Investment cost twenty thousand dollars, annual income (gain) 8000 dollars / year, duration 5 years; salvage value 3000 dollars, annual expenses (maintenance and operating expenses) 4000 dollars / year, the profit rate that the company can be accepted is 15%. Evaluate the investment according to the net future value method.

Q: Project A requires a $380,000 initial investment for new machinery with a five-year life and a…

A: Solution: Average investment = (Initial Investment + salvage value) / 2  = (380000 + 39000) / 2  =…

Q: A corporation expects to receive $32,000 each year for 15 years from the sale of a product. There…

A: Rate of return is the annual income in percentage earned from an investment.

Q: A lessor made an investment of ₱550,000 in equipment with an expected life of 5 years. He expects…

A: The NPV is calculated as difference of present value of cash inflows and initial investment

Q: Compute the equivalent annual cost to own equipment with an initial investment of $54,000, yearly…

A: Equivalent annual cost (EAC) is the total annual cost of owning, operating, and maintaining an asset…

Q: Determine the annual worth (AW) of a project, where it requires capital investment of BD 40,000, has…

A: Annual Worth = AW is an equal annual series of dollar amounts, over a stated period (N), equivalent…

Q: A machine cost ₱100,000 with salvage value of ₱10,000 after 10 years. If the annual maintenance and…

A: A machine will be profitable if Net Present value (NPV) of machine is positive. NPV = Present value…

Q: e estimates of a project:        Initial investment                   $50,000        Annual…

A: PW or Present worth can be computed using PV function in excel. PV function will compute present…

Q: A piece of equipment costs ₱365,000 including shipping, installation and taxes. The supplier assures…

A: Depreciation expense: Depreciation expense is the reduction in a particular asset due to its use or…

Q: $500,000 is invested in equipment having a salvage value equal to $500,000(0.80n) after n years of…

A: The frequency of replacements that will minimize EUAC is the optimum replacement interval .  Minimum…

Q: what is its IRR? Use 2 financial calculator to determine your answer

A: Information Provided: Initial capital cost = $750,000 Tax operating cash flow per year = $225,000…

Q: Project A requires a $280,000 initial investment for new machinery with a five-year life and a…

A: The average rate of return: The accounting rate of return means the average return on the initial…

Q: An investment of 80,200 returned 20,000 per year over a five year useful life and then have a…

A: Capital budgeting is the process by which a corporation examines potential large projects or…

Q: A widget machine will cost $480,000.  The anticipated increase in revenue will be $140,000/year for…

A: Internal rate of return is the rate expressed in percentage terms which equalize the net present…

Q: xpected annual revenues: $770,000 Projected product life cycle: five years Equipment: $720,000 with…

A: Cash flows are inflows and outflows of cash.

Q: An investment of $20,000 for a new condenser is being considered. Estimated salvage value of the…

A: Capital budgeting is a technique that helps to analyze that which project is profitable and which…

Q: At i = 15% per year, a machine has a first cost of $15,000 and estimated operating costs and…

A:

Q: Most Company has an opportunity to invest in one of two new projects. Project Y requires a $320,000…

A: We can calculate the net present value as follows :

Q: Most Company has an opportunity to invest in one of two new projects. Project Y requires a $350,000…

A: Annual average investment = (Initial investment + salvage value) / 2 Project Y = (350000+0)/2 =…

Q: he product development group of a high-tech electronics company developed five proposals for new…

A: Present value of annuity is the current value of the future payments that are calculated using the…

Q: A potential investment has a cost of $542,500 and a useful life of 7 years. Annual cash sales from…

A: 1) Calculation of NPV (in case of investment before tax):   Year 1 2 3 4 5 6 7   Sales 219202…

Q: [The following information applies to the questions displayed below.] Project A requires a $320,000…

A: Capital budgeting: It can be defined as the process that is used by the business for evaluating the…

Q: An equipment costing ₱600,000, with a residual value of ₱30,000 at its useful life of five years, is…

