please answer in text form and in proper format answer with must explanation , calculation for each part and steps clearly Information for two alternative projects involving machinery investments follows. Project 1 requires an initial investment of $268,000.Project 2 requires an initial investment of $170,000.Annual AmountsSales of new productExpensesMaterials, labor, and overhead (except depreciation)Depreciation-MachinerySelling, general, and administrative expensesIncome(a) Compute each project's annual net cash flow.(b) Compute payback period for each investment.Project 1$ 180,000Project 2$ 160,00085,00052,00040,00028,00038,00040,000$ 27,000$ 30,000Complete this question by entering your answers in the tabs below.Required A Required BCompute each project's annual net cash flow.Annual AmountsSales of new productExpensesProject 1Project 2IncomeCash FlowIncomeCash Flow$180,000$160,000Materials, labor, and overhead (except depreciation)85,000Depreciation-Machinery40,000Selling, general, and administrative expenses28,000Income$27,000Net cash flow$< Required A52,00038,00040,000$30,0000$0Required B>Assessment Tool iFrame

(A) Computation of each project's annual net cash flows: Expected Net Cash Flows - Project 1…

Answered: Information for two alternative…

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

Information for two alternative projects involving machinery Investments follows. Project 1 requires an initial Investment of $256,500. Project 2 requires an initial Investment of $174,000. Annual Amounts Sales of new product Expenses Materials, labor, and overhead (except depreciation) Depreciation-Machinery Selling, general, and administrative expenses Income (a) Compute each project's annual net cash flow. (b) Compute payback period for each Investment. Required A Required B Compute each project's annual net cash flow. Complete this question by entering your answers in the tabs below. Annual Amounts Sales of new product Expenses Materials, labor, and overhead (except depreciation) Depreciation Machinery Selling, general, and administrative expenses Income Net cash flow $ $ Income Project 1 160,000 Project 1 $ 160,000 80,000 35,000 23,000 22,000 80,000 35,000 23,000 $ 22,000 Cash Flow $ $ Project 2 $ 140,000 47,000 33,000 35,000 $ 25,000 Income Project 2 140,000 47,000 33,000 35,000…
Information for two alternative projects involving machinery investments follows. Project 1 requires an initial investment of $132,300. Project 2 requires an initial investment of $99,000. Assume the company requires a 10% rate of return on its investments. (PV of $1. FV of $1. PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.) Annual Amounts Sales of new product Expenses Materials, labor, and overhead (except depreciation) Depreciation Machinery Selling, general, and administrative expenses Income Years 1-7 Project 1 Net present value Years 1-5 Compute the net present value of each potential investment. Use 7 years for Project 1 and 5 years for Project 2. (Negative net present values should be indicated with a minus sign. Round your present value factor to 4 decimals. Round your answers to the nearest whole dollar.) Project 2 Net present value $ Project 1 $ 107,100 Present Value Net Cash Flows x of Annuity at 10% (132,300) 71,500 18,900 8,800 $ 7,900 Net…
Information for two alternative projects involving machinery investments follows. Project 1 requires an initial investment of $136,500. Project 2 requires an initial investment of $104,400. Assume the company requires a 10% rate of return on its investments. (PV of $1, FV of $1, PVA of $1, and FVA of $1) Note: Use appropriate factor(s) from the tables provided. Annual Amounts Sales of new product Expenses Materials, labor, and overhead (except depreciation) Depreciation Machinery Selling, general, and administrative expenses Income Years 1-7 Project 1 Net present value Years 1-5 Compute the net present value of each potential investment. Use 7 years for Project 1 and 5 years for Project 2. Note: Negative net present values should be indicated with a minus sign. Round your present value factor to 4 decimals. Round your answers to the nearest whole dollar. Project 2 Net present value Present Value Net Cash Flows x of Annuity at 10% Net Cash Flows x Present Value of Annuity at 10% =…
Information for two alternative projects involving machinery investments follows. Project 1 requires an initial investment of $130,900. Project 2 requires an initial investment of $97,200. Assume the company requires a 10% rate of return on its investments. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.) Annual Amounts Sales of new product Expenses Materials, labor, and overhead (except depreciation) Depreciation-Machinery Selling, general, and administrative expenses Income Project 1 Years 1-7 Initial investment Net present value Compute the net present value of each potential investment. Use 7 years for Project 1 and 5 years for Project 2. (Negative net present values should be indicated with a minus sign. Round your present value factor to 4 decimals. Round your answers to the nearest whole dollar.) Net Cash Flows X Answer is complete but not entirely correct. Present Value of Annuity at 10% 26,460 X Project 1 $ 105,300 X 70,200…
