A company is considering investing £46,000 in a machine that will be operated for 4 years, after which time it will sell for £4,000. Depreciation is charged on a straight line basis. Forecast operating cashflows are £28,000, £35,000, £25,000 and £9,000.   What is the Payback Period and the ARR based on average investment?     PP ARR A 1.5 years 52% B 2.4 years 55% C 2.4 years 52% D 1.5 years 55%

Q: Part II - Average Rate of Return (Ch 26) The management of River Corporation is considering the…

A: concept. average rate of return can be calculated in two ways:- 1. on basis of initial investment.…

Q: Assume a company is going to make an investment of $440,000 in a machine and the following are the…

A: Payback period is the period or number of years in which initial investment amount can be recovered…

Q: Alfarsi Industries uses the net present value method to make investment decisions and requires a 15%…

A: Net Present Value Net present value of the investment means difference between present values of…

Q: 2. An office building has the following investment characteristics: Year 1 NOI $2,100,000 $2,200,000…

A: Here, To Find: Purchase price =? Loan to value ratio =? Annual debt service =? Debt service…

Q: A company has two investment possibilities, with the following cash inflows: If the firm can earn 7…

A: We need to use the concept of time value of money to solve the question. According to the concept of…

Q: All techniques  Rieger International is evaluating the feasibility of investing​$91,000in a piece of…

A: Here, Cost of Capital is 8% Cash Flows are as follows:

Q: An investment product promises to pay $43,000 at the end of 8 years. If an investor feels this…

A: The future value formula:Future value = Investment ( 1+ r) nGiven,future value = $43000r is the…

Q: Below are two potential investment alternatives:   Initial capital investment…

A: Net Present Value(NPV) refers to one of the concepts from the modern techniques of capital budgeting…

Q: Question 1: A company invested $ 800,000 in a project, if the interest rate is 12% per year…

A: There are multiple questions but as per our protocol, only the first question is solved.The income…

Q: Topic: Annual Worth Analysis 1.) Determine the annual worth (per month) of a truck with an initial…

A: Solution Given Initial cost $38000 Operating cost per  month $2000 Salvage value at…

Q: What is the simple annual rate of return on a $10,000, 3-year investment with cash inflows of $2,000…

A: The simple annual rate of return is calculated by dividing the annual cash flow by the initial…

Q: NPV and maximum return A firm can purchase new equipment for $37,000 that generates an annual cash…

A: The present value function or concept can be used to determine the present value of a future sum or…

Q: Malema Pty Ltd, a furniture manufacturer, has been offered an opportunity to accept a project that…

A: Interest Rate = r = 12%Cash Flow for Year 1 = cf1 = 7000Cash Flow for Year 2 = cf2 = 8000Cash Flow…

Q: A man invests in a project that requires a fixed capital of P 2.5 M with no salvage, and life of 12…

A: Fixed Capital is of P2.5 million Life of project is 12 years Estmated maintenance cost is of…

Q: Intro A project requires an initial investment of $77.4 million to buy new equipment, and will…

A: The IRR method is used to measure the profitability of a project. It uses the NPV formula but…

Q: What is the internal rate of return (IRR) of an investment that requires an initial investment of…

A: Initial investment (PV) = $14,000Future value (FV) = $19,320Number of years = 1 years

Q: The present value of an annuity of $1 for 3 years at 15% is 2.2832 The net present value of…

A: Net Present Value: It represents the project's or investment's absolute profitability in amount.…

Q: Red Zone Corporation recently purchased a new machine for $339,0 13.20. The new equipment has a…

A: Internal rate of return is a capital budgeting technique used to assess the profitability of an…

Q: Question 1Real Estate Ltd is considering investing in property development, which requires an…

A: The objective of the question is to evaluate the financial viability of a property development…

Q: Minn is considering an investment proposal with the following cash flows: Initial investment -…

A: ACF = Annual net cash inflow = $25,000

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.