A: Net Present Value(NPV) is amongst one of the modern techniques of capital budgeting which considers…

Q: Assume that a company has provided the following information regarding a capital investment…

A: Present value of a future amount With discount rate (r), period (n) and future amount (F), the…

Q: Company Q is considering a project which needs an equipment. The cost of the equipment is $350,000.…

A: Cash flows are the cash generated from the operation of the business organisation. In other words,…

Q: Project Phoenix costs $1.25 million and yields annual cost savings of $300,000 for seven years. The…

A: Payback period: This method is used to calculate how many years a project will take to recover its…

Q: Given the following information, what is the financial break-even point? Initial investment =…

A: Given that: Fixed cost=$58000 price=$130 variable cost per unit=$95 Thus formula of financial break…

Q: A project requires an initial investment of BD 75,000, has a salvage value of BD 15,000 after 4…

A: In the above question, Initial investment of project= BD 75,000 Annual expenses= BD 5,000 Salvage…

Q: A machine costs $180,000 and will have an eight-year life, a $20,000 salvage value, and…

A: Accounting rate of return (ARR) for an investment can be calculated as follows:-

Q: Required information [The following information applies to the questions displayed below.] A company…

A: Profitability index shows whether a project is profitable or is in loss. If the index is more than 1…

Q: Harper Corporation has the following information about the purchase of a new piece of equipment:…

A: Gross profit is $50,000 per year Cost of equipment is  $130,000 Salvage value at the end of the 8 th…

Q: What is the capital recovery cost for a machine costing $504,000 with a life of 9 years and a…

A: Capital recovery or equivalent annual cost =(P-S)(A/P,i,n) + S*I  , Where, P = investment S-…

Q: Project Y requires a $345,000 investment for new machinery with a six-year life and no salvage…

A: Payback period : Payback period is calculated to determine that how much time it will take to…

Q: Project A requires a $315,000 initial investment for new machinery with a five-year life and a…

A: Accounting rate of return is a conventional method used in evaluation of capital budgeted proposals.…

Q: Required information [The following information applies to the questions displayed below.] Cardinal…

A: Note: We’ll answer the first question since the exact one wasn’t specified. Please submit a new…

Q: Project Y requires a $345,000 investment for new machinery with a six-year life and no salvage…

A: Net present value : It is the discounted value of future cash inflow.  It is determined by…

Q: Given the following information, what is the financial break-even point? Initial investment =…

A: The financial break-even point is the level of earnings where earnings per share are zero. In other…

Q: . A project capitalized for ₱150,000 invested in depreciable assets will earn a uniform, annual…

A: Workings Computation of annual cash outflow:- Year  Operation & maintenance   Taxes &…

Q: A machine costs $600,000 and is expected to yield an after-tax net income of $23,000 each year.…

A: calculation of above requirement are as follows

Q: proposed new product. The land `costs P15,000,000, the building costs P30,000,000, the equipment…

A: Capital budgeting is a financial commitment as well as an investment.By applying active, the…

Q: Two methods can be used to produce expansion anchors. Method A costs $80,000 initially and will have…

A: Company shall select the method B and here is the working Is shown:

Q: Project Y requires a $345,000 investment for new machinery with a six-year life and no salvage…

A: Accounting rate of return can be calculated as: = Net Income / Average Investment It does not take…

Q: Most Company has an opportunity to invest in one of two new projects. Project Y requires a $320,000…

A: Average investment =   (Cost of machine + Salvage value) / 2 Project Y = ($320000 + 0) / 2= $160000…

Q: An investment of $20,000 for a new condenser is being considered. Estimated salvage value of the…

A: The external rate of return (ERR) is the rate of return on a project on which any “excess” cash is…

Q: The initial cost of purchasing a coffee bean packaging factory is $2,000,000. The estimated annual…

A: The cash flows refer to the virtual movement of earnings and money. The cash flow can be before and…

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.