Sales $185,150 Beg of year $178,000 End of year $144,000 Whats the asset turnover of the year?
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Sales $185,150
Beg of year $178,000
End of year $144,000
Whats the asset turnover of the year?
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- Payback Period and Accounting Rate of Return: Equal Annual Operating Cash Flows with Disinvestment Minn is considering an investment proposal with the following cash flows: Initial investment-depreciable assets $227,500 Net cash inflows from operations (per year for 10 years) 32,500 Disinvestment-depreciable assets 22,750 For parts b. and c., round answers to three decimal places, if applicable. a. Determine the payback period. 7 years b. Determine the accounting rate of return on initial investment. 5.495 c. Determine the accounting rate of return on average investment. 4.902Net Present Value Method The following data are accumulated by Geddes Company in evaluating the purchase of $138,900 of equipment, having a four-year useful life: Net Income Net Cash Flow Year 1 $35,000 $60,000 Year 2 22,000 46,000 Year 3 11,000 35,000 Year 4 (1,000) 23,000 Present Value of $1 at Compound Interest Year 6% 10% 12% 15% 20% 1 0.943 0.909 0.893 0.870 0.833 2 0.890 0.826 0.797 0.756 0.694 3 0.840 0.751 0.712 0.658 0.579 4 0.792 0.683 0.636 0.572 0.482 5 0.747 0.621 0.567 0.497 0.402 6 0.705 0.564 0.507 0.432 0.335 7 0.665 0.513 0.452 0.376 0.279 8 0.627 0.467 0.404 0.327 0.233 9 0.592 0.424 0.361 0.284 0.194 10 0.558 0.386 0.322 0.247 0.162 a. Assuming that the desired rate of return is 12%, determine the net present value for the proposal. Use the table of the present value of $1 presented above. If required, round to the nearest dollar. If required, use the minus sign to indicate a negative net present…Income from Net Cash Year Operations Flow $100,000 $180,000 2 40,000 120,000 40,000 100,000 10,000 90,000 10,000 120,000 The net present value for this investment is 4, 5.
- Year Investment $13,000 $10,000 Cash Inflow $1,000 $2,000 $2,500 $4,000 $5,000 $4,000 $5,000 $4,000 $3,000 $2,000 Determine the Payback Period. 1234567899Input area: Initial investment Pretax salvage value Cost savings per year Cost savings per year $ Working capital reduction Annual depreciation charge Aftertax salvage value 69 69 69 SA SA SA SA $ 535,000 $ 30,000 $ 150,000 100,000 $ 60,000 $ 107,000 $ 22,800 Tax rate Required return *Depreciation straight-line over life 24% 11% 5 Output area: NPV 150,000 cost savings $ 100,000 Year Cash flow Year 0 $ (475,000) 0 $ 1 139,680 1 2 139,680 234L 139,680 139,680 5 102,480 Accept/Reject Required pretax cost savings: NPV w/o OCF Required OCF OCF less dep. tax shield Cost savings $ 69 69 69 $ (497,076.39) $ 134,494.11 108,814.11 2345 cost savings Cash flow (475,000) 101,680 101,680 101,680 101,680 64,480Input area: Installation cost Pretax salvage value Operating cost per year Initial NWC Tax rate Discount rate *Depreciation straight-line over life Output area: Annual depreciation charge Aftertax salvage value OCF NPV $ SA SA SA GA $ 385,000 $ 60,000 $ 135,000 35,000 21% 10% ᏌᏊ Ꮚ Ꮚ $ 77,000 $ 47,400 $ 122,820 5
