accounting rate of return
Q: A construction company is considering procuring one of two types of heavy construction equipment (A…
A: Here in this question, Payback period, benefit cost ratio , Project to be selected and the…
Q: Carbon plc is planning to buy a new machine with an expected life of five years. The machine would…
A: Before investing in a new project, feasibility of the project is evaluated by using various methods…
Q: A machine has an initial cost of $30,000, labor annual cost of $37,000, maintenance annual cost of…
A:
Q: Determine, the number of years the machine must be used to obtain payback at MARR values of, 0%, 8%…
A: The most commonly used capital budgeting technique for evaluating capital expenditure proposals is…
Q: Jark Corporation has invested in a machine that cost $58,000, that has a useful life of five years,…
A: Payback period is calculated as initial investment divided by annual net cash flows.
Q: The Comil Corporation recently purchased a new machine for its factory operations at a cost of…
A: Calculate present value factor.
Q: GoHigher is planning to purchase a machine that will cost $24,000. It has a six-year life with no…
A: The payback period is the number of periods in which the initial investment will be recovered. It…
Q: A business firm is contemplating to purchase new equipment. The purchase price is 60,000 and its…
A: The question pertains to the concept of capital budgeting tools and time value of money and has been…
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: A machine can be purchased for $60,000 and used for five years, yielding the following net incomes.…
A: Payback period refers to the time period that is required to recover the initial cost. With the help…
Q: Crazy Carnival Industries is thinking of purchasing a machine that will produce plastic junkanoo…
A: Accounting rate of return(ARR): It is the return or rate of profit that the entity would earn for…
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: A new machine costs $160 000, has a useful life of 10 years, and can be sold for $15 000 at the end…
A: Note: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question…
Q: Vandezande Inc. is considering the acquisition of a new machine that costs $461,000 and has a useful…
A: Cumulative cash flows Year 1 =Cash inflow-Initial inventment=$149,000-$461,000=-$312,000
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: Lovewell Limited a food manufacturer is considering purchasing a new machine for £275,000. The…
A: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question and…
Q: a company can buy a machine that is expected to have a three-year life and a 30,000 salvage value.…
A: Net Present Value: It is the present worth today of the project having the initial cost and annual…
Q: A machine costs $700,000 and is expected to yield an after-tax net income of $30,000 each year.…
A:
Q: a. A new operating system for an existing machine is expected to cost $710,000 and have a useful…
A: a.Compute the net present value of investment “a”.
Q: Covington Corporation purchased a vibratory finishing machine for $22,000 in year 0. The useful life…
A: The capital budgeting method uses various methods to decide whether a project should be accepted or…
Q: APJ, Inc. is planning to purchase a new machine that will take six years to recover the cost. The…
A: PAYBACK PERIOD = INTIAL INVESTMENT / CASH FLOW PER YEAR SO , INITIAL INVESTMENT = CASH FLOW PER…
Q: A new absorption chiller system costs $360,000 and will save $52,500 in each of the next 12 years.…
A:
Q: Rooney, Incorporated is considering the purchase of a new machine costing $700,000. The machine's…
A: Rooney is considering the purchase of new machine. The decision as to whether the machine should be…
Q: A drill press was purchased 4 years ago for $40,000. Its estimated salvage value after 7 years was…
A: Purchase price- $40,000 with various sale price Salvage value after 7 years- $5000 Annual operating…
Q: An industrial organization has established an automated assembly line (for $240,000) that will…
A: a) Before Tax Cash Flow (BTCF) and After-Tax Cash Flow (ATCF) can be computed as follows: Result…
Q: If an asset costs $65,000 and is expected to have a $5,000 salvage value at the end of its ten-year…
A: Cash payback period = Initial investment /annual cash inflow
Q: Jason Corporation has invested in a machine that cost $80,000, that has a useful life of eight…
A: Given: Particulars Amount Initial cost $80,000 Use life 8 Payback period 5
Q: Henerhiya Co. is planning to buy a machine costing P84,000 to be depreciated on the straight-line…
A: The payback bailout is the length of time required to recover the cost of Investment through cash…
Q: a. The Payback Period. b. The Accounting Rate of Return. c. The Net Present Value. d. The…
A:
Q: Enerlam Company purchased a machine with an estimated useful life of seven years. The machine will…
A: Net present value = Present value of future cash inflows- initial investment
Q: Assume that a company purchased a new machine for $26,000 that has no salvage value. The machine is…
A:
Q: Eastern corporation replace an old vibratory finishing machine and purchased new machine for $…
A: Net present value means the difference between the present value of cash inflow and present value of…
Q: Priscila Eunice Co. is interested in purchasing a state-of-the-art packaging machine for its…
A: Net present value is the difference between present value of all cash inflows and initial investment…
Q: Lovewell Limited a food manufacturer is considering purchasing a new machine for£275,000. The…
A: Compute the payback period (PBP), using the equation as shown below: Hence, the PBP is 3.79…
Q: A machine can be purchased for $150,000 and used for five years, yielding the following net incomes.…
A: Definition: Cash payback method: The cash payback period is the expected time period which is…
Q: A machine can be purchased for $150,000 and used for five years, yielding the following net incomes.…
A: Payback period: It can be defined as the time that is taken by an investment before it starts…
Q: a. A new operating system for an existing machine is expected to cost $520,000 and have a useful…
A: We need to add back annual depreciation to after tac profits, so that we are able to determine the…
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: Vandezande Inc. is considering the acquisition of a new machine that costs $467,000 and has a useful…
A: Payback is a capital budgeting tool which is used to find the time required to recover the invested…
Q: The Lana company is planning to purchase a machine known as machine D. Machine D would cost $ 28580…
A: Pay back period =intial investment / annual cash flow=28580/9529 =2.999(or 3 years)
