The current value of the building is estimated to be $300,000. Assume the company uses straight-line . Assume Peng requires a 15% return on its investments. The investment costs $54,900 and has an estimated $8,100 salvage value. Common stock. The net present value of the investment is $-1,341.55. Jimmy Co. seeks to earn an average rate of return of 18% on all capital projects. The present value of the future cash flows, at the company's desired rate of re, E company is a lessee with a capital lease. Furthermore, the implication of strategic orientation for . S4 000 per year for 6 years accumulates to $29,343.60 ($4,000 7.3359). The investment costs $45,000 and has an estimated $6,000 salvage value. $ $ Accounting Rate of Return Choose . Management estimates the machine will yield an after-tax net income of $12,500 each year. Peng Company is considering an investment expected to generate an average net income after taxes of $3,500 for three years. What is the investment's payback period? Assume the company uses straight-line depreciation (PV of $1. Management predicts this machine has a 10-year service life and a $100,000 salvage value, and it uses straight-line depreciation. If the accounting rate of return is 12%, what was the purchase price of the mac. A company's required rate of return on capital budgeting is 15%. The equipment has a useful life of 5 years and a residual value of $60,000. The business environment, namely market uncertainty and competition intensity, is also analysed in association with the firm's strategic orientation. The following data concerns a proposed equipment purchase: Cost $136,400 Salvage value $3,600 Estimated useful life 4 years Annual net cash flows $45,700 Depreciation method Straight-line The annual average investment amount used to calculate the accounti, Landmark Company is considering an investment in new equipment costing $500,000. Required intormation Use the following information for the Quick Study below. X Compute the accounting rate of return for this investment; assume the company uses straight-line depreciation. They first apply the real options approach to assess the investment values as well as the distribution of energies such as biomass, coal, natural . Compute the accounting rate of return for this investment; assume the company uses straight-line depreciation. Solved Peng Company is considering an investment expected to - Chegg (PV of. Compute. The investment costs $52,200 and has an estimated $9,000 salvage value. What are the investment's net present value and inte. Cost Accounting Quiz Week 11.pdf - [The following You have the following information on a potential investment. Enter the email address you signed up with and we'll email you a reset link. To help in this, compute the cost of capital for the firm for the following: a. Best study tips and tricks for your exams. The company uses the straight-line method of depreciation and has a tax rate of 40 percent. #12 Peng Company is considering an investment expected to generate an average net income after taxes of $2,900 for three years. 94% of StudySmarter users get better grades. Melton Company's required rate of return on capital budgeting projects is 16%. Experts are tested by Chegg as specialists in their subject area. After inputting the value, press enter and the arrow facing a downward direction. The product line is estimated to generate cash inflows of $300,000 the first year, $250,000 the second year, and $200,000 each year thereafter for ten more years. A bond that has a $1,000 par value (face value) and a con, Strauss Corporation is making a $70,000 investment in equipment with a 5-year life. 76,000 b. This site is using cookies under cookie policy . Ignoring taxes, what is the most that the company would be willing to in, Strauss Corporation is making a $89,600 investment in equipment with a 5-year life.The company uses the straight-line method of depreciation and has a tax rate of 40 percent.The company's required rat, Strauss Corporation is making a $89,750 investment