Please don't give solution in image format... Cash Payback Period, Net Present Value Analysis, and Qualitative ConsiderationsThe plant manager of Shenzhen Electronics Company is considering the purchase of new automated assembly equipment. The new equipment will cost$120,000. The manager believes that the new investment will result in direct labor savings of $40,000 per year for 10 years.Present Value of an Annuity of $1 at Compound InterestYear6%10%12%15%20%123456780.9431.8332.6733.4654.2124.9175.5826.2106.8027.3600.9091.7362.4873.1703.7914.3554.8685.3355.7590.8936.1451.6902.4023.0373.6054.1114.5644.9685.3285.6500.8701.6262.2832.8553.3533.7854.1604.4874.772910a. What is the payback period on this project?yearsb. What is the net present value, assuming a 10% rate of return? Use the table provided above. Round to the nearest whole dollar.Net present valuec. What else should the manager consider in the analysis?0.8335.0191.5282.1062.5892.9913.3263.6053.8374.0314.192

Net Present Value = Present value of Net cash inflows - Initial investmentwhere,Present value of Net…

Answered: Cash Payback Period, Net Present Value…

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter12: Capital Investment Analysis

Section: Chapter Questions

Problem 15E

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If a copy center is considering the purchase of a new copy machine with an initial investment cost of $150,000 and the center expects an annual net cash flow of $20,000 per year, what is the payback period?
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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)?
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Cash Payback Period, Net Present Value Analysis, and Qualitative Considerations The plant manager of Shenzhen Electronics Company is considering the purchase of new automated assembly equipment. The new equipment will cost $260,000. The manager believes that the new investment will result in direct labor savings of $52,000 per year for 10 years. Present Value of an Annuity of $1 at Compound Interest Year 6% 12% 15% 20% 1 2 3 4 5 6 7 8 9 0.943 1.833 2.673 3.465 4.212 4.917 5.582 6.210 6.802 7.360 10% 0.909 1.736 2.487 3.170 3.791 4.355 4.868 5.335 5.759 6.145 0.893 1.690 2.402 3.037 3.605 4.111 4.564 4.968 5.328 5.650 0.870 1.626 2.283 2.855 3.353 3.785 4.160 4.487 4.772 0.833 5.019 1.528 2.106 2.589 2.991 3.326 3.605 3.837 4.031 4.192 10 a. What is the payback period on this project? years b. What is the net present value, assuming a 12% rate of return? Use the table provided above. Round to the nearest whole dollar. Net present value c. What else should the manager consider in the…
The management of Wyoming Corporation is considering the purchase of a new machine costing $375,000. The company's desired rate of return is 6%. The present value factor for an annuity of $1 at interest of 6% for 5 years is 4.212. In addition to the foregoing information, use the following data in determining the acceptability of this investment: Year Income fromOperations Net CashFlow 1 $18,750 $93,750 2 18,750 93,750 3 18,750 93,750 4 18,750 93,750 5 18,750 93,750 The net present value for this investment is: The answer is $19,875. How did they get this number?

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