Information for two alternative projects involving machinery investments follows. Project 1 requires an initial investment of $133,000. Project 2 requires an initial investment of $99,900. Assume the company requires a 10% rate of return on its investments. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.) Annual Amounts Sales of new product Expenses Materials, labor, and overhead (except depreciation) Depreciation Machinery Selling, general, and administrative expenses Income Years 1-7 Project 1 Net present value Years 1-5 Compute the net present value of each potential investment. Use 7 years for Project 1 and 5 years for Project 2. (Negative net present values should be indicated with a minus sign. Round your present value factor to 4 decimals. Round your answers to the nearest whole dollar.) Project 2 Net present value Net Cash Flows Net Cash Flows X X Present Value of Annuity at 10% Present Value of Annuity at 10% = Project 1…
A potential project involves an initial investment in machinery of RO.1,000,000 and has the following cash inflows:Year 1 – RO.250,000Year 2 – RO.350,000Year 3 – RO.200,000Year 4 – RO.400,000At the end of year 4, the machinery will be sold for RO.600,000.Calculate the accounting rate of return based on average investment.NOTE (DEDUCT THE DEPRECIATION TO ARRIVE AT THE CORRECT AVERAGE PROFIT) a. None of the options b. 35% c. 20% d. 25% Clear my choice
Information for two alternative projects involving machinery investments follows. Project 1 requires an initial investment of $129,500. Project 2 requires an initial investment of $95,40Q. Assume the company requires a 10% rate of return on its investments. Annual Anounts Sales of new product Expenses Haterials, labor, and overhead (except dapreciation) Depreciation-Machinery Selling, general, and administrative expenses Project 2 $ 81,000 Project 1 $ 103,500 68,900 18,500 ,480 33,920 19,080 21,200 $ 6,800 Income $7,620 Compute the net present value of each potential investment. Use 7 years for Project 1 and 5 years for Project 2. (Negative net present values should be indicated with a minus sign. Round your present value factor to 4 decimals. Round your answers to the nearest whole dollar.) Present Value Net Cash Flowsx of Annulty at 10% Present Value of Net Cash Flows Project 1 Years 1-7 Net present value Present Value of Annulty at 10% Project 2 Present Value of Net Cash Flows Net…
In an energy systems installation, following financial requirement was identified. Capital cost of equipment and installation - $ 150,000 Recurrent cost of maintenance Replacement of parts Life time of the system Income through energy generation i. iii. -$5,000 per year -$4,000 per year - 12 years - $ 22,000 per year Calculate the payback period of the system. If the scarp value of the equipment is $ 5,000, determine is the net profit expected to be collected for the investment? Explain how this profit is affected by "cost of money" or "interest". No calculations needed.
Bridgeport Company is considering two capital expenditures. Relevant data for the projects are as follows: Project Initial investment Annual cash inflow Life of project Salvage value A $260,084 $46,590 Project A 7 years $0 Project B Click here to view the factor table. Bridgeport Company uses the straight-line method to depreciate its assets. B $278,237 Calculate the internal rate of return for each project. (For calculation purposes, use 5 decimal places as displayed in the factor table provided, e.g. 1.25125. Round answers to O decimal places, e.g. 15%.) $44,540 9 years $0 Internal rate of return % %
A company has two projects that are under evaluation. The project investment costs, annual projected cash flows, and required rates of return are shown below: Project 1 Project 2 Rate of Return: 0.065 0.065 Project Cost: -$1,397,654 -$1,619,835 Year 1 $245,367 $267,345 Year 2 $302,542 $343,563 Year 3 $316,543 $367,834 Year 4 $367,843 $432,098 Year 5 $450,425 $589,435 Compute the NPV for each project using Microsoft Excel NPV's function. Be sure to show your work. Which project should be pursued? Why?
Information for two alternative projects involving machinery investments follows. Project 1 requires an initial investment of $229,500. Project 2 requires an initial investment of $156,000. Annual Amounts Project 1 Project 2 Sales of new product $ 148,000 $ 128,000 Expenses Materials, labor, and overhead (except depreciation) 77,000 44,000 Depreciation—Machinery 32,000 30,000 Selling, general, and administrative expenses 20,000 32,000 Income $ 19,000 $ 22,000 (a) Compute each project’s annual net cash flow.(b) Compute payback period for each investment.
Company A has provided figures for two investment projects, only one of which may be chosen. These are the calculations based on the figures: Payback Period The Accounting Rate of Return / Return on Capital Employed Net Present Value Project A 2 years 4 months 27.08% £63,705 Project B 2 years 7 months 39.47% £74.971 Analyse and provide recommendations as to what project needs to be chosen based on the calculations above.

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