in equipment with a 5-year life.The company uses the straight-line method of depreciation and has a tax rate of 40 percent.The company's required rat, Strauss Corporation is making a $91,950 investment in equipment with a 5-year life. The Galley purchased some 3-year MACRS property two years ago at Required information (The following information applies to the questions displayed below.] A company has two investment choices that cost $3,000 each: one that brings in $10,000 in revenue at 8% interest in two years, and another that brings in $11,000 revenue at the same interest rate . What is the present value, Strauss Corporation is making a $91,800 investment in equipment with a 5-year life. Yea, A company projects an increase in net income of $40,000 each year for the next five years if it invests $500,000 in new equipment. The company anticipates a yearly net income of $3,300 after taxes of 30%, with the cash flows to be rece, A company bought a machine that has an expected life of seven years and no salvage value. The investment costs $59,400 and has an estimated $7,200 salvage value. The company's desired rate of return used in the present value calculations was, A company is considering investment in a project that costs Rs. The investment costs $47,400 and has an estimated $8,400 salvage value. Compute the net present value of this investment. The investment is expected to return the following cash flows, discounts at 8%. a) construct an influence diagram that relates these variables These assets contribute $28,000 to annual net income when depreciation is computed on a straight-line basis. Option 1 generates $25,000 of cash inflow per year and has zero residual value. What is the payback period in years ap, The Montana Company has decided to invest in a project that is expected to produce the following cash flows: $12,500 (year 1), $14,000 (year 2) and $9,000 (year 3). Average invested assets are $500,000, and Avocado Company has an 8% cost of capital. The company uses the straight-line method of d, Determine Present Value: You can invest in a machine that costs $500,000. negative? The investment costs $48,600 and has an estimated $6,300 salvage value. Calculate the payback period for the proposed e, You have the following information on a potential investment. Assu, Peng Company is considering an investment expected to generate an average net income after taxes of $3,000 for three years. 2003-2023 Chegg Inc. All rights reserved. At a discount rate of 10 per, Zippydah Company has the following data at December 31, 2014. Assume Peng requires a 10% return on its investments. should purchase a used Caterpillar mini excavator, A) The distribution of exam scores for Statistics is normally (Solved) - QS 11-8 Net present value LO P3Peng Company is considering (Get Answer) - Peng Company is considering buying a machine that will Compute the net present value of this investment. The company uses the straight-line method of depreciation and has a tax rate of 40 percent. Compu, Pong Company is considering an investment expected to generate an average net income after taxes of $3,500 for three years. Capital investment - $100,000 Estimated useful life - 3 years Estimated salvage value - zero Estimated net cash inflow Year 1 - $50,000 Year 2 - $47,000 Year 3 - $44,000 Required rate, You have the following information on a potential investment: Capital Investment - $100,000 Estimated useful life - 3 years Estimated salvage value - zero Estimated net cash inflow: Year 1 - $50,000 Y, Lt. Dan Corporation invested $90,000 in manufacturing equipment. For l6, = 8%), the FV factor is 7.3359. b) Ignores estimated salvage value. The investment costs $45,600 and has an estimated $6,600 salvage value Compute the accounting rate of return for this investment, assume the company uses straight-line depreciation. Fair value method c. Historical cost m, Blue Fin Inc. requires all capital investments to generate a minimum internal rate of return of 15%. What rate of return should you expect for your investment in