Survey Of Accounting
5th Edition
ISBN: 9781259631122
Author: Edmonds, Thomas P.
Publisher: Mcgraw-hill Education,
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Chapter 16, Problem 13E
Exercise 10-13A Determining the payback period with uneven
Currie Company has an opportunity to purchase a forklift to use in its heavy equipment rental business. The forklift would be leased on an annual basis during its first two years of operation. Thereafter, it would be leased to the general public on demand. Currie would sell it at the end of the fifth year of its useful life. The expected
Required
- a. Determine the payback period using the accumulated cash flows approach.
- b. Determine the payback period using the average cash flows approach. Round your computation to one decimal point.
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Students have asked these similar questions
Problem 6 - Shirt Corporation is considering purchasing equipment that costs $60,000 and is expected to provide
the following cash inflows over its five-year useful life:
Year
Cash Inflow
1
$18,000
2
$22,000
3
$24,000
4
$16,000
5
$ 9,000
Calculate the payback period for this investment.
Exercise 24-2 (Algo) Payback period, equal cash flows, and depreciation adjustment LO P1
Quary Company is considering an investment in machinery with the following information.
Initial investment
Useful life
Salvage value
Expected sales per year
Required A Required B
(a) Compute the investment's annual income and annual net cash flow.
(b) Compute the investment's payback period.
$ 380,000
Complete this question by entering your answers in the tabs below.
Annual Amounts
9 years
$ 20,000
19,000 units
Expenses
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.
Income
Net cash flow
Required A
$
Income
0
$
Cash Flow
Required B
>
0
$ 85,500
40,000
9,500
$ 10
Exercise 26-3 (Algo) Payback period and unequal cash flows LO P1
Beyer Company is considering buying an asset for $400,000. It is expected to produce the following net cash flows.
Year 2
$80,000
Year
Initial investment
Year 1
Year 2
Year 3
Year 4
Year 5
Total
Year 1
$80,000
Net cash flows
Compute the payback period for this investment.
Note: Cumulative net cash outflows must be entered with a minus sign. Round your Payback Period answer to 2 decimal places.
Net Cash Flows
$
(400,000)
Payback period=>
Year 3
$70,000
Cumulative Cash
Flows
Year 4
$200,000
Year 5
$15,000
Chapter 16 Solutions
Survey Of Accounting
Ch. 16 - Prob. 1QCh. 16 - Prob. 2QCh. 16 - Prob. 3QCh. 16 - 4. Define the term return on investment. How is...Ch. 16 - Prob. 5QCh. 16 - Prob. 6QCh. 16 - Prob. 7QCh. 16 - Prob. 8QCh. 16 - Prob. 9QCh. 16 - Prob. 10Q
Ch. 16 - 11. Maria Espinosa borrowed 15,000 from the bank...Ch. 16 - Prob. 12QCh. 16 - 13. What criteria determine whether a project is...Ch. 16 - Prob. 14QCh. 16 - Prob. 15QCh. 16 - Prob. 16QCh. 16 - 17. What is the relationship between desired rate...Ch. 16 - Prob. 18QCh. 16 - Prob. 19QCh. 16 - Prob. 20QCh. 16 - Prob. 21QCh. 16 - Prob. 22QCh. 16 - Prob. 23QCh. 16 - Exercise 10-1A Identifying cash inflows and...Ch. 16 - Exercise 10-2A Determining the present value of a...Ch. 16 - Prob. 3ECh. 16 - Prob. 4ECh. 16 - Exercise 10-5A Determining net present value...Ch. 16 - Exercise 10-6A Determining net present value Aaron...Ch. 16 - Exercise 10-7A Using the present value index Rolla...Ch. 16 - Exercise 10-8A Determining the cash flow annuity...Ch. 16 - Prob. 9ECh. 16 - Exercise 10-10A Using the internal rate of return...Ch. 16 - Prob. 11ECh. 16 - Prob. 12ECh. 16 - Exercise 10-13A Determining the payback period...Ch. 16 - Prob. 14ECh. 16 - Prob. 15ECh. 16 - Prob. 16PCh. 16 - Prob. 17PCh. 16 - Problem 10-18A Postaudit evaluation Brett Collins...Ch. 16 - Problem 10-19A Using net present value and...Ch. 16 - Problem 10-20A Using the payback period and...Ch. 16 - Problem 10-21A Using net present value and payback...Ch. 16 - Problem 10-22A Effects of straight-line versus...Ch. 16 - Problem 10-23A Comparing internal rate of return...Ch. 16 - Prob. 1ATCCh. 16 - ATC 10-4 Writing Assignment Limitations of capital...Ch. 16 - Prob. 5ATC
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