would have a useful life of 6 years. The company uses a discount rate of 13% in its capital budgeting. The net present value of the investment, excluding the intangible benefits, is -$475,200. (Ignore income taxes.) Click here to view Exhibit 148-1 and Exhibit 14B-2, to determine the appropriate discount factor(s) using the tables provided. How large would the annual intangible benefit have to be to make the investment in the aircraft financially attractive? (Round your intermediate calculations and final answer to the nearest whole dollar amount.) Multiple Choice $118,859 O $475,200 O$79,200 $61,776

The management of Byrge Corporation is investigating buying a small used aircraft to use in making airborne inspections of its above-ground pipelines. The aircraft would have a useful life of 6 years. The company uses a discount rate of 13% in its capital budgeting. The net present value of the investment, excluding the intangible benefits, is -$475,200. (Ignore income taxes.) Click here to view Exhibit 148-1 and Exhibit 14B-2, to determine the appropriate discount factor(s) using the tables provided. How large would the annual intangible benefit have to be to make the investment in the aircraft financially attractive? (Round your intermediate calculations and final answer to the nearest whole dollar amount.) Multiple Choice $118,859 O $475,200 O$79,200 $61,776

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

The management of Byrge Corporation is investigating buying a small used aircraft to use in making airborne inspections of its above-ground pipelines. The aircraft would have a useful life of 6 years. The company uses a discount rate of 18% in its capital budgeting. The net present value of the investment, excluding the intangible benefits, is -$474,600. (Ignore income taxes.) Click here to view Exhibit 12B-1 and Exhibit 128-2, to determine the appropriate discount factor(s) using the tables provided. How large would the annual intangible benefit have to be to make the investment in the aircraft financially attractive? Multiple Choice O O O $474,600 $135,678 $79,100 $85,428
The management of Byrge Corporation is investigating buying a small used aircraft to use in making airborne inspections of its above-ground pipelines. The aircraft would have a useful life of 5 years. The company uses a discount rate of 12% in its capital budgeting. The net present value of the investment, excluding the intangible benefits, is −$395,450. (Ignore income taxes.) Click here to view Exhibit 12B-1 and Exhibit 12B-2, to determine the appropriate discount factor(s) using the tables provided. How large would the annual intangible benefit have to be to make the investment in the aircraft financially attractive?
The management of Byrge Corporation is investigating buying a small used aircraft to use in making airborne inspections of its above-ground pipelines. The aircraft would have a useful life of 4 years. The company uses a discount rate of 20% in its capital budgeting. The net present value of the investment, excluding the intangible benefits, is -$316,440. (Ignore income taxes.) Click here to view Exhibit 7B-1 and Exhibit 7B-2, to determine the appropriate discount factor(s) using the tables provided. How large would the annual intangible benefit have to be to make the investment in the aircraft financially attractive? (Round your intermediate calculations and final answer to the nearest whole dollar amount.) Multiple Choice $316,440 $122,225 $79,110 $63.288
(Ignore income taxes in this problem.) The management of Rose Corporation is investigating the purchase of a new satellite routing system with a useful life of 7 years. The company uses a discount rate of 8% in its capital budgeting. The net present value of the investment, excluding its intangible benefits, is -$607,020. Required: How large would the additional cash flow per year from the intangible benefits have to be to make the investment in the automated equipment financially attractive?
Croce, Incorporated, is investigating an investment in equipment that would have a useful life of 7 years. The company uses a discount rate of 15% in its capital budgeting. The net present value of the investment, excluding the salvage value, is -$578,977. (Ignore income taxes.) Click here to view Exhibit 12B-1 and Exhibit 12B-2, to determine the appropriate discount factor(s) using the tables provided. How large would the salvage value of the equipment have to be to make the investment in the equipment financially attractive? (Round your intermediate calculations and final answer to the nearest whole dollar amount.) Multiple Choice $3,859,847 O $1,539,832 O $578,977 $86,847