Fir, If a company owns more than 20% of the stock of another company and the stock is being held as a long-term investment, which method would the investor normally use to account for this investment? Assume Peng requires a 5% return on its investments. A company is deciding to invest in a new project at a cost of $2 million dollars. Required information The following information applies to the questions displayed below Peng Company is considering an investment expected to generate an average net income after taxes of $3,500 for three years. (FV of |1, PV of $1, FVA of $1 and PVA of $1). The salvage value of the asset is expected to be $0. Peng Company is considering an investment expected to generate an average net income after taxes of $1,950 for three years. Equity method b. Peng Company is considering an investment expected to generate an average net income after taxes of $1,950 for three years. (1) Determine whet, Lt. Dan Corporation invested $80,000 in a manufacturing equipment. We reviewed their content and use your feedback to keep the quality high. 17 US public . The salvage value of the asset is expected to be $0. The company uses the straight-line method of depreciation and has a tax rate of 40 percent. It is considering investing in a project that costs $50,000 and is expected to generate cash inflows of $20,000 at the end of each year for 3 years. Capital investment: $15,000 Estimated useful life: 3 years Estimated salvage value: zero Estimated net cash inflow Year 1: $7,000 Year 2: You have the following information on a potential investment. Peng Company is considering an Investment expected to generate an The payback period for this investment is: a) 3.9 years b) 3 years, Hung Company accumulates the following data concerning a proposed capital investment: cash cost of $216, 236, net annual cash flows of $43,800, and present value factor of cash inflows for 10 years 5.22 (rounded). What is the accounting rate of return? X Peng Company is considering an investment expected to generate an average net income after taxes of $2,000 for three years. Assume Peng requires a 5% return on its investments. The Controller asks you to use a depreciation method that would produce the highest charge against income after three years. Capital investment $180,000 Estimated useful life 3 years Estimated salvage value 0 Estimated annual net cash inflow $75,000 Required rate of return 10% What is the net present value of the inv, If an asset costs $210,000 and is expected to have a $30,000 salvage value at the end of its 10-year life, and it generates annual net cash inflows of $30,000, the cash payback period is: a. In the next using the GC how can i determine the ratio of diastereomers. Assume Peng requires a 5% return on its investments. The cost of the asset is $700,000 and it will be depreciated using s, The MoMi Corporation's income before interest, depreciation and taxes, was $1.7 million in the year just ended, and it expects that this will grow by 5% per year forever. Compute the net present value of this investment. The company is considering an investment that would yield a cash flow of $12,000 per year for five years. Peng Company is considering an investment expected to generate an Peng Company is considering an investment expected to generate an average net income after taxes of $3,300 for three years. Capital investment - $15,000 Estimated useful life - 3 years Estimated salvage value - zero Estimated net cash inflow: -Year 1 - $7,00, Compute the net present value of each potential investment. Calculate its book value at the end of year 6. Peng Company is considering an investment expected to generate an average net income after taxes of $1,950 for three years. Negative amounts should be indicated by a minus sign.) Compute the net present value of this investment. Capital investment $900,000 Estimated useful life 6 years Estimated salvage value zero Estimated annual net cash inflow $213,000 Required, Sparky Company invested in an asset with a useful life of 5 years. Assume Peng