A machine shop wishes to set aside money now to invest over the next 4years in automating its customer service department. They now earn 10% ona lump sum deposited, and they wish to withdraw the money in thefollowing increments:Year 1: $25,000 to purchase a computer and database software designed forcustomer service useYear 2: $3000 to purchase additional hardware to accommodate growth inthe use of the systemYear 3: No expensesYear 4: $5000 to purchase software upgrades.1- Draw the cash flow diagram2- How much money must be deposited now to cover the anticipatedpayments over the next 4 years?

Time Value of money :— According to this concept, value of money in present day is greater than…

Answered: A machine shop wishes to set aside…

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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Safe Driving School is considering purchasing new autos costing $235,000. The company's management has estimated that the autos will generate cash flows as follows: $ 80,000 $ 85,000 $ 95,000 $ 45,000 Year 1 Year 2 Year 3 Year 4 Considering the residual value is zero, calculate the payback period. Round to one decimal place
Mr. J's Bagels invested in a new oven for $26,000. The oven reduced the amount of time for baking which increased production and sales for five years by the following amounts of cash inflows: Year 2 Year 3 $10,000 $8,000 Year 1 $14,000 Year 4 $10,000 Year 5 $8,000 Using the averaging method, the payback period for the investment in the oven would be: Multiple Choice O 5.00 years. O 2.00 years. 0.50 years. 2.60 years.
help defray the expected cost expense of a complete plant renovation in 20 years, a company deposits R5000 at the end of each year in a sinking fund which credits interest at 5% effective. After 8 years of such payments, rising costs of material and labor lead the directors to increase the annual deposits to R7500. How much will the fund contain at the end of 20 years?
Hello can you please walk me through how to do this the annual income is 20,000 It is wise to set aside 7.5% of gross monthly income for 401 k investment. Assume the investment earns a 5% annual return and use Excel to determine the balance after 40 years for the unskilled worker and for your expected income. Then use Excel to determine how many years it would take for the unskilled worker and for your expected investment to reach $500,000.
Scenario Sinking funds are used to provide money to pay off a loan in one lump sum or to accumulate money to build new factories, buy equipment, and so on. The payment needed at the end of each period to accumulate a fixed amount in a sinking fund at a specific future date is found as follows. Answer the following question and explain your steps toward the solution: A business needs $450,000 in five years. How much should be deposited each quarter in a sinking fund that earns 9% compounded quarterly to have this amount in five years?
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A professional sports team has $1,000,000 to spend on renovations. Assume the team has a rate of return of 6%. If the team can spend the $1,000,000 on a museum demonstration of their history and honors, and this museum would generate $15,000 monthly revenue for seven years, would this be a good use of the $1,000,000? Why?
You may attempt this question 2 more times for credit. A firm has invested $700 in a new machine that is expected to last for the next 4 years. The machine will be depreciated on a straight line basis down to zero by the end of its 4 year life. The firm projects that the machine will generate consecutive annual cash inflows of $700 beginning in one year and will generate consecutive annual cash outflows at 290 also beginning in one year.. Assuming the tax rate of 33%, determine the firm's cash flow next year. Place your answer to dollars and cents. Do not include a dollar sign or a comma in your answer.
Subject - account Please help me. Thankyou.
A restaurant is considering the purchase of a new stove. The cost of the stove is $28,000. The stove would decrease annual operating costs by $2,000 and generate $8,000 of annual cash sales. Maintenance for the new stove would be $1,000 per year. The old stove would be sold for $1,000. What is the payback period? Group of answer choices 3.5 years 2.5 years 28 years 2.8 years
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