General accounting question A retail company is considering a new inventory managementsystem that requires an initial investment of $72,000. The system isexpected to generate annual net cash inflows of $18,000 for 5 years.The company's cost of capital is 12%. What is the simple paybackperiod? Round your answer to two decimal places.

Calculation of Simple Payback PeriodPayback Period = Initial Investment / Annual Net Cash Inflow…

Answered: A retail company is considering a new…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 1PA: Your company is planning to purchase a new log splitter for is lawn and garden business. The new...

See similar textbooks

Similar questions

A grocery store is considering the purchase of a new refrigeration unit with an Initial Investment of $412,000, and the store expects a return of $100,000 in year one, $72000 in years two and three, $65,000 in years four and five, and $38,000 in year six and beyond, what is the payback period?
Assume a company is going to make an investment of $450,000 in a machine and the following are the cash flows that two different products would bring in years one through four. Which of the two options would you choose based on the payback method?
A restaurant is considering the purchase of new tables and chairs for their dining room with an initial investment cost of $515,000, and the restaurant expects an annual net cash flow of $103,000 per year. What is the payback period?
A company has just sold a product with the following payment plan: $75, 000 today, $50, 000 at the end of year 1. and $25, 000 at the end of year two. If the payments are deposited into an account earning 4.5% per year, calculate the present value for the cash flow. Show steps using ONLY a financial calculator. The answer should be 145,740.
Your company is planning to purchase a new log splitter for its lawn and garden business. The new splitter has an initial investment of $204,000. It is expected to generate $30,000 of annual cash flows, provide incremental cash revenues of $125,080, and incur incremental cash expenses of $70,000 annually. What is the payback period and accounting rate of return (ARR)? Round your answers to 1 decimal place. Payback period fill in the blank 1 years ARR fill in the blank 2%
Incognito Company is contemplating the purchase of a machine that provides it with cash savings of $87,000 per year for five years. Interest is 10%. Assume the cash savings occur at the end of each year. Required: Calculate the present value of the cash savings. Note: Use tables, Excel, or a financial calculator. Round your final answer to the nearest whole dollar. (EV of $1. PV of $1. FVA of $1. PVA of $1. EVAD of $1 and PVAD of $1) Present value
Need help
I want to this question answer general accounting
You are offered an asset that costs $150,000 and has cash flows of $1,350 at the end of every month for the next 6years. Assume the cost of capital is 9percent per year.a. What is the IRR of the asset?b. What is the NPV of the asset? c. If your cost of capital is 12percent, should you purchase it? (Setup cash flows in Excel spreadsheets and uses the following Excel Financial functions, IRR, and NPV to derive your answers.
Need answer please
Your company is expected to earn (as a cash flow) $3 million next year, $3.06 million the following year, $31212 the year after that, and it will continue to grow by 2% per year indefinitely. Using a discount rate of 8%, what is the value of the сompany? (Do not round intermediate calculations. Report your result in millions of dollars. Round the final answers to 2 decimal places. Omit $ sign and the word "million" in your response. For example, if your answer is $1,234,567 just write 1.23)
Vishano

SEE MORE QUESTIONS

Recommended textbooks for you

Principles of Accounting Volume 2

Accounting

ISBN:

9781947172609

Author:

OpenStax

Publisher:

OpenStax College

Principles of Accounting Volume 2

Accounting

ISBN:

9781947172609

Author:

OpenStax

Publisher:

OpenStax College

SEE MORE TEXTBOOKS