Subject: accounting 3incesLinda's Luxury Travel (LLT) is considering the purchase of two Hummer limousines, Various information about the proposed investmentfollows:Initial investment (2 limos)Useful life.Salvage valueAnnual net income generatedLLT's cost of capital$ 900,00010 years$ 120,000$ 76,50014%Assume straight line depreciation method is used.Required:Help LLT evaluate this project by calculating each of the following:1. Accounting rate of return.2. Payback period.3. Net present value.4. Without making any calculations, determine whether the IRR is more or less than 14%.Complete this question by entering your answers in the tabs below.Required 1 Required 2 Required 3Calculate accounting rate of return. (Round your answer to 1 decimal place.)Accounting Rate of ReturRequired 4%< Required 1Required 2 >

Accounting rate of return (ARR):- It is a capital budgeting formula that is used to determine the…

Answered: 1. Accounting rate of return. 2.…

Business

Accounting

1. Accounting rate of return. 2. Payback period. 3. Net present value.

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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Linda’s Luxury Travel (LLT) is considering the purchase of two Hummer limousines. Various information about the proposed investment follows: Initial investment (2 limos) $ 1,080,000 Useful life 10 years Salvage value $ 120,000 Annual net income generated 95,040 LLT’s cost of capital 15 % Assume straight line depreciation method is used. Required:Help LLT evaluate this project by calculating each of the following: 1. Accounting rate of return. (Round your percentage answer to 1 decimal place.) 2. Payback period. (Round your answer to 2 decimal places.) 3. Net present value. (Future Value of $1, Present Value of $1, Future Value Annuity of $1, Present Value Annuity of $1.) (Use appropriate factor(s) from the tables provided. Do not round intermediate calculations. Cash Outflows and negative amounts should be indicated by a minus sign. Round your "Present Values" to the nearest whole dollar amount.)
Linda’s Luxury Travel (LLT) is considering the purchase of two Hummer limousines. Various information about the proposed investment follows: Initial investment (2 limos) $ 1,500,000 Useful life 10 years Salvage value $ 140,000 Annual net income generated $ 142,500 LLT’s cost of capital 14 % Assume straight line depreciation method is used. Required: Help LLT evaluate this project by calculating each of the following: 1. Accounting rate of return. 2. Payback period. 3. Net present value. 4. Without making any calculations, determine whether the IRR is more or less than 14%.
Linda's Luxury Travel (LLT) is considering the purchase of two Hummer limousines. Various information about the proposed investment follows: Initial investment (2 1imos) $ 840,000 Useful life: 10 years Salvage value $ 120,000 Annual net income generated LLT's cost of capital $ 70,560 14% Assume straight line depreciation method is used. Required: Help LLT evaluate this project by calculating each of the following: 1. Accounting rate of return. 2. Payback period. 3. Net present value. 4. Without making any calculations, determine whether the IRR is more or less than 14%. Complete this question by entering your answers in the tabs below.
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please answer all subparts because i cant post last subpart separately as it is interlinked with all of your calculaions please thanku
Linda's Luxury Travel (LLT) is considering the purchase of two Hummer limousines. Various information about the proposed investment follows: Initial investment (2 limos) Useful life Salvage value Annual net income generated LLT's cost of capital $1,140,000 $ 130,000 $ 101,460. 14% 1. Accounting rate of return. 2. Payback period. 10 years Assume straight line depreciation method is used. Required: Help LLT evaluate this project by calculating each of the following: 3. Net present value. 4. Without making any calculations, determine whether the IRR is more or less than 14%.
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Linda's Luxury Travel (LLT) is considering the purchase of two Hummer limousines. Various information about the proposed investment follows: Initial investment (2 limos) Useful life. Salvage value Annual net income generated. LLT's cost of capital $1,800,000 $ 140,000 180,000 $ 15% 1. Accounting rate of return. 2. Payback period. 10 years Assume straight line depreciation method is used. Required: Help LLT evaluate this project by calculating each of the following: 3. Net present value 4. Without making any calculations, determine whether the IRR is more or less than 15% Complete this question by entering your answers in the tabs below. Required 4 Required 1 Required 2 Required 3 Calculate accounting rate of return. (Round your answer to 1 decimal place.) Accounting Rate of Return
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Required information [The following information applies to the questions displayed below.] Montego Production Company is considering an investment in new machinery for its factory. Various information about the proposed investment follows: Initial investment Useful life Salvage value Annual net income generated Montego's cost of capital Assume straight line depreciation method is used. Help Montego evaluate this project by calculating each of the following: $ 860,000 6 years Net Present Value $ 20,000 $ 66,000 11% Required: 4. Recalculate Montego's NPV assuming its cost of capital is 12 percent. (Future Value of $1, Present Value of $1. Future Value Annuity of $1, Present Value Annuity of $1.) Note: Use appropriate factor(s) from the tables provided. Negative amount should be indicated by a minus sign. Round your answer to 2 decimal places.
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