The firm’s is considering an investment in some additional equipment. The equipment has a net cost of investment amounting to ₱600,000 and has an estimated useful life of 5 years with no salvage value. The firm expects an annual cash inflow of ₱128,000 from this equipment. The firm’s internal rate of return is 14%. What is the payback period on this equipment?

Q: is considering purchasing equipment that will reduce costs by P40,000. The equipment costs P300,000…

A: In the future worth method we find out the future value of cost and benefits and see whether they…

Q: Cortland Corp is considering the purchase of a new piece of equipment. The cost savings from the…

A: annual net income = annual increase in net cash flows  - Depreciation If no specific method is given…

Q: what is the present worth of this investment?

A: Time value of money (TVM) refers to the method or technique which is used to measure the amount of…

Q: What is the payback period on this equipment?

A: Payback Period: The period in which the cost of the project is recovered is called the payback…

Q: Salalah Methanol Co. has bought some new machinery at a cost of 1250000 OMR. The impact of the new…

A: A capital project is an investment that requires huge capital investment and is expected to be in…

Q: Candlex Ltd Co is appraising an investment project which has an expected life of four years and…

A: Before finding the NPV, we will first have to find the Mean or average selling price of all economic…

Q: life of 7 years. The annual maintenance cost is P6,000. While not in use by the firm, the equipment…

A: In annual worth method we try to find annual equivalent cost of of equipment and see whether it is…

Q: A capital investment of Php 508,000 on a project can produce an annual revenue of Php 383,000 for 5…

A: Capital investment = 508,000 Annual Revenue = 383,000 N = 5 years Salvage Value = 7% of capital…

Q: Alter company's manager has proposed installing an equipment that will cost $36,000, have a B-year…

A: With the initial investment of $36000, there are annual cash inflows of $ 8000 each in addition to…

Q: Wayne Company is considering a long-term investment project called ZIP. ZIP will require an…

A: Expected increase in cash inflows $80,300 Less: Expected increase in cash outflows $40,000…

Q: Angat Corporation is evaluating the purchase of a P 500,000 die attach machine. The cash inflows…

A:

Q: The company recently invested in a project that has an expected annual cash inflow of P700,000 for…

A: The payback period represents the period that a project takes to recoup the initial investment. The…

Q: Master Machine Berhad is considering a four-year project to improve its production efficiency.…

A: Net present value is difference between present value of cash outflow and present value of…

Q: ST Manufacturing Ltd is evaluating an investment of a machine that cost $200,000. With the new…

A: The internal rate of return is a metric used in financial analysis to estimate the profitability of…

Q: John Walker Company is planning to buy a new machine costing Php2,000,000 with a useful life of five…

A: 1) Payback period = Initial investment                                   -------------------…

Q: the implementation of a new system would have a payback period of 5 years while gaining Php 175,000…

A: 1)Payback period is a period which shows how much time a project takes to recover the initial…

Q: Raguna Co. is considering adding a new machine to its production line.  The  machine costs…

A: Initial cash outlay will include the total cost of machine i.e. purchase cost and installation cost,…

Q: Magsaysay Company is evaluating an investment that would have an eight-year life and would require a…

A:

Q: The TV company has made an investment in video and recording equipment that costs P106,700. The…

A: Average accounting rate of return = Average net profit / Average investment  0.10 = Average net…

Q: Your firm is considering the purchase of two alternative machinery: Machine A has an expected life…

A: The replacement chain method: This method is a capital budgeting technique that is used when…

Q: ny is considering the acquisition of an automatic 3D printer machine for it assemble operation of…

A: In annual worth we need to calculate annual cost and compare with annual revenue and than compare…

Q: A company would like to purchase a machine for $160,000 with a life of 8 years. They estimate a…

A: Solution-In case of calculation of capital recovery cost of annual operating cost is…

Q: Hayden Company is considering the acquisition of a machine that costs $389,000. The machine is…

A: Given: Initial investment = $ 389,000 Net cash flow per annum = $ 86,000 Operating income = $ 73,100…

Q: A project in Guatemala has initial costs of $25 million, but is expected to have a low salvage…

A: Initial cost (I) = $25 million Present value of cashflows (PV) = $24 million r = 15% n = 4 years Let…

Q: Python Machine Company is considering the acquisition of a large equipment to set up its factory in…

A: Cost of machine =1900000 Depreciation per year =1900000/10 Annual depreciation =190000 Tax benefits…

Q: How many years must the annual cash flows be generated for the project to generate a net present…

