Exercise 24-3 (Algo) Payback period and unequal cash flows LO P1 Beyer Company is considering buying an asset for $310,000. It is expected to produce the following net cash flows. Year 4 $250,000 Net cash flows Year Year 1 $80,000 Initial investment Year 1 Year 2 Year 3 Year 4 Year 5 Total Compute the payback period for this investment. (Cumulative net cash outflows must be entered with a minus sign. Round your Payback Period answer to 2 decimal places.) Net Cash Flows $ (310,000) Year 2 $40,000 Payback period = Year 3 $70,000 Year 5 $18,000 Cumulative Cash Flows

Exercise 24-3 (Algo) Payback period and unequal cash flows LO P1 Beyer Company is considering buying an asset for $310,000. It is expected to produce the following net cash flows. Year 4 $250,000 Net cash flows Year Year 1 $80,000 Initial investment Year 1 Year 2 Year 3 Year 4 Year 5 Total Compute the payback period for this investment. (Cumulative net cash outflows must be entered with a minus sign. Round your Payback Period answer to 2 decimal places.) Net Cash Flows $ (310,000) Year 2 $40,000 Payback period = Year 3 $70,000 Year 5 $18,000 Cumulative Cash Flows

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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21 Beyer Company is considering the purchase of an asset for $210,000. It is expected to produce the following net cash flows. The cash flows occur evenly within each year. Net cash flows Year 0 1 2 3 4 5 Cash Inflow (Outflow) Compute the payback period for this investment. (Cumulative net cash outflows must be entered with a minus sign. Round your Payback Period answer to 2 decimal place.) S (210,000) Year 1 $64,000 Payback period = Year 2 Year 3 Year 4 $33,000 $62,000 $150,000 Cumulative Net Cash Inflow (Outflow) Year 5 $28,000 Saved Total $337,000
Exercise 26-3 (Algo) Payback period and unequal cash flows LO P1 Beyer Company is considering buying an asset for $400,000. It is expected to produce the following net cash flows. Year 2 $80,000 Year Initial investment Year 1 Year 2 Year 3 Year 4 Year 5 Total Year 1 $80,000 Net cash flows Compute the payback period for this investment. Note: Cumulative net cash outflows must be entered with a minus sign. Round your Payback Period answer to 2 decimal places. Net Cash Flows $ (400,000) Payback period=> Year 3 $70,000 Cumulative Cash Flows Year 4 $200,000 Year 5 $15,000
Exercise 24-3 (Algo) Payback period and unequal cash flows LO P1 Beyer Company is considering buying an asset for $350,000. It is expected to produce the following net cash flows. Year 3 Year 4 $70,000 $180,000 Net cash flows Year Initial investment Year 1 Year 2 Year 3 Year 4 Year 1 $82,000 Compute the payback period for this investment. (Cumulative net cash outflows must be entered with a minus sign. Round your Payback Period answer to 2 decimal places.) Year 5 Total $ S Net Cash Flows dicates no response was expected Year 2 $45,000 (350,000) S 82.000 Payback period 45.000 70,000 180,000 14.000 41,000 Cumulative Cash Flows (391.000) 82.000 127.000 197.000 377.000 391.000 6.93- based calculation a Year 5 $14,000 years ret: he ports deducted
Exercise 24-3 (Algo) Payback period and unequal cash flows LO P1 Beyer Company is considering buying an asset for $240,000. It is expected to produce the following net cash flows. Year 5 $25,000 Net cash flows Year Year 1 $60,000 Initial investment Year 1 Year 2 Year 3 Year 4 Year 5 Total Compute the payback period for this Investment. (Cumulative net cash outflows must be entered with a minus sign. Round your Payback Perlod answer to 2 decimal places.) Net Cash Flows $ (240,000) Year 2 $36,000 Payback period = Year 3 $60,000 Cumulative Cash Flows Year 4 $150,000
Exhibit 8-1The cash flows associated with an investment project are as follows: Cash Flows Initial Outflow -$60,000 Year 1 $20,000 Year 2 $30,000 Year 3 $30,000 Year 4 $30,000 Refer to Exhibit 8-1. What’s the payback period of the project? If a firm’s cutoff payback period is 3 years, should it accept the project? Group of answer choices 2.3 years; accept the project 3.8 years; accept the project 3.8 years; reject the project 2.3 years; reject the project
Francoeur Co. has identified an investment project with the following cash flows: Year 1 2 3 4 Cash Flow $830 $1,150 $1,410 $1,550 If the discount rate is 8 percent, what is the present value of these cash flows as of Year O? $4,013.06 $3,406.47 $3,679.59 $4,549.11 $4,271.21
Problem 5-29 Calculating Incremental Cash Flows Darin Clay, the CFO of MakeMoney.com, has to decide between the following two projects: Year Project Million Project Billion 0123 -$2,500 0-290 -$10 0+1,050 1.090 1.850 1,850 2,900 The expected rate of return for either of the two projects is 13 percent. What is the range of initial investment (0) for which Project Billion is more financially attractive than Project Million? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Initial investment less than
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24-A project has the following net cash flows Year 0 10,500 Year 1 4.486 S Year 2 3,915 S Year 3 3.206 S Year 4 2.677 S What is the internal rate of return of this project? A. B. C. D. E Almost 25% Almost 20% Almost 15% Almost 10% All choices are incorrect
3 QS 24-1 (Algo) Payback period and equal cash flows LO P1 Park Company is considering an investment of $29,000 that provides net cash flows of $13,400 annually for four years. What is the investment's payback period? Numerator: Initial investment 1 Payback Period Denominator: Annual net cash flow Payback Period Payback period
Year Cash Flow (A) Cash Flow (D) $- -$ 0 348,000 51,000 1234 47,000 24,200 2 67,000 22,200 67,000 19,700 14,800 442,000 Whichever project you choose, if any, you require a return of 14 percent on your investment. a-1.What is the payback period for each project? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) Project A Project B Payback period years years a- 2. If you apply the payback criterion, which investment will you choose? O Project A O Project B b- What is the discounted payback period for each project? (Do not round intermediate 1. calculations and round your answers to 2 decimal places, e.g., 32.16.)
Problem 6. Justine Global Info Tech records the following cash flows at the end of each year for a project. If the firm's discount rate is 11%, what is the PRESENT VALUE of the project? Year Cash Flow 1 P794,633.00 P542,149.00 P836,200.00 P716,080.00 P520,354.00 2 3 4 5