FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Machine cost = $15,000; Life = 8 years; salvage value = $3000. What minimum cash return would the investor demand annually from the operation of this machine if he desires interest annually at the rate of 8% in his investment and accumulates a capital replacement fund by investing annual deposits at 5%?
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- An investment that cost $20,000 will produce annual cash flow’s of $5000 for a period of six years. Further, the investment has an expected salvage value of $3000. Given a desired rate of return of 12%, what will the investment generate?arrow_forwardNOVA Company is considering a long-term investment project called STUDY. STUDY will require an investment of $125,190. It will have a useful life of 4 years and no salvage value. Annual cash inflows would increase by $79,000, and annual cash outflows would increase by $40,000. Compute the cash payback period. O 3.21 years O 1.23 years O 1.58 years O 4 yearsarrow_forwardMargaret has a project with a $30560 first cost that returns $4320 per year over its 10-year life. It has a salvage value of $3000 at the end of 10 years. If the MARR is 5 percent, what is the payback period of this project if cash flow is continuous?arrow_forward
- NEED HELP ASAP! Imagine you are going to have a project to sell a Massive Machinary you owned. You have invested THB 15,500,000 for the Machine. This machine is expected ot have a life of 7 years. The expected cash flow for the next seven years are as follow; Year 1 - THB 900,000 Year 2 - THB 950,000 Year 3 - THB 1,200,000 Year 4 - THB 2,500,000 Year 5 - THB 2,500,000 Year 6 - THB 3,640,000 Year 7 - THB 5,560,000 Discount Rate is at 7% per year. Please find the Present Value for each year and also the Net Present Value. Then, see if you should accept this project or not? Give me a solid support for your answerarrow_forwardYour required rate of return is 10 percent. If you invest $3,000 today you will receive the following cash flows from year 1 to 4: 2000, 500, 1000, 2000. Calculate the Discounted Payback Period of the project. 3.7 years 3.9 years 3.1 years 3.5 years 3.3 3 yearsarrow_forwardYou can use machine A with an initial investment of $1,000 and a maintenance cost of $7,980 annually for the next five years. Alternatively, you can purchase machine B for $12,000 initial cost today, plus $5,000 annual maintenance with the same 5 years life. At a cost of capital of 15%, you should: Show your Work A. Use machine A and save $600 in equivalent annual annuity. B. Use machine A and save $302 in equivalent annual annuity. C. Use the machine B and save $596 in equivalent annual annuity. D. Buy the machine C and save $600 in equivalent annual annuity. E. Buy machine B and save $596 in equivalent annual annuity.arrow_forward
- Replacing old equipment at an immediate cost of $50,000 and an additional outlay of $15,000 six years from now will result in savings of $11,000 per year for 7 years. The required rate of return is 5% compounded annually. Compute the net present value and determine if the investment should be accepted or rejected according to the net present value criterion. The net present value of the project is S (Round the final answer to the nearest dollar as needed. Round all intermediate values to six decimal places as needed.) The proposal should be аcсepted. rejected.arrow_forwardcalculate the net present value of the following: Project A requires an initial investment of $1,000 and is expected to generate cash flows of $400 per year for 3 yearsarrow_forwardYou are required to investigate the following project: The initial Investment at n=0 is $100,000. The project life is 10 years. Estimated annual operating cost : 34,000. The required minimum return on the investment :14%. The salvage value 8,000. What is the minimum annual revenues that should be generated to make the project worthwhile? 97842 52758 81921 45716 O O O Oarrow_forward
- . calculate the net present value of the following: Project A requires an initial investment of $1,000 and is expected to generate cash flows of $400 per year for 3 yearsarrow_forwardA project will produce an operating cash flow of $14,600 a year for 7 years. The initial fixed asset investment in the project will be $48,900. The net aftertax salvage value is estimated at $12,000 and will be received during the last year of the project's life. What is the net present value of the project if the required rate of return is 12 percent? Group of answer choices $22,627.54 $23,159.04 $34,627.54 $39,070.26 $41,040.83 please please solve it with a finance calculator and show your work, I know the answer but looking for some easy way to slove it by a finance calculatorarrow_forwardA proposed project will require an initial investment of $1,000,000 and will generate net operating cash inflows of $250,000 per year for five years. What is the internal rate of return? I already answered this question using PV annuity tables but not sure of my answer. I hope you can help. Thanks!arrow_forward
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