Q: Denver Company buys a machine for $65,000 that has an expected life of 4 years and no salvage value.…
A: Answer: 9.54%
Q: The cost of a new machine is $250,000) The machine has a 3-year life and no salvage value) If the…
A: Using the excel for cumulative table
Q: ue. The cash flows that would be produced by the machine are (Ignore income taxes): Net Cash…
A: Payback period is the period within which the initial investment is recovered . It is the time taken…
Q: Sussman industries purchased a drilling machine for $50,000 and paid cash. Sussman expects to use…
A: Sussman industries purchased a drilling machine for $50,000 and paid cash.Part (A)So, the cash flow…
Q: A machine has a first cost of PhP 800,000 and a salvage value of PhP 50,000 at the end of its life…
A: Return means earn additional on invested amount over the period. It shows excess cash inflow over…
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…
a manufacturing company bought a new machine for $150,000. the machine will last ten years and will be depreciated using the straight-line method. the estimate salvage value of the machineis zero and should generate a yearly
Requirement: what is the accounting
Step by step
Solved in 4 steps
- Taos Productions bought a piece of equipment for $79,860 that will last for 5 years. The equipment will generate net operating cash flows of $20,000 per year and will have no salvage value at the end of its life. What is the internal rate of return?Cinemar Productions bought a piece of equipment for $55,898 that will last for 5 years. The equipment will generate net operating cash flows of $14,000 per year and will have no salvage value at the end of its life. What is the internal rate of return?Although the Chen Company’s milling machine is old, it is still in relatively good working order and would last for another 10 years. It is inefficient compared to modern standards, though, and so the company is considering replacing it. The new milling machine, at a cost of $110,000 delivered and installed, would also last for 10 years and would produce after-tax cash flows (labor savings and depreciation tax savings) of $19,000 per year. It would have zero salvage value at the end of its life. The project cost of capital is 10%, and its marginal tax rate is 25%. Should Chen buy the new machine?
- The Scampini Supplies Company recently purchased a new delivery truck. The new truck cost $22,500, and it is expected to generate net after-tax operating cash flows, including depreciation, of $6,250 per year. The truck has a 5-year expected life. The expected salvage values after tax adjustments for the truck are given here. The company’s cost of capital is 10%. Should the firm operate the truck until the end of its 5-year physical life? If not, then what is its optimal economic life? Would the introduction of salvage values, in addition to operating cash flows, ever reduce the expected NPV and/or IRR of a project?Teja International is determining the cash flows for a project involving replacement of an old machine by a new machine. The old machine bought a book value of 7800,000 and it can be sold to realise a post-tax salvage value of 7900,000. It has a remaining life of five years after which its net salvage value is expected to be 200,000. It is being depreciated annually at a rate of 25 percent under the WDV method. few years ago has a The new machine costs 3,000,000. It is expected to fetch a net salvage value of 71,500,000 after five years. The depreciation rate applicable to it is 25 percent under the WDV method. The new machine is expected to bring a saving of 7650,000 annually in manufacturing costs (other than depreciation). The incremental working capital associated with this machine is 500,000. The tax rate applicable to the firm is 30 percent. (a) Estimate the cash flow associated with the replacement project. (b) What is the NPV of the replacement project if the cost of capital is…The Lana company is planning to purchase a machine known as machine D. Machine D would cost $ 28580 and would have a useful life of 5 years with zero salvage value. The expected annual cash inflow of the machine is $ 9529. Answer:
- A business firm is contemplating to purchase new equipment. The purchase price is 60,000 and its annual operating cost is 2,675.4. The machine has a life of 7 years and is expected to generate 15,000 in revenues in each year of its life. Determine the internal rate of return of the machine, assuming zero salvage value.A machine can be purchased for $150,000 and used for five years, yielding the following net incomes. In projecting net incomes, straight-line depreciation is applied using a five-year life and a zero salvage value. Compute the machine’s payback period (ignore taxes). (Round the payback period to three decimals.)A project has to sell a machine that is obsolete. The market department finds a buyer who is willing to pay $100, 000 for the machine. The machine was purchased 4 years ago for $1.1 million. The accounting department notes that the depreciation method for this machine is straight line, and the machine will be depreciated to zero over a five year time period after purchase. What is the machine's after - tax salvage value? Tax rate is 21%. Question 1 options: $1, 635.24 $2, 314.05 $142,000.00 - $2,784.62$289.26
- Lexus Company is planning to purchase an new machine for the amount of P90,000, with an estimated useful life of 5 years and a salvage value of P10,000. The machine will be depreciated using the straight line method. The machine is expected to produce cash flows from operations, net of income taxes of P36,000 a year in the next 5 years. The machine's salvage value is P20,000 in years 1 and 2 and P15,000 in years 3 and 4. What will be the bailout period for the new machine? A. 1.4 years B. 2.2 years C. 1.9 years D. 3.4 yearsA machine has a first cost of $10,000 and an expected salvage value of $900 when it is sold. Annually, the operating cost is $500, and the revenue generated from sales is $2,500. What is the payback period assuming a MARR of 20% per year, an effective tax rate of 15%, and straight line depreciation over 5 years taking into account the salvage value (note, even though the machine might be fully depreciated down to its salvage value for tax purposes, assume the machine can continue to operate forever and that it will never be sold).A management company is considering purchasing a $27,000 machine that would reduce operating costs by $7,000 per year. At the end of the 5 years of the machine's useful life, it will be zero salvage value. The company requires a rate of return of 12%. 1. Determine the net present value of the investment of the machine? 2.What is the difference between the total, undiscounted cash inflows and cash outflows over the entire life of the machine?
