The BMW Company is considering to purchase a new machine. Annual cash returns on investment cost of P1,200,000 is expected to be at P220,000. Useful is estimated at 8 years. The company's cost of capital is 14% and income tax rate is 35%. What is the payback reciprocal of the investment? A. 20.5% B. 18.3% C. 11.9% D. 22.2%

The BMW Company is considering to purchase a new machine. Annual cash returns on investment cost of P1,200,000 is expected to be at P220,000. Useful is estimated at 8 years. The company's cost of capital is 14% and income tax rate is 35%. What is the payback reciprocal of the investment? A. 20.5% B. 18.3% C. 11.9% D. 22.2%

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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A manufacturer of video games develops a new game over two years. This costs $850,000 per year with one payment made immediately and the other at the end of two years. When the game is released, it is expected to make $1 million per year for three years after that. What is the net present value (NPV) of this decision if the cost of capital is 8%? OA. $1,198,344 B. $693,778 OC. $630,707 OD. $1,009,132 SCHOD
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An Investment of P2,235,400 earned P985,400. How long will it take if invested at the rate of 15 1/4%?
You have been asked to assess whether it makes sense for CASTEC INC. to invest in a new telecom investment. The initial investment is expected to be S 60 million and the project is expected to generate income for the next 10 years, with the income statement below providing a measure of revenues and expenses for the project. Revenues Cost of Goods Sold Operating Expenses Depreciation |EBIT |-Interest Expenses |EBT Taxes @ 30% Net Income $28,000,000 $12,000,000 $6,000,000 $5,000,000 $5,000,000 $2,000,000 $3,000,000 S 900,000 $2,100,000 If the cost of capital for CASTEC INC. is 12% should the company invest in this project? Show all your work and justify your recommendation to receive any credit.
HSJ Foods is getting ready to produce a new line of products by investing 185000 OMR. The investment will result in additional cash flows of 52500 OMR , 81250, and 120000 over the next three years. What is the payback period for this project? Select one: a. 1.53 years b. 1.84 years c. 2.62 years d. None of these e. 2.42 years
A manufacturer of video games develops a new game over two years. This costs $830,000 per year with one payment made immediately and the other at the end of two years. When the game is released, it is expected to make $1.40 million per year for three years after that. What is the net present value (NPV) of this decision if the cost of capital is 10%? A. $1,497,539 B. $2,586,658 C. $2,178,238 D. $1,361,399
A manufacturer of video games develops a new game over two years. This costs $850,000 per year with one payment made immediately and the other at the end of two years. When the game is released, it is expected to make $1.20 million per year for three years after that. What is the net present value (NPV) of this decision if the cost of capital is 10%? OA. $1,462,112 OB. $1,005,202 OC. $913,820 OD. $1,736,258
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Siemens AG invests €80,000,000 to build a manufacturing plant to build wind turbines. The company predicts net cash flows of €16,000,000 per year for the next 8 years. Assume the company requires an 8% rate of return from its investments. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided. Round your present value factor to 4 decimals.) (1) What is the payback period of this investment? (2) What is the net present value of this investment? Complete this question by entering your answers in the tabs below. Required 1 Required 2 What is the net present value of this investment? (Any losses or outflows should be entered with a minus sign.) Chart Values are Based on: Cash Flow Annual cash flow Select Chart Drenant value of noch inflown Present Value of 1 Future Value of 1 n= i = 91,945,600 91,945,600 80,000,000 11,945,600