Question 5Abba, Inc is considering the purchase of some new equipment that costs $240700. The new equipment is expected to increase revenues by $96000 annually. Cashexpenses are expected to be $58400 and depreciation expense is $13500. The payback on this equipment isyears.Enter your answer as a whole number rounded to 2 decimal places.

Cash inflows means the amount of cash received by an entity during a period. It includes only cash…

Answered: estion 5 Abba, Inc is considering the…

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

QUESTION 4 Abba, Inc is considering the purchase of some new equipment that costs $191100. The new equipment is expected to increase revenues by $94700 annually. Cash expenses are expected to be $44700 and depreciation expense is $19300. The accounting rate of return of the equipment is % Enter your answer as a whole number rounded to 2 decimal places. If your calculation is .1234, answer as 12.34
QUESTION 1 Malone Corp. is considering the purchase of a new piece of equipment. The cost savings from the equipment would result in an annual increase in cash flow of $46160. The equipment will have an initial cost of $154060 and have a 5-year life. The salvage value of the equipment is estimated to be $22500. Factors to use for n=5, 1 =10% (DO NOT USE ANY OTHER FACTORS OR EQUATIONS) Present Value of an Annuity of $1 3.7908 Present Value of $1 0.6209 Future Value of an Annuity of $1 6.1051 Future Value of $1 1.6105 If the hurdle rate is 10%, what is the approximate net present value? Ignore income taxes.
QUESTION 3 Warren Corp. is considering the purchase of a new piece of equipment. The cost savings from the equipment would result in an annual increase in net income after tax of $47600. The equipment will have an initial cost of $170000 and have an 8 year life and no salvage value of the equipment. What is the payback period? Round your answer 2 decimals
Question 2. I have purchased a machine worth ₱1,893,877.00. And it needs maintenance every 6 months starting from its purchased date for the first 10 years of its useful life. The maintenance cost is equivalent to the 2% of the total machine cost. How much money should be prepare today to finance the requirement if the interest rate is 0.10 compounded quarterly?
Question 4: You have a opportunity to make a investment that has $10.000,000 landing, 1.500.000 machine, outsourcing 500.000 and finance cost 1.000.000. Machines have no scrap value at end of 4th year. You will pay interest payment at the end of 4rd year, that is $500.000. If you make this investment now, you will receive $4.500,000 one year from today, $3.000,000, $5.000,000 and $ 4.000,000 respectively. The appropriate discount rate for this investment is 14 percent. Tax rate is % 30. Should you make the investment? Why?
QUESTION 4 Max Corp. is considering the purchase of a new piece of equipment. The cost savings from the equipment would result in an annual increase in cash flow of $58540. The equipment will have an initial cost of $190150 and have a 5-year life. The salvage value of the equipment is estimated to be $23100. Factors to use for n=5, 1=10% (DO NOT USE ANY OTHER FACTORS OR EQUATIONS) Present Value of an Annuity of $1 Present Value of $1 3.7908 0.6209 6.1051 1.6105 Future Value of an Annuity of $1 Future Value of $1 If the hurdle rate is 10%, what is the approximate net present value? Ignore income taxes.
A business is considering purchasing a piece of new equipment for $200,000. The equipment will generate the following revenues: Year 1: $50,000Year 2: $50,000Year 3: $50,000Year 4: $60,000The machine can be sold at the end of the year four for $25,000. Assume a discount of 8%. 1. What is the net present value(NPV)?
Question #4: You want to buy a new machine. It's going to cost $200,000 and have a salvage value of $15,000 after 7 years. Annual operating costs are $75,000. It also costs $5000 a year to employ an operator for the machine. If at year 0 you sell your current machine for $3,000 and purchase the new machine, how much will you need to generate in revenue to make a 12% rate of return?
a Moving to another question will save this response. Question 1 of Question 1 Save Awe A company purchased a AC system for $49,855 which requires $8,755 per year maintenance fees for the first 5 years, after which the maintenance fees will increase by 12% per year for the upcoming 7 years. Determine the equivalent total present worth value of purchased system during the 12 years operation ati = 15% per year.
Riordan Manufacturing is considering an investment in new equipment that will produce equal annual cash flows of $52,000 for 8 years and has a net present value of $94,182. The initial investment is $247,000, the useful life is 8 years, and the equipment's salvage value after 8 years is $26,000. What is the equipment's profitability index? Round your answer to two decimal places. 6.56 1.38 4.75 1.81
A business is considering purchasing a piece of new equipment for $200,000. The equipment will generate the following revenues: Year 1: $50,000Year 2: $50,000Year 3: $50,000Year 4: $60,000The machine can be sold at the end of the year four for $25,000. Assume a discount of 8%. 2. What is the compounded return(IRR) for this project?
Question 9: You have a opportunity to make a investment that has $10.000,000 landing, 1.500.000 machine, outsourcing 500.000 and finance cost 1.000.000. Machines have 1.000.000 scrap value at end of 5th year. You will pay interest payment at the end of project, that is $400.000. If you make this investment now, you will receive $4.500,000 one year from today, $3.000,000, $5.000,000 and $ 4.000,000 respectively. The appropriate discount rate for this investment is 15 percent. Tax rate is % 30. Should you make the investment?

SEE MORE QUESTIONS

Recommended textbooks for you

FINANCIAL ACCOUNTING

Accounting

ISBN:

9781259964947

Author:

Libby

Publisher:

MCG

Accounting

ISBN:

9781337272094

Author:

WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Publisher:

Cengage Learning,

Accounting Information Systems

Accounting

ISBN:

9781337619202

Author:

Hall, James A.

Publisher:

Cengage Learning,

FINANCIAL ACCOUNTING

Accounting

ISBN:

9781259964947

Author:

Libby

Publisher:

MCG

Accounting

ISBN:

9781337272094

Author:

WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Publisher:

Cengage Learning,

Accounting Information Systems

Accounting

ISBN:

9781337619202

Author:

Hall, James A.

Publisher:

Cengage Learning,

Horngren's Cost Accounting: A Managerial Emphasis…

Accounting

ISBN:

9780134475585

Author:

Srikant M. Datar, Madhav V. Rajan

Publisher:

PEARSON

Intermediate Accounting

Accounting

ISBN:

9781259722660

Author:

J. David Spiceland, Mark W. Nelson, Wayne M Thomas

Publisher:

McGraw-Hill Education

Financial and Managerial Accounting

Accounting

ISBN:

9781259726705

Author:

John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS