accounting rate of return
Q: ezero salvage value. It would offer the following profics to the comp NET PROFIT 68.000 -52.000…
A: Net Present Value and Payback period are used in capital budgeting to evaluate the profitability of…
Q: What is the purchase price of the machine?
A: Purchase price of the machine or any asset is the cost of the asset which has been paid by the…
Q: Jark Corporation has invested in a machine that cost $58,000, that has a useful life of five years,…
A: Payback period is calculated as initial investment divided by annual net cash flows.
Q: The NPV of the replacement is $ ?
A: Net present value is the difference of discounted cash inflows and outflows.
Q: Martin Corporation is considering an investment in new equipment costing $155,000. The equipment…
A: Payback period is the length of time in which an investment reaches its break-even point. In other…
Q: Doug's Custom Construction Company is considering three new projects, each requiring an equipment…
A: The payback period is the formula used by the investor to determine the number of years to be taken…
Q: Saint John River Shipyard's welding machine is 15 year old, is fully depreciated, and has no salvage…
A: Net Present Value (NPV) is a financial measure used to analyze the profitability of an investment by…
Q: Jark Corporation has invested in a machine that cost $77,000, that has a useful life of eleven…
A: A simple rate of return is defined as the incremental net expected return divided by its actual…
Q: A business firm is contemplating to purchase new equipment. The purchase price is 60,000 and its…
A: The question pertains to the concept of capital budgeting tools and time value of money and has been…
Q: The management of Niagra National Bank is considering an investment in automatic teller machines.…
A: There are number of projects evaluated on the basis of capital budgeting technique. One of the…
Q: Frost Company is evaluating the purchase of a rebuilt spot-welding machine to be used in the…
A: IRR is a rate at which the present value of all cash inflows is almost equal to the initial…
Q: A management company is considering purchasing a $27,000 machine that would reduce operating costs…
A: Solution: -1 Calculation of the net present value of the investment of the machine.
Q: ul life of 5 years and a salvage value of $5,000. The machine is expected to generate annual net…
A: Payback period is the period required to recover the initial amount of investment in the equipment.…
Q: A company is considering replacing an existing machine with a more modern one. The tax rate is 40%.…
A: Let's proceed with the calculations.The Net Present Value (NPV) of replacing the old machine with…
Q: The Valentine Company has decided to buy a machine costing $20,000. Estimated cash savings from…
A: RR is also known as Net Present Value. It is a capital budegting technqiues which helps in decision…
Q: A project has to sell a machine that is obsolete. The market department finds a buyer who is willing…
A: The book value of an asset is the original cost of the asset less accumulated depreciation of the…
Q: Another new freezer is required by a mini-mart, and the first expenditure will be $300,000.…
A: Accounting rate of return = Incremental incomeInvestmentIncremental income = Incremental revenues…
Q: $22,000.
A: The answer is $22000
Q: Wright Corp. Is considering the purchase of a new plece of equipment, which would have an Initial…
A: The question is based on the concept of Financial Management. Payback period is the period in which…
Q: The company is considering a new computer system that has an inital investment of $50,000. Annual…
A: Step 1:We have to list all the following given:Incremental Revenue = $12,000Operating Expense =…
Q: A machine can be purchased at t=0 for $20,000. The estimated life is 15 years, with an estimated…
A: While evaluating the project, cash inflow should be higher than cash outflow in present value terms.…
Q: A company is planning to spend P60,000 for a machine which will be depreciated on a straight-line…
A: Introduction: The accounting rate of return (ARR), a capital budgeting metric, is used to determine…
Q: A company buys a machine for $80,000 that has an expected life of 10 years and no salvage value. The…
A: Formula: Accounting rate of return = Net Income after tax / Average investment. Division of average…
Q: Trading securities, by definition, are properly classified in the statement of financial position…
A: Statement of financial position is also known as balance sheet, which is prepared at the year-end to…
Q: Compute the net present value of each project. (Enter negative amounts using either a negative sign…
A: Payback period is the time period it takes for company to recover the amount invested in the…