A: n = Log [1 / {1 - (PV x r / P)}] / Log (1 + r) Here, n = No. of Periods PV = Present Value or…

Q: A firm is considering purchasing equipment that will reduce cost by P 400, 000. The equipment costs…

A: Present worth method is one of a valuation method used in capital budgeting. It is calculated by…

Q: A capital investment of Php 508,000 on a project can produce an annual revenue of Php 383,000 for 5…

A: Capital Investment = 508,000 Annual Revenue = 383,000 Investment is mentioned as 508,000 Salvage…

Q: A firm is considering purchasing equipment that will reduce costs by P40,000. The equipment costs…

A: GIVEN   . A firm is considering purchasing equipment that will reduce costs by P40,000. The…

Q: Cadillac Company is evaluating an investment that would have an eight-year life and would require a…

A: The payback period is the time it takes an investor to repay the cost of an investment, or to reach…

Q: An equipment which can be purchase for P700,000 is expected to generate a net cash flow of P200,000…

A: Since you have posted a question with multiple sub-parts, we will solve the first three sub-parts…

Q: 1. What is the present value of cash inflows? 2. What is the NVP if the equipment cost 320,000,000?

A: Cash flows to sales ratio = Cash flows / Sales * 100 Calculation of cash inflows of each year:…

Q: uemon Company is taking into account the replacement of an old machine now in use with a new machine…

A: solution : given: annual cash savings before taxes        =P 22,500 tax rate…

Q: XYZ Company is looking to invest in some new machinery to replace its current malfunctioning one.…

A: Answer A) Calculation of Payback period Payback period = Initial investment in Machine/ (Annual…

Q: MLF Corporation is evaluating the purchase of a P500,000 die attach machine.  The cash inflows…

A: Internal rate of return is amongst one of the modern techniques of capital budgeting ,which…

Q: XYZ Company is looking to invest in some new machinery to replace its current malfunctioning one.…

A: >Payback period is the amount of time it will take to get back the amount initially invested.…

Q: i) Estimate the net present value of this project. ii) Estimate the internal rate of return of this…

A: Information Provided: Term = 30 year Depreciation = 500,000 Tax rate = 40% Initial Investment =…

Q: A firm is considering an investment in a new machine with a price of $16.9 million to replace its…

A: Calculation of NPV and IRR of the New Machine:

Q: NOVA Company is considering a long-term investment project called STUDY. STUDY will require an…

A: Net annual cash inflow = Annual cash inflow - annual cash outflow = 79000-40000 = $39000

Q: It is estimated that a certain piece of equipment can save $22,000 per year in labor and materials…

A: Given that: Saving per year = $22000 Required rate of return = 15%

Q: Diamond Company is considering purchasing a machine that would cost $756,000 and have a useful life…

A: Capital Budgeting: Capital budgeting decisions are the most important decision in corporate…

Q: FNV Industries is considering the purchase of a new processing machine. The initial cost of the…

A: NPV is the difference between present value of all cash inflows and initial investment. NPV =PV of…

Q: lue of P50,000 and a life of 7 years. The annual maintenance cost is P6,000. While not in use by the…

A: Given information : Proposal 1   Cost reduction 400000 Cost of equipment 300000 Salvage…

Q: Candlex Ltd Co is appraising an investment project which has an expected life of four years and…

A: As this problem requires lot of calculations, we will use excel to do it. However, first of all, we…

Q: Semarak Enterprises is considering a new three-year expansion project and is looking closely at…

A: The analysis of the new project and the decision whether to accept or reject the project depends on…

Q: Your fim is thinking about investing S200.000 in the overhaul of a manufacturing cell in a lean…

A: The present value is the value of the sum received at time 0 or the current period. It is the value…

Q: Onesie enterprise is planning to buy new equipment to replace the existing one which is already old…

A: initial investment =USD45,000 annual cashinflow =USD8,000 slavage value =0 WACC =10% tax=35% life of…

Q: Mima Sassa wants to spend PHP 600,000 on a new equipment. The machine's estimated service life is…

A: Here, Initial Investment is Php600,000 Annual Cash Flows is Php150,000 Time Period is 6 years

Q: Salalah Foods has invested in new machinery at a cost of 1450000 OMR. This investment is expected to…

A: as the cash flows are uneven, we will use the following formula to find the payback period. payback…

Q: The firm’s is considering an investment in some additional equipment. The equipment has a net cost…

A: Initial cost (C) = ₱600000 Annual cash inflow (A) = ₱128000

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.