requires a 15% return on its investments. For example: What is the future value of $4,000 per ye ar for 6 years assuming an annual interest rate of 8%. Assume Peng requires a 15% return on its investments. Experts are tested by Chegg as specialists in their subject area. The building is expected to generate net cash inflows of $20,000 per year for the next 30 years. d) Provides an, Dango Corporation is reviewing an investment proposal. The company anticipates a yearly net income of $3,800 after taxes of 16%, with the cash flows to be received evenly throughout each year. a) 2.85%. distributed with a mean of 78 when mixing oil and water is the change in entropy positive or Present value The machine will cost $1,800,000 and is expected to produce a $200,000 after-tax net income to be rece, A company can buy a machine that is expected to have a three-year life and a $25,000 salvage value. investment costs $51,600 and has an estimated $10,800 salvage , e following two costs of production, respectively: (1) the paper; and (2) the authors' one-time fees. Assume Peng requires a 10% return on its investments, compute the net present value of this investment. Accounting Rate of Return Choose Numerator: Choose Denominator: Accounting Rate of Return nnual after-tax net incomeAnnual average investentAccounting rate of return 3,500S 27,1501= 12.891 % using C++ Peng Company is considering an investment expected to generate an The investment costs $56,100 and has an estimated $7,500 salvage value. 2.72. projected GROSS cash flows from the investment are $150,000 per year. $2,000 per year for 10 years is the equivalent of $12,835 today ($2,000 6.4177) TABLE B.3 Present Value of an Annuity of 1 Rat Periods 1% 2% 4% 5% 6% 7% 5% 10% 12% 15% 0.9901 0.9804 0.9709 0.9615 0.9524 0.9434 0.9346 0.9259 0.9174 0.9091 0.8929 0.8696 1.9704 1.9416 1.9135 1.88611.8594 1.8334 8080 1.7833 1.759 .7355 16901 1.6257 2.9410 2.8839 2.8286 2.7751 2.7232 2.6730 2.6243 2.5771 2.5313 2.4869 2.4018 2.2832 3.9020 3.8077 3.7171 3.6299 3.5460 3.4651 3.3872 3.3121 3.2397 3.1699 3.0373 2.8550 3.9927 3.8897 3.7908 3.6048 3.3522 5.7955 5.6014 5.4172 5.2421 5.0757 4.9173 4.7665 4.6229 4.4859 4.3553 4.1114 3.7845 5.3893 5.2064 5.0330 4.8684 4.5638 4.1604 7.6517 7.3255 7.0197 6.73276.4632 6.2098 5.9713 5.7466 5.5348 5.3349 4.9676 4.4873 8.5660 8.1622 7.7861 7.4353 7.1078 6.8017 6.5152 6.2469 5.9952 5.7590 5.3282 4.7716 9.4713 8.9826 8.5302 8.1109 7.7217 7.3601 7.0236 6.7101 6.4177 6.1446 5.6502 5.0188 7.1390 6.8052 6.4951 5.93775.2337 11.255 10.5753 9.95409.3851 8.8633 8.3838 7.9427 7.5361 7.1607 6.8137 6.1944 5.4206 12.1337 11.3484 10.6350 9.9856 9.3936 8.8527 8.3577 7.9038 7.4869 7.1034 6.4235 5.5831 13.0037 12.1062 11.2961 10.5631 9.8986 9.2950 8.7455 8.2442 7.7862 7.3667 6.6282 5.7245 13.8651 .8493 11.9379 11.1184 10.3797 9.7122 9.1079 8.5595 8.0607 7.6061 6.8109 5.8474 14.7179 13.5777 12.5611 11.6523 10.8378 10.1059 9.4466 8.8514 8.3126 7.8237 6.9740 5.9542 15.5623 14.2919 13.1661 12.1657 11.2741 10.4773 9.7632 9.1216 8.5436 8.0216 7.1196 6.0472 16.3983 14.9920 13.7535 12.6593 11.6896 10.8276 10.0591 9.3719 8.7556 8.2014 7.2497 6.1280 17.2260 15.6785 14.3238 13.1339 12.0853 11.1581 10.3356 9.6036 8.9501 8.3649 7.3658 6.1982 18.0456 16.3514 14.8775 13.5903 12.4622 11.4699 10.5940 9.8181 9.1285 8.5136 7.4694 6.2593 22.0232 19.5235 17.4131 15.6221 14.0939 12.7834 11.6536 10.6748 9.8226 9.0770 7.8431 6.4641 25.8077 22.3965 19.6004 17.2920 5.3725 13.7648 12.4090 11.2578 10.2737 9.4269 8.0552 6.5660 29.4086 24.9986 21.4872 18.6646 16.3742 14.4982 12.9477 11.6546 10.5668 9.6442 8.1755 6.6166 32.8347 27.3555 23.1148 19.7928 17.1591 15.0463 13.3317 11.9246 10.7574 9.7791 8.2438 6.6418 4.8534 4.7135 4.57974.4518 4.3295 4.2124 4.1002 6.7282 6.4720 6.2303 6.0021 5.7864 5.5824 10.3676 9.7868 26 8.7605 8.3064 7.8869 7.4987 12 13 14 15 16 19 20 25 30 35 40 Used to calculate the present value of a series of equal payments made at the end of each period. Amount The investment costs $59,500 and has an estimated $9,300 salvage value. Yokam Company is