Peng Company is considering an investment expected to generate an average net income after taxes of $1,950 for three years. The investment costs $45,000 and has an estimated $6,000 salvage value. Compute the accounting rate of return for this investment; assume the company uses straight-line depreciation. Express your answer as a percentage, rounded to two decimal places.

A firm purchased $120,000 worth of light general-purpose trucks. The operations of the trucks lead to annual income of $60,000 for years 1~4. These trucks were then sold for $20,000 at the end of year 4. Assume a 30% combined tax rate. With a 40% bonus depreciation plus MACRS depreciation, do the following. (a)  Calculate the before-tax IRR. (b)  Calculate the after-tax IRR.

Consider a piece of equipment for which the expenditure at the beginning of period 1 is $20,000 The net revenue at the end of year 1 is $8,000 The net revenue at the end of year 2 is $14,000 The net revenue at the end of year 3 is $18,000, which includes salvaging the equipment. The interest rate is 5%. What is the net present value of this investment over the three year period including the initial purchase of the asset and the revenue from the first three years of operation (including sale of the equipment)?

ABC, Inc., is considering purchase of a new equipment. The expected sales are expected to be $5,556,982. The annual cash operating expenses are expected to be $2,957,536. The annual depreciation is estimated to be $456,926 and the interest expense is estimated to be $206,975. If the tax rate is 33%, what is the operating cash flow?

Vaughn Company is considering a capital investment of $378,400 in additional productive facilities. The new machinery is expected to have a useful life of 6 years with no salvage value. Depreciation is by the straight-line method. During the life of the investment, annual net income and net annual cash flows are expected to be $18,920 and $86,000, respectively. Vaughn has an 7% cost of capital rate, which is the required rate of return on the investment. (a1) Compute the cash payback period. (Round answer to 2 decimal places, e.g. 2.25.) Your answer is correct. Cash payback period (a2) eTextbook and Media (b) Your answer is correct. Annual rate of return Compute the annual rate of return on the proposed capital expenditure. (Round answer to 2 decimal places, e.g. 2.25%.) eTextbook and Media 4.4 years Net present value $ 10 Attempts: 1 of 5 used % Attempts: 1 of 5 used Using the discounted cash flow technique, compute the net present value. (Round present value factor calculations to 5…

Baghiben

What is the per-year depreciation amount if straight-line depreciation is used? Suppose a business purchases a machine for $10,000. The useful life is estimated to be 5 years, and the income tax rate is 25%. In the first year, the company makes $5,000 worth of sales using the machine, and operational expenses were $1,500.

Vaughn Company is considering a capital investment of $378,400 in additional productive facilities. The new machinery is expected to have a useful life of 6 years with no salvage value. Depreciation is by the straight-line method. During the life of the investment, annual net income and net annual cash flows are expected to be $18,920 and $86,000, respectively. Vaughn has an 7% cost of capital rate, which is the required rate of return on the investment. (a1) Compute the cash payback period. (Round answer to 2 decimal places, e.g. 2.25.) Your answer is correct. Cash payback period (a2) eTextbook and Media (b) Your answer is correct. Annual rate of return Compute the annual rate of return on the proposed capital expenditure. (Round answer to 2 decimal places, e.g. 2.25%.) eTextbook and Media Your answer is correct. 4.4 years Net present value $ 10 % Attempts: 1 of 5 used Using the discounted cash flow technique, compute the net present value. (Round present value factor calculations to…

Milagros Company is considering an investment in equipment for $60,000. Milagros uses the straight-line method of depreciation with no mid-year convention. In addition, its tax rate is 40 percent and the life of the equipment is five years with no salvage value. The expected income before depreciation and taxes is projected to be $30,000 per year. What is the payback period in years approximated to two decimal points? Group of answer choices 2.63 2.00 1.00 4.00

3. Solar Solutions has purchased new manufacturing equipment that cost $400,000. Calculate the yearly tax savings from the CCA tax shield for the next three years. Assume that the income tax rate is 30%, the CCA rate is 30%, and the weighted-average cost of capital (WACC) is 12%. Assume that CCA in the first year is subject to the accelerated depreciation method for the year of acquisition. (Hint. Use Microsoft Excel to calculate the discount factor(s).) (Do not round your intermediate calculations. Round your final answers to 2 decimal places.) X Answer is complete but not entirely correct. Year 1 2 3 $ $ $ PV of Tax Savings 91,071.43 x 56,919.64 X 35,574.78 X