A project will cost $100,000 and will last 5 years with no salvage value:RevenuesSalesOperating Expenses:Rent ExpenseDepreciation ExpenseMiscellaneous ExpenseTotal ExpensesNet Income$70,000$30,00010,0008,00048,000$22,000Instructionsa. Calculate the expected annual rate of return on this project showing calculations tosupport your answer.b. Calculate the cash payback on this project showing calculations to support your answer.

Answered: A project will cost $100,000 and will…

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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Stern Associates is considering a project that has the following cash flow data. What is the project's payback? Year 0 1 2 3 4 5 Cash flows -$950 $380 $390 $400 $410 $420 a. 3.45 years b. 1.55 years c. 2.45 years d. 2.55 years e. 1.23 years
Calculating IRR, payback, and a missing cash flow. the merriweather printing company is trying to decide on the merits of constructing a new publishing facility. The project is expected to provide a series of positive cash flows for each of the next four years. The estimated cash flows associated with this project are as follows. year. Project cash flows 0 ? 1 $780,000 2 $420,000 3 $310,000 4 $480,000 if you know that the project has a regular payback of 2.6 years, what is the project's IRR?
Findell Corporation is considering two projects, A and B, and it has gathered the following estimates for the projects Project A 5 years $84,480 $64,000 Project B 5 years $57,300 $50,000 Useful life Present value of cash inflows Present value of cash outflows What is the present value index for Project A?
Please answer the following questions using the information below: NPV. Using a 10% required rate of return, calculate the NPV for this project. Should it be accepted or rejected? PI. Calculate the Profitability Index (PI) for this project. Should it be accepted or rejected? Consider the following cash flows: Year 0 1 2 3 4 5 6 Cash Flow -$8,000 $3,000 $3,600 $2,700 $2,500 $2,100 $1,600 Payback. The company requires all projects to payback within 3 years. Calculate the payback period. Should it be accepted or rejected? Discounted Payback. Calculate the discounted payback using a discount rate of 10%. Should it be accepted or rejected? IRR. Calculate the IRR for this project. The company’s required rate of return is 10%. Should it be accepted or rejected? NPV. Using a 10% required rate of return, calculate the NPV for this project. Should it be accepted or rejected? PI. Calculate the Profitability Index (PI) for this project. Should it be accepted or rejected?…
d) ALMOND Company is considering two important proposals with the following cash flows. Project A Project B Period (Year) Cost (Initial Net cash flow Cost (Initial Outlay) Net cash flow Outlay) 0 $45,000 $60,000 1 $25,000 $24,000 2 $20,000 $25,000 3 $15,000 $30,000 For each project, compute its net present value using a discount rate of 15%. Which project should be accepted if the projects are mutually exclusive?
2. (a) You want to set-up a scholarship fund that will support $20000/year for an infinite period. The fund is expected to earn 8% return per year forever. What initial investment is needed to set-up the scholarship fund? Find the value of (P/A,1/2%, ∞). (b) Estimate the depreciation schedule of a machine with an initial cost of $100,000, useful life of 8 years and a salvage value of $30,000. Use the double declining balance method to develop the depreciation schedule.
You are considering a project that has the following cash flow data. What is the project's payback? Year 0 1 2 3 Cash Flow -900 350 450 550 Group of answer choices 2.40 1.53 1.96 2.18 2.62
In your first job with TBL Inc. your task is to consider a new project whose data are shown below. What is the project's Year 1 cash flow? The annual operating cash flows of the project can be calculated as follows: OCF = {[Sales - Operating Costs]*(1-Tax Rate)} + (Depreciation * Tax Rate) Sales revenues $225,250 Depreciation $72,602 Other operating costs $92,000 Tax rate 28%
Please provide correct solution for correct answer
Suzanne's Cleaners is considering a project that has the following cash flow data. What is the project's payback? Year 0 1 2 3 4 5 Cash flows -$1,100 $300 $310 $320 $330 $340 2.85 years 3.16 years 3.52 years 2.31 years 2.56 years
Below are information relating to three (3) possible projects. Evaluate the projects by filling up the blanks provided for the final answers. Show computations in the yellow pad. Net Cash outlay Annual net cash inflows Annual depreciation expense Expected recovery period Cost of capital Discounted payback period Internal rate of return (approximate) Net Present Value (NPV) Simple Accounting Rate of Return Ranking May P300,000 50,000 20,000 10 years 16% June P120,000 35,000 18,000 6 years 18% Dianay P150,000 55,000 25,000 5 years 22%

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