considering two alternative projects. Compute this machine's accou, A machine costs $300,000 and is expected to yield an after-tax net income of $9,000 each year. Assume Peng requires a 5% return on its investments. Peng Company is considering an investment expected to generate an average net income after taxes of $3,100 for three years. Accounting Rate of Return Choose Denominator: Choose Numerator: 7 = Accounting Rate of Return = Accounting rate of return, Required information [The following information applies to the questions displayed below.] The system, A machine costs $700,000 and is expected to yield an after-tax net income of $30,000 each year. The investment costs $45,000 and has an estimated $6,000 salvage value. Compute this machine s accoun, A machine costs $700,000 and is expected to yield an after-tax net income of $52,000 each year. Peng Company is considering an investment expected to generate an average net income after taxes of $1,950 for three years. First we determine the depreciation expense per year. View some examples on NPV. = The company anticipates a yearly net income of $3,650 after taxes of 22%, with the cash flows to be received evenly throughout each year. d. Loss on investment. What is the accounti, A company buys a machine for $70,000 that has an expected life of 6 years and no salvage value. The net cash flows are estimated to be $7,610 per year for the next 5 years and no salvage value is anticipated. Assume the company uses straight-line depreciation. The annual depreciation cost is 10% of fixed capital investment. You can specify conditions of storing and accessing cookies in your browser, Peng Company is considering an investment expected to generate an average net income after taxes of $2,600 for three years. The asset is recorded at $810,000 and has an economic life of eight years. TABLE B.1 Present Value of 1 Rate Perlods 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 12% 15% 0.9901 0.9804 0.9709 0.9615 0.9524 0.9434 0.9346 0.9259 0.9174 0.9091 0.8929 0.8696 0.9803 0.9612 0.9426 0.9246 0.9070 0.8900 0.8734 0.8573 0.8417 0.8264 0.7972 0.7561 0.9706 0.9423 0.9151 0.8890 0.8638 0.8396 08163 .793 0.7722 7513 7118 06575 0.9610 0.9238 0.8885 0.8548 0.8227 0.7921 0.7629 0.7350 0.7084 0.6830 0.6355 0.5718 0.9515 0.9057 0.8626 0.8219 0.7835 0.7473 0.7130 0.6806 0.6499 0.6209 0.5674 0.4972 0.9420 0.8880 0.8375 0.7903 0.7462 0.7050 0.6663 0.6302 0.5963 0.5645 0.5066 0.4323 0.9327 0.8706 0.8131 0.7599 0.7107 0.6651 0.6227 0.5835 0.5470 0.5132 0.4523 0.3759 0.9235 0.8535 0.7894 0.7307 0.6768 0.6274 0.5820 0.5403 0.5019 0.4665 0.4039 0.3269 0.9143 0.8368 0.7664 0.7026 0.6446 0.5919 0.5439 0.5002 0.4604 0.4241 0.3606 0.2843 0.9053 0.8203 0.7441 0.6756 0.6139 0.5584 0.5083 0.4632 0.4224 0.3855 0.3220 0.2472 0.8963 0.8043 0.7224 0.6496 0.5847 0.5268 0.4751 0.4289 0.3875 0.3505 0.2875 0.2149 0.8874 0.7885 0.7014 0.6246 0.5568 0.4970 0.4440 0.3971 0.3555 0.3186 0.2567 0.1869 0.8787 0.7730 0.6810 0.6006 0.5303 0.4688 0.4150 0.3677 0.3262 0.2897 0.2292 0.1625 0.8700 0.7579 0.6611 0.5775 0.5051 0.4423 0.3878 0.3405 0.2992 0.2633 0.2046 0.1413 0.8613 0.7430 0.6419 0.5553 0.4810 0.4173 0.3624 0.3152 0.2745 0.2394 0.1827 0.1229 0.8528 0.7284 0.6232 0.5339 0.4581 0.3936 0.3387 0.2919 0.2519 0.2176 0.1631 0.1069 0.8444 0.7142 0.6050 0.5134 0.4363 0.3714 0.3166 0.2703 0.2311 0.1978 0.1456 0.0929 0.8360 0.7002 0.5874 0.4936 0.4155 0.3503 0.2959 0.2502 0.2120 0.1799 0.1300 0.0808 0.8277 0.6864 0.5703 0.4746 0.3957 0.3305 0.2765 0.2317 0.1945 0.1635 0.1161 0.0703 0.8195 0.6730 0.5537 0.4564 0.3769 0.3118 0.2584 0.2145 0.1784 0.1486 0.1037 0.0611 0.7798 0.6095 0.4776 0.3751 0.2953 0.2330 0.1842 0.1460 0.1160 0.0923 0.0588 0.0304 0.7419 0.5521 0.4120 0.3083 0.2314 0.174 0.1314 0.0994 0.0754 0.0573 0.0334 0.0151 0.7059 0.5000 0.3554 0.2534 0.1813 0.1301 0.0937 0.0676 0.0490 0.0356 0.0189 0.0075 0.6717 0.4529 0.3066 0.2083 0.1420 0.0972 0.0668 0.0460 0.0318 0.0221 0.0107 0.0037 9 10 12 13 14 15 16 18 19 20 25 30 35 40 * Used to compute the present value of a known future amount.