- Net Present Value Method The following data are accumulated by Geddes Company in evaluating the purchase of $158,800 of equipment, having a four-year useful life: Net Income Net Cash FlowYear 1 $44,000 $75,000 Year 2 27,000 58,000 Year 3 13,000 44,000 Year 4 (1,000) 29,000 Present Value of $1 at Compound InterestYear 6% 10% 12% 15% 20%1 0.943 0.909 0.893 0.870 0.8332 0.890 0.826 0.797 0.756 0.6943 0.840 0.751 0.712 0.658 0.5794 0.792 0.683 0.636 0.572 0.4825 0.747 0.621 0.567 0.497 0.4026 0.705 0.564 0.507 0.432 0.3357 0.665 0.513 0.452 0.376 0.2798 0.627 0.467 0.404 0.327 0.2339 0.592 0.424 0.361 0.284 0.19410 0.558 0.386 0.322 0.247 0.162 a. Assuming that the desired rate of return is 10%, determine the net present value for the proposal. Use the table of the present value of $1 presented above. If required, round to the nearest dollar. Present value of net cash flow $fill in the blank 1Amount to be invested $fill in the blank 2Net present value $fill in the blank 3b. Would…Net Present Value Method The following data are accumulated by Paxton Company in evaluating the purchase of $161,000 of equipment, having a four-year useful life: Net Income Net Cash Flow Year 1 $35,000 $59,000 Year 2 21,000 45,000 Year 3 10,000 34,000 Year 4 (1,000) 23,000 Present Value of $1 at Compound Interest Year 6% 10% 12% 15% 20% 1 0.943 0.909 0.893 0.870 0.833 2 0.890 0.826 0.797 0.756 0.694 3 0.840 0.751 0.712 0.658 0.579 4 0.792 0.683 0.636 0.572 0.482 5 0.747 0.621 0.567 0.497 0.402 6 0.705 0.564 0.507 0.432 0.335 7 0.665 0.513 0.452 0.376 0.279 8 0.627 0.467 0.404 0.327 0.233 9 0.592 0.424 0.361 0.284 0.194 10 0.558 0.386 0.322 0.247 0.162 a. Assuming that the desired rate of return is 6%, determine the net present value for the proposal. Use the table of the present value of $1 presented above. If required, round to the nearest dollar. If required, use the minus sign to indicate a negative net present value.…The following information is from Lacy's Inc. $ millions Prior Fiscal Year Current Fiscal Year Net Year-End Assets Revenue Income $21,330 14,403 $18,955 $1,070 a. Compute the asset turnover ratio for the current fiscal year. b. Compute the return on assets ratio for the current fiscal year. Numerator a. Asset Turnover Ratio $ Check b. Return on Assets Ratio $ Numerator Denominator / $ Denominator / $ || Result Result
- Net Present Value Method The following data are accumulated by Paxton Company in evaluating the purchase of $82,600 of equipment, having a four-year useful life: Net Income Net Cash Flow Year 1 $31,000 $53,000 Year 2 19,000 41,000 Year 3 9,000 31,000 Year 4 (1,000) 21,000 Present Value of $1 at Compound Interest Year 6% 10% 12% 15% 20% 1 0.943 0.909 0.893 0.870 0.833 2 0.890 0.826 0.797 0.756 0.694 3 0.840 0.751 0.712 0.658 0.579 4 0.792 0.683 0.636 0.572 0.482 5 0.747 0.621 0.567 0.497 0.402 6 0.705 0.564 0.507 0.432 0.335 7 0.665 0.513 0.452 0.376 0.279 8 0.627 0.467 0.404 0.327 0.233 9 0.592 0.424 0.361 0.284 0.194 10 0.558 0.386 0.322 0.247 0.162 a. Assuming that the desired rate of return is 20%, determine the net present value for the proposal. Use the table of the present value of $1 presented above. If required, round to the nearest dollar. If required, use the minus sign to indicate a negative net present value.…>Unit-of-production method This method amortizes the costs of oil and gas industry activities and is dependent on the accounting method chosen by the owner of the assets. The following general formula shows the concept of unit-of- production amortization: [unamortized costs at end of period]+|production for period [Amortization for period]=! reserves at the beginning of periodCapital Investment Analysis: Geddes Company