Hypore Darby Park Department is considering a new capital investment. The following information is available on the investment. The cost of the machine will be $348,400. The annual cost savings if the new machine is acquired will be $80,000. The machine will have a 6-year life, at which time the terminal disposal value is expected to be zero. Hypore Park Department is assuming no tax consequences. What is the internal rate of return for Hypore Park Department? Question 6 options: 11% 9% 5% 10%
Mitchell Company is considering an investment in a new machine. Managers at the company are uncertain about the economic life of the machine, because of the speed of innovation in the technology. The machine requires an investment of $1.60 million. After-tax cash flows are estimated to be $455,711 each year the machine is operating (and not obsolete). The company uses a 14 percent discount rate in evaluating capital investments. Use Exhibit A.9. Required: What is the minimum economic life of the machine (in whole years) that would be required for it to have a positive net present value? Required: What is the minimum economic life of the machine (in whole years) that would be required for it to have a positive net present value?
Wary Corporation is considering the purchase of a machine that would cost $335,000 and would last for 5 years. At the end of 5 years, the machine would have a salvage value of $48,000. The machine would reduce labor and other costs by $101,000 per year. The company requires a minimum pretax return of 10% on all investment projects. (Ignore income taxes.) Click here to view Exhibit 14B-1 and Exhibit 14B-2, to determine the appropriate discount factor(s) using the tables provided. Required: Determine the net present value of the project. Note: Round your intermediate calculations and final answer to the nearest whole dollar amount. Net present value
Almendarez Corporation is considering the purchase of a machine that would cost $150,000 and would last for 5 years. At the end of 5 years, the machine would have a salvage value of $18,000. By reducing labor and other operating costs, the machine would provide annual cost savings of $39,000. The company requires a minimum pretax return of 13% on all investment projects. (Ignore income taxes.) Click here to view Exhibit 7B-1 and Exhibit 7B-2, to determine the appropriate discount factor(s) using the tables provided. The net present value of the proposed project is closest to: (Round your intermediate calculations and final answer to the nearest whole dollar amount.) Multiple Choice $(45,000) Q Search (((( |個個
Bryson Sciences is planning to purchase a high-powered microscopy machine for $384,000 and incur an additional $30,800 in installation expenses. It is replacing older microscopy equipment that can be sold for $116,300, resulting in taxes from a gain on the sale of $42,000. Because of this transaction, current assets will increase by $13,000 and current liabilities will increase by $5,200. Calculate the initial investment in the high-powered microscopy machine. The initial investment is $ (Round to the nearest dollar.)
Gulf Air is investigating buying a small used aircraft for the use of its executives. The aircraft would have a useful life of 9 years. The company uses a discount rate of 10% in its capital budgeting. The net present value of the investment, excluding the salvage value of the aircraft, is −$438,840. Management is having difficulty estimating the salvage value of the aircraft. To the nearest whole dollar how large, would the salvage value of the aircraft have to be to make the investment in the aircraft financially attractive? Click here to view Exhibit 14B-1 and Exhibit 14B-2, to determine the appropriate discount factor(s) using the tables provided. $438,840 $1,036,620 $4,388,400 $1,035,000
XYZ is considering investing in a new and cooking machine at an initial cost of $100,000. After close examination of the investment proposal, the firm’s CFO has determined that the expected after-tax cash flows from this operation for the next 5 years will be as followed: Year Cash Flow 1 $10,000 2 $40,000 3 $40,000 4 $40,000 5 $10,000 Under which of the following decision rules will this project be accepted? Which decision rules are associated with a project rejection? Payback Rule; three year cut-off point. Discounted Payback Rule; three year cut-off point; assume that the discount rate, r=7% Internal Rate of Return Rule; 7% required internal rate of return. Net Present Value Rule.(Assume a 5% discount rate) Profitability Index Rule. (Assume a 5% discount rate) The most appropriate rule.