The following data are accumulated by Paxton Company in evaluating the purchase of $131,600 of equipment, having a four-year useful life:   Net Income Net Cash Flow Year 1 $31,000   $52,000   Year 2 19,000   40,000   Year 3 9,000   30,000   Year 4 (1,000)   20,000   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 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. If required, use the minus sign to indicate a negative net present value. Present value of net cash flow $fill in the blank 1 Amount to be invested $fill in the blank 2 Net present value $fill in the blank 3 b.  Would management be likely to look with favor on the proposal? No  The net present value indicates that the return on the proposal is less  than the minimum desired rate of return of 10%

Net Present Value Method The following data are accumulated by Paxton Company in evaluating the purchase of $131,700 of equipment, having a four-year useful life:   Net Income Net Cash Flow Year 1 $44,000   $74,000   Year 2 27,000   57,000   Year 3 13,000   43,000   Year 4 (1,000)   29,000   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 value.…

Upper Division of Lower Company acquired an asset with a cost of $580,000 and a four-year life. The cash flows from the asset, considering the effects of inflation, were scheduled as follows.   Year Cash Flow 1 $ 210,000   2   250,000   3   285,000   4   320,000       The cost of the asset is expected to increase at a rate of 20 percent per year, compounded each year. Performance measures are based on beginning-of-year gross book values for the investment base. Ignore taxes.   Required: a. What is the ROI for each year of the asset's life, using a historical cost approach? b. What is the ROI for each year of the asset's life if both the investment base and depreciation are determined by the current cost of the asset at the start of each year?

Land: $9,397 Buildings: $20,722 Furnitures, Fixtures, and Equipment: $16,631 Other: $6,931 Accumulated Depreciation: $26,506 Net Property, Plant, and Equipment: 27,175 Sales: $134,752 a. Assuming a useful life of 10 years and no residual value, what is the expected amount of depreciation expense? answer to the nearest million. b. What is the fixed asset turnover ratio? answer to two decimal places. c. What is the average age of fixed assets? answer to two decimal places. d. What is depreciation expense as a percentage of net sales? answer to two decimal places.