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- Your company is planning to purchase a new log splitter for is lawn and garden business. The new splitter has an initial investment of $180,000. It is expected to generate $25,000 of annual cash flows, provide incremental cash revenues of $150,000, and incur incremental cash expenses of $100,000 annually. What is the payback period and accounting rate of return (ARR)?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?
- A company buys a machine for $180,000 that has an expected life of nine years and no salvage value. The company expects an annual net income (after taxes of 30%) of $8,550. What is the accounting rate of return?Your company is planning to purchase a new log splitter for its lawn and garden business. The new splitter has an initial investment of $268,000. It is expected to generate $40,000 of annual cash flows, provide incremental cash revenues of $194,772, and incur incremental cash expenses of $120,000 annually. What is the payback period and accounting rate of return (ARR)? Round your answers to 1 decimal place. Payback period years. ARR %A company buys a machine for $80,000 that has an expected life of 10 years and no salvage value. The company uses straight-line depreciation. The company anticipates a yearly net income of $3,850 after taxes of 14%, with the cash flows to be received evenly throughout each year. What is the accounting rate of return? a) 4.81% b) 8.28% c) 1.35% d) 9.63% e) 48.13%
- Your company is planning to purchase a new log splitter for its lawn and garden business. The new splitter has an initial investment of $204,000. It is expected to generate $30,000 of annual cash flows, provide incremental cash revenues of $125,080, and incur incremental cash expenses of $70,000 annually. What is the payback period and accounting rate of return (ARR)? Round your answers to 1 decimal place. Payback period fill in the blank 1 years ARR fill in the blank 2%A company buys a machine for $180,000 that has an expected life of nine years and no salvage value. The company expects an annual net income (after taxes of 30%) of $8,550. What is the accounting rate of return? a. 4.75% c. 2.85% e. 6.65% b. 42.75% d. 9.50%A company is planning to spend P60,000 for a machine which will be depreciated on a straight-line basis over 10 year period. the machine will generate additional cash revenues of P12,000 a year. It will incur additional costs except for depreciation. the income tax rate is 35%. Determine the accounting rate of return.
- A company would like to purchase a machine for $160,000 with a life of 8 years. They estimate a POSITIVE salvage value to be 3% of the initial machine cost (CASH IN FLOW at EOY8). If other operating costs are estimated to be $15,000 per year. The interest rate the company uses to justify their investments is 9% per year compounded yearly. a. What is the capital recovery cost? b. What is the minimum amount of annual revenue ($? per year) that makes this investment an attractive option for the company?A firm is considering an investment in new equipment that has the following information. Purchase Cost: $123,829 and the equipment will have no salvage value at the end of its five year life. Annual accounting profit is $30,899 Calculate the Accounting Rate of Return, ie the ARR. Express your answer as a percentage with two decimal placesA 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?