Quary Company is considering an investment in machinery with the following information.Initial investmentUseful lifeMaterials, labor, and overhead (except depreciation)Depreciation-Machinery$ 254,0009 yearsSalvage valueExpected sales per year$ 20,00012,700 unitsSelling, general, and administrative expensesSelling price per unit$ 57,15026,0006,350$ 10(a) Compute the investment's annual income and annual net cash flow.(b) Compute the investment's payback period.Answer is not complete.Complete this question by entering your answers in the tabs below.Required A Required BCompute the investment's annual income and annual net cash flow.Annual AmountsSales of new productExpensesMaterials, labor, and overhead (except depreciation)Selling, general, and administrative expensesDepreciation-MachineryIncomeNet cash flowIncomeCash Flow$127,000(57,150)(6,350)(26,000)$89,500$127,000< Required ARequired B >

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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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Quary Company is considering an investment in machinery with the following information. Initial investment Useful life Salvage value Expected sales per year (a) Compute the investment's annual income and annual net cash flow. (b) Compute the investment's payback period. Required A Required B Complete this question by entering your answers in the tabs below. $ 335,000 9 years $ 20,000 16,750 units Annual Amounts Materials, labor, and overhead (except depreciation) Depreciation-Machinery Selling, general, and administrative expenses Selling price per unit Compute the investment's annual income and annual net cash flow. Expenses Income Net cash flow $ 75,375 35,000 8,375 $ 10
Your firm is considering purchasing a machine with the following annual, end-of-year, book investment accounts. Gross investment Less: Accumulated depreciation Net investment AAR Year 0 Year 1 Year 2 Year 3 Year 4 $ 58,000 $58,000 $ 58,000 $ 58,000 $58,000 0 14,500 29,000 43,500 58,000 +% $ 58,000 $43,500 $ 29,000 $14,500 $ The machine generates, on average, $6,000 per year in additional net income. What is the average accounting return for this machine? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) 0
Quary Company is considering an investment in machinery with the following information. Initial investment $ 254,000 Materials, labor, and overhead (except depreciation) $ 57,150 Useful life 9 years Depreciation—Machinery 26,000 Salvage value $ 20,000 Selling, general, and administrative expenses 6,350 Expected sales per year 12,700 units Selling price per unit $ 10 (a) Compute the investment’s annual income and annual net cash flow.(b) Compute the investment’s payback period.
Quary Company is considering an investment in machinery with the following information. Initial investment $ 308,000 Materials, labor, and overhead (except depreciation) $ 69,300 Useful life 9 years Depreciation—Machinery 32,000 Salvage value $ 20,000 Selling, general, and administrative expenses 7,700 Expected sales per year 15,400 units Selling price per unit $ 10 (a) Compute the investment’s annual income and annual net cash flow.(b) Compute the investment’s payback period. Please also help with what I need to use to fill in the blanks on the first image. "Required A"
In an energy systems installation, following financial requirement was identified. Capital cost of equipment and installation - $ 150,000 Recurrent cost of maintenance Replacement of parts Life time of the system Income through energy generation i. iii. -$5,000 per year -$4,000 per year - 12 years - $ 22,000 per year Calculate the payback period of the system. If the scarp value of the equipment is $ 5,000, determine is the net profit expected to be collected for the investment? Explain how this profit is affected by "cost of money" or "interest". No calculations needed.
