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An 8-year project is estimated to cost $320,000 and have no residual value. If the
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- Required information A project has a first cost of $670,000, a salvage value of 27% of the first cost after 3 years, and annual (GI-OE) of $275,000. Assume the company has a Te of 37%. Determine the approximate after-tax rate of return (ROR). The after-tax rate of return (ROR) is determined to beAn 8-year project is estimated to cost $384,000 and have no residual value. If the straight-line depreciation method is used and the average rate of return is 16%, determine the average annual income. $fill in the blank 1An eight-year project is estimated to cost $416,000 and have no residual value. If the straight-line depreciation method is used and the average rate of return is 11%. Determine the estimated annual net income.$fill in the blank 1
- Year Operating Income 1 $ 61,400 2 51,400 36,400 26,400 (3,600) $172,000 3 4 5 Total Year 1 2 3 4 5 6 Warehouse 7 8 9 10 Required: Each project requires an investment of $368,000. Straight-line depreciation will be used, and no residual value is expected. The committee has selected a rate of 15% for purposes of the net present value analysis. Present Value of $1 at Compound Interest 6% 10% 0.943 0.890 0.840 0.751 0.592 0.558 0.909 Warehouse Warehouse Net Cash Flow Tracking Technology $135,000 125,000 110,000 100,000 70,000 $540,000 0.386 0.826 0.797 0.756 0.694 0.712 0.658 0.579 0.792 0.683 0.636 0.572 0.482 0.747 0.621 0.567 0.497 0.402 0.705 0.564 0.507 0.432 0.665 0.513 0.452 0.376 0.627 0.467 0.404 0.327 0.424 Technology Operating Income 12% $ 34,400 34,400 34,400 34,400 34,400 $172,000 15% 20% 0.893 0.870 0.833 0.335 0.279 0.233 0.361 0.284 0.194 0.322 0.247 Total present value of net cash flow $ Amount to be invested Net present value 2. The 1a. Compute the average rate of return…Réquired intormation [The following information applies to the questions displayed below.] Project A requires a $320,000 initial investment for new machinery with a five-year life and a salvage value of $30,500. The company uses straight-line depreciation. Project A is expected to yield annual net income of $29,700 per year for the next five years. Compute Project A's accounting rate of return. Accounting Rate of Return Choose Numerator: Choose Denominator: Accounting Rate of Return Accounting rate of returnConsider a project with a life of 3 years with the following information: initial fixed asset investment = salvage value; price = $35; variable costs $13; fixed costs = $112,000; quantity sold = 53,760 units; tax rate = 23 percent. How sensitive is OCF to changes in quantity sold? $320,000; straight-line depreciation to zero over the 3-year life; zero Multiple Choice $21.85 $0.06 $19.31
- The amount of the estimated average income for a proposed investment of $60,000 in a fixed asset, giving effect to depreciation (straight-line method), with a useful life of four years, no residual value, and an expected total income yield of $21,300, is a.$15,000 b.$21,300 c.$5,325 d.$8,700 Proposals A and B each cost $600,000 and have five-year lives. Proposal A is expected to provide equal annual net cash flows of $159,000, while the net cash flows for Proposal B are as follows: Year 1 $150,000 Year 2 140,000 Year 3 110,000 Year 4 150,000 Year 5 50,000 $600,000 Determine the cash payback period for each proposal. Round your answers to two decimal places, if necessary. Proposal A: __ years Proposal B: __ years Below is a table for the present value of $1 at Compound interest. Year 6% 10% 12% 1 0.943 0.909 0.893 2 0.890 0.826 0.797 3 0.840 0.751 0.712 4 0.792 0.683 0.636 5 0.747 0.621 0.567 Below is a table…Consider a project with a life of 4 years with the following information: initial fixed asset investment = $370,000; straight - line depreciation to zero over the 4 - year life; zero salvage value; price = $26; variable costs = $18; fixed costs $177,600; quantity sold = 85,248 units; tax rate 25 percent. How sensitive is OCF to changes in quantity sold? Multiple Choice $6.84 $6.00 $4.26 $0.17 $7.74A new project has an initial cost of $250,000. The equipment will be depreciated on a straight-line basis to a zero book value over the five-year life of the project. The projected net income each year is $13,250, $18,000, $20,240, $15,150, and $11,900, respectively. What is the average accounting return? Multiple Choice 11.52% 8.95% 13.46% 12.57% 5.33%
- Question 1 Calculate the present worth of the project cost. $80/ft.² ($861/m²) 100,000 ft.² (9,290m²) Initial cost of building Building size Cost of real estate (not included) Interest rate 12% 20 years Life cycle Cost of maintenance, operations, etc. Average $6.00/ft.² ($64.58/m²) Design 4.5% Indirect construction costs 10% Alteration and replacement costs $1,500,000 every ten yearsQuestion Completion Status: The XYZ Company is considering investing in two alternative projects: Project 1 W $400,000 5 B. C. D. Investment Useful life (years) Estimated annual net cash inflows for useful life Residual value Depreciation method Required rate of return What is the payback period for Project 2? 16.00 years 4.00 years 5.00 years 4.70 years $100,000 $25,000 Straight- line 12% Project 2 $250,000 6 $50,000 $15,000 Straight- line 8%Given the following information and assuming straight-line depreciation to zero, what is the IRR of this project? Initial investment = $400,000; life = four years; cost savings = $125,000 per year; salvage value = $20,000 in year 5; tax rate = 34%; discount rate = 12%.Multiple Choice7.51%9.43%10.24%6.25%8.15%