Accounting Problem: Database systems is considering expansion into a new product line. Assets to support expansion will cost $500,000. It is estimated that Database can generate $1,200,000 in annual sales, with a 6 percent profit margin. What would net income and return on assets(investment) be for the year?
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Accounting Problem: Database systems is considering expansion into a new product line. Assets to support expansion will cost $500,000. It is estimated that Database can generate $1,200,000 in annual sales, with a 6 percent profit margin. What would net income and
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- Ans.mukaInnovation Company is thinking about marketing a new software product. Upfront costs to market and develop the product are $4.97 million. The product is expected to generate profits of $1.15 million per year for 10 years. The company will have to provide product support expected to cost $95,000 per year in perpetuity. Assume all profits and expenses occur at the end of the year. a. What is the NPV of this investment if the cost of capital is 6.1%? Should the firm undertake the project? Repeat the analysis for discount rates of 1.2% and 16.5%, respectively. b. What is the IRR of this investment opportunity? c. What does the IRR rule indicate about this investment?
- Innovation Company is thinking about marketing a new software product. Upfront costs to market and develop the product are $4.97 million. The product is expected to generate profits of $1.08 million per year for ten years. The company will have to provide product support expected to cost $99,000 per year in perpetuity. Assume all profits and expenses occur at the end of the year. a. What is the NPV of this investment if the cost of capital is 6.2%? Should the firm undertake the project? Repeat the analysis for discount rates of 1.6% and 14.2%, respectively. b. What is the IRR of this investment opportunity? c. What does the IRR rule indicate about this investment?Innovation Company is thinking about marketing a new software product. Upfront costs to market and develop the product are $4.98 million. The product is expected to generate profits of $1.15 million per year for 10 years. The company will have to provide product support expected to cost $99,000 per year in perpetuity. Assume all profits and expenses occur at the end of the year. a. What is the NPV of this investment if the cost of capital is 5.6% ? Should the firm undertake the project? Repeat the analysis for discount rates of 1.3% and 16.3%, respectively. b. What is the IRR of this investment opportunity? c. What does the IRR rule indicate about this investment? a. What is the NPV of this investment if the cost of capital is 6.2%? Should the firm undertake the project? Repeat the analysis for discount rates of 1.1% and 17.8%, respectively. If the cost of capital is 6.2%, the NPV will be $ (Round to the nearest dollar.) answer this Should the firm undertake the project? (Select the…Innovation Company is thinking about marketing a new software product. Upfront costs to market and develop the product are $4.94 million. The product is expected to generate profits of $1.07 million per year for 10 years. The company will have to provide product support expected to cost $99,000 per year in perpetuity. Assume all profits and expenses occur at the end of the year. What is the NPV of this investment if the cost of capital is 5.8%? Should the firm undertake the project? Repeat the analysis for discount rates of 1.7% and 14.1%, respectively. What is the IRR of this investment opportunity? What does the IRR rule indicate about this investment?
- K Innovation Company is thinking about marketing a new software product. Upfront costs to market and develop the product are $4.98 million. The product is expected to generate profits of $1.09 million per year for 10 years. The company will have to provide product support expected to cost $98,000 per year in perpetuity. Assume all profits and expenses occur at the end of the year. a. What is the NPV of this investment if the cost of capital is 5.6%? Should the firm undertake the project? Repeat the analysis for discount rates of 1.6% and 14.5%, respectively. b. What is the IRR of this investment opportunity? c. What does the IRR rule indicate about this investment? a. What is the NPV of this investment if the cost of capital is 5.6%? Should the firm undertake the project? Repeat the analysis for discount rates of 1.6% and 14.5%, respectively. If the cost of capital is 5.6%, the NPV will be $ (Round to the nearest dollar.) Should the firm undertake the project? (Select the best choice…Innovation Company is thinking about marketing a new software product. Upfront costs to market and develop the product are $5 million. The product is expected to generate profits of $1 million per year for 10 years. The company will have to provide product support expected to cost $100,000 per year in perpetuity. Assume all profits and expenses occur at the end of the year. (1) What is the NPV of this investment if the cost of capital is 6%? Should the firm undertake the project? Repeat the analysis for discount rates of 2% and 12%.(2) How many IRRs does this investment opportunity have? (3) Can the IRR rule be used to evaluate this investment? Explain.Suppose Francine Dunkleberg's Sweets is considering investing in warehouse management software that costs $450,000, has $35,000 residual value, and should lead to cost savings of $130,000 per year for its five-year life. In calculating the ROR, which of the following figures should be used as the equation's denominator (average amount invested in the asset)? a) $485,000 b) $242,500 c) $207500 d)$225000
- General AccountingHome Innovation is evaluating a new product design. The estimated receipts and disbursements associated with the new product are shown below. MARR is 10%/year. Solve, a. What is the annual worth of this investment? b. What is the decision rule for judging the attractiveness of investments based on annual worth? c. Should Home Innovations pursue this new product?Answer this financial accounting problem