A machine costs $25,000; it is expected to generate annual cash revenues of $8,000 and annual cash expenses of $2,000 for five years. The required rate of return is 12%. The net present value of the machine is: Select one: a. $(3,840). b. $(3,370). c. $0. d. $21,630. e. $28,840.

Q: A certain investment costs $3400. The investment produces income of $1500 at the end of the first…

A: Nothing is mentioned in this question with respect to the discount rates or finding the present…

Q: A project that provides annual cash flows of $2,500 for 10 years costs $10,000 today. At a required…

A: NPV. Net present value (NPV)   is calculated by deducting initial investment from present value of…

Q: An independent project has a net investment of $250,000, and generates net cash flows of $90,000 for…

A: Calculation of Net present value of the project: Answer: Net present value is $19,155.09

Q: A new drill press costs $12,000. It would potentially produce an additional $4,000 of revenue per…

A: Costs = $12,000 Revenue = $4,000 Operating Expenses = $1,200 Time period = 8 years  Rate = 10%

Q: Carson, Inc. invests in cost saving technology. Based on the data below, the annual cost savings…

A: The gain achieved from activities that lower an organization's overall spending on assets that…

Q: An investment costs $500,000 today and is expected to produce a one-time inflow at the end of year 8…

A: Investment amount (P) = $ 500000 Cash inflow after 8 years (FV) = $ 600000 Period (n) = 8 Years

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: Assume a company is going to make an investment of $450,000 in a machine and the following are the…

A: Payback period shows the number of years in which the amount invested gets recover.  Given that,…

Q: 1. Peach Co. spends $630,000 for a new catnip sorting machine. Peach Co. expects net cash inflows of…

A: Pay Back Period is one of the decision techniques in capital budgeting which helps in initial…

Q: A new machine will cost $750,000. The cash flows generated from this new machine are as follows:…

A: payback period = years before full period + (unrecovered cost at the start of the year /  cashflow…

Q: 1) A manufacturing plant manager has purchased a new bologna slicing machine for $24,500. The new…

A: Present worth (PW) means the actual amount is adjusted with the interest rate so as to get the…

Q: Company x uses machines to manufacture x. One machine costs $142,000 and lasts about 5 years before…

A: Cost of one machine=$142000Operating cost=$7000Economic life=5yearsDiscount rate=r=11%Find out…

Q: A new machine is expected to save $33,400 annually in labor can be justified for the purchase of…

A: In this we need to find out the Present value of savings.

Q: Consider the following two machines a company can purchase. The following table provides the costs…

A: Net present value (NPV) is a financial metric used to evaluate the profitability of an investment or…

Q: A poultry business project requires an initial investment of $75 000. The business generates the…

A: The net present value of the project is calculated as the present value of cash inflows minus the…

Q: A computer purchased for $1200 will have a salvage value of $600 after 6 years. Annual maintenance…

A: EUAC or Equivalent uniform annual cost is the annual cost associated with operating and maintaining…

Q: A machine has an initial investment of $1,300,000, annual revenue will be $500,000 and the annual…

A: Net present value or present worth of a project is the present value of cash inflows less present…

Q: Your company is considering the purchase of a $20,000 machine, assuming a five-year useful life and…

A: The objective of this question is to calculate the net present value (NPV) of the machine. The NPV…

Q: a. What is the PW(12%) ?

A: (a) Present worth of Investment @12& will be computed as below Particulars Y-1 Y-2 Y-3 Y-4…

Q: You are offered an asset that costs $150,000 and has cash flows of $1,350 at the end of every month…

A: IRR function = IRR(cashflows) NPV function = NPV(rate, cashflows) + initial cashflow Rate = 9%/12…

Q: You are planning to invest $12,000 in new equipment. The investment will generate cost savings of…

A: The correct answer is: (C) ($480)  Net present value = Present value of inflows - present value of…

Q: . A new computer is to be purchased for a lab. It costs $3,000. The software this machine needs will…

A: A cash flow diagram is a visual representation of the flow of cash in and out of an investment or…

Q: Assume a machine costs $250,000 and lasts five years before it is replaced. The operating cost is…

A: Present value annuity factor is calculated as follows:-PVAF = wherePVAF = present value annuity…

Q: #1: An investment will cost $10,000 today for equipment plus expenses for labor and materials at a…

A: Discounted payback period is a capital budgeting tool. Here we look at the time period that it takes…

Q: P 1

A: that a new machine will be purchased for  $ 60000, and will save income $ 10000, with required rate…

Q: A warchouse manager is evaluating 2 different robotic systems to be installed in his warehouse.…

A: Present worth analysis is an analysis in which we convert all the cash flows to present worth using…

Q: A equipment costs $35,000, O&M = $1500/year. Savings = $12,000/year. Salvage @ 5 years = $6500. Find…

A: Given:

Q: An energy management system that can save $8,040 per year for four (4) years, expenses are $2,000…

A: When a project has a positive rate of return, profitability is anticipated. In judging a project's…

Q: If the cost of the machine is 2000$ , i = 9% for ten year then the present worth will be(p). what is…

A: Given, I = 9% N = 10 FV = 2000   We will use the Present value formula to determine the present…

Q: The profitability index of a certain project is 1.2 with an investment of P 56,600. Cost of capital…

A: The profitability index (PI) is a financial tool to measure the profitability of a proposed…

Q: A project has estimated annual net cash flows of $65,700. It is estimated to cost $762,120.…

A: Cash payback period - Cash payback period = Initial investment/ cash flows per year    Cash payback…

Q: : of this investment will be paid using a $50,000 loan. The loan will in yearly installment for four…

A: in this we have to calculate cash flow for 4 th year.

Q: 1. Device A: Costs $12,000 and saves $3,000 annually. Its salvage value is $1,000 2. Device B: Costs…

A: Internal Rate of Return (IRR) is a capital budgeting technique that equates current cash outflows…

Q: A delivery truck has a book value of $8,000 in year 5. The purchase price of the truck is $40,000.…

A: annuity factor = 1/(1+r)n                                   —-———…

Q: Consider a machine that costs $1000 to purchase. The machine creates an annual operating expense of…

A: Correct answer is option (d) 9 years.

Q: Cecil company is considering the of a new machine. The machine cost $227,500 and will generate a…

A: Machine cost (C) = $227500 Cash inflow (A) = $35000

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.