n the design of a chemical plant, the following expenditures and revenues are estimated after the plant has achieved its desired production rate. Total capital investment (TCI) : $10 000 000 Working capital investment (WCI) : $1 000 000 Annual sales : $8 000 000 /year Annual expenditures : $2 000 000 /year Assuming straight-line depreciation over a 10-year project analysis period, determine a) The return on the investment after taxes b) The payback period
our firm is considering purchasing a machine with the following annual, end-of-year, book investment accounts. Purchase Date Year 1 Year 2 Year 3 Year 4 Gross investment $ 55,000 $ 55,000 $ 55,000 $ 55,000 $ 55,000 Less: Accumulated depreciation 0 13,750 27,500 41,250 55,000 Net investment $ 55,000 $ 41,250 $ 27,500 $ 13,750 $ 0 The machine generates, on average, $5,300 per year in additional net income. What is the average accounting return for this machine? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) AAR %
The following details are provided by a manufacturing company: Investment Useful life Estimated annual net cash inflows for first year Estimated annual net cash inflows for second year Estimated annual net cash inflows for next ten years Residual value Product line $1,170,000 12 years $500,000 $360,000 $360,000 $50,000 Depreciation method Straight-line 14% Required rate of return Calculate the payback period for the investment. (Round your answer to two decimal places.) OA. 2.34 years OB. 2.77 years OC. 2.86 years OD. 2.94 years
Information for two alternative projects involving machinery investments follows. Project 1 requires an initial investment of $129,500. Project 2 requires an initial investment of $95,40Q. Assume the company requires a 10% rate of return on its investments. Annual Anounts Sales of new product Expenses Haterials, labor, and overhead (except dapreciation) Depreciation-Machinery Selling, general, and administrative expenses Project 2 $ 81,000 Project 1 $ 103,500 68,900 18,500 ,480 33,920 19,080 21,200 $ 6,800 Income $7,620 Compute the net present value of each potential investment. Use 7 years for Project 1 and 5 years for Project 2. (Negative net present values should be indicated with a minus sign. Round your present value factor to 4 decimals. Round your answers to the nearest whole dollar.) Present Value Net Cash Flowsx of Annulty at 10% Present Value of Net Cash Flows Project 1 Years 1-7 Net present value Present Value of Annulty at 10% Project 2 Present Value of Net Cash Flows Net…
B2B Co. is considering the purchase of equipment that would allow the company to add a new product to its line. The equipment is expected to cost $369,600 with a 8-year life and no salvage value. It will be depreciated on a straight-line basis. The company expects to sell 147,840 units of the equipment's product each year. The expected annual income related to this equipment follows. Sales Costs Materials, labor, and overhead (except depreciation on new equipment) Depreciation on new equipment Selling and administrative expenses Total costs and expenses Pretax income Income taxes (30%) Net income Chart Values are Based on: If at least an 10% return on this investment must be earned, compute the net present value of this investment. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.) Select Chart n= j= Amount % X PV Factor = $
H7. Query Company is considering an investment in machinery with the following information. Initial investment $ 200,000 Materials, labor, and overhead (except depreciation) $ 45,000 Useful life 9 years Depreciation—Machinery 20,000 Salvage value $ 20,000 Selling, general, and administrative expenses 5,000 Expected sales per year 10,000 units Selling price per unit $ 10 (a) Compute the investment’s annual income and annual net cash flow. (b) Compute the investment’s payback period. Please show all step by step calculation
A firm has projected the following financials for a possible project: YEAR Sales Cost of Goods S&A Depreciation Investment in NWC Investment in Gross PPE 0 1,130.00 105,468.00 1 132,716.00 Submit 549.00 2 62,780.00 62,780.00 30,000.00 30,000.00 30,000.00 21,093.60 21,093.60 21,093.60 Answer format: Currency: Round to: 2 decimal places. 3 132,716.00 132,716.00 132,716.00 549.00 What is the NPV of the project? (Hint: Be careful about rounding the WACC here!) 4 62,780,00 62,780.00 62,780.00 30,000.00 549.00 21,093.60 549.00 5 132,716.00 The firm has a capital structure of 37.00% debt and 63.00% equity. The cost of debt is 9.00%, while the cost of equity is estimated at 15.00%. The tax rate facing the firm is 38.00%. (Assume that you can't recover the final NWC position in year 5. i.e. only consider the change in NWC for each year) 30,000.00 21,093.60 549.00

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