Q: An asset in the five-year MACRS property class cost $100,000 and has a zero estimated salvage value…
A: Present worth is the worth in current time of the amount which is expected to be received in some…
Q: 2. Super Apparel wants to replace an old machine with a new one. The new machine would increase…
A: The objective of the question is to calculate the Accounting Rate of Return (ARR) for the new…
Q: A manufacturer is contemplating the purchase of either of two machines at a cost of Kshs 155 million…
A: Cost of Capital (r) = 15% p.a. Initial Outflow of Machines Machine A= 155 Machine B= 180 Calculation…
Q: TXY Inc, recently purchased a new delivery truck. The new truck cost $25,000., and it is expected to…
A: Net present value = Present value of cash in flows - present value of cash outflowsif the truck not…
Q: Flounder’s Custom Construction Company is considering three new projects, each requiring an…
A: a) Payback period is calculated by first finding the cumulative cash flows and then using the below…
Q: The following data is associated with a proposed replacement project: A machine that originally cost…
A: Machine original cost =25,000 Life of assets =5 year Market value now= 12000 Tax rate =34%
Q: 8 to 12 years. Evaluate the sensitivity of PW by varying: a) MARR, while assuming a constant n value…
A: Minimum Acceptable Rate of Return : > MARR is a way to assess whether an Investment is worth the…
Q: ows, net of expenses, by $50,000 per year. The machine would have a five-year useful life and no…
A: Internal rate of return can be computed using RATE function in excel. RATE function will compute…
Q: A machine has a first cost of $10,000 and an expected salvage value of $900 when it is sold.…
A: Payback period is the period which depicts the recovery period within which the cash outflows of the…
Q: MRAC is planning an investment in a machine. The machine has an invoice price of $120,000. The site…
A: Capitalized Cost - It is defined as present worth of project that has very long life at the time of…
Q: 2. Super Apparel wants to replace an old machine with a new one. The new machine would increase…
A: The objective of the question is to calculate the Accounting Rate of Return (ARR) for the new…
Q: pany has purchased a machine at the cost of $35,000. The machine is expected to provide annual…
A: NPV is net present value and is most used capital budgeting method being used and based on the time…
Q: Avalon Inc. is considering a new investment. The initial cost of the machinery is $184,000. Avalon…
A: Initial cost = $184,000 Useful life = 5 Year Salvage Value = $10,000 Annual depreciation expense =…
Q: Astor Industries plans to automate its production process. The new equipment will cost $460,000 and…
A: NET PRESENT VALUE Net Present Value is one of the Important Capital Budgeting Technique. Net…
Q: Raliegh, a nonprofit organization, estimates that it can save $23,000 a year in cash operating costs…
A: b.) Payback PeriodPayback period = Initial Investment /Cash Inflow= 90000 / 23000= 3.9130 yearsc.)…
Q: A project has to sell a machine that is obsolete. The market department finds a buyer who is willing…
A: The after-tax salvage value of the machine is $74,800.Explanation:To find the after-tax salvage…
Q: Assume that a company purchased a new machine for $26,000 that has no salvage value. The machine is…
A:
a manufacturing company bought a new machine for $150,000. the machine will last ten years and will be
Requirement: what is the accounting
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- Hello. Need help with the solution to question. Calculate the annual straight-line depreciation for a machine that costs $30,000 and has installation and shipping costs that total $2,000. The machine will be depreciated over a period of 15 years. The company’s marginal tax rate is 40 percent. Round your answer to the nearest dollar.Bassinger Company plans to buy a new machine for $60,000 that will have an estimated useful life of 3 years and no salvage value. The expected cash inflow is $24,000 annually. Bassinger Company has a cost of capital of 12%. Given that the present value of $1 after 3 periods at 12% is 0.71178, and the present value of an annuity for 3 periods at 12% is 2.40183, the profitability index is: 000 0.04 1.96 1.04 0.28 0.96Please help me
- Follow the format shown in Exhibit 12B.1 and Exhibit 12B.2 as you complete the requirement below. Woodard Company wants to buy a numerically controlled (NC) machine to be used in producing specially machined parts for manufacturers of trenching machines. The outlay required is $700,000. The NC equipment will last five years with no expected salvage value. The expected after-tax cash flows associated with the project follow: Year Cash Revenues Cash Expenses 1 2 3 4 5 $1,400,000 1,400,000 1,400,000 1,400,000 1,400,000 $1,200,000 1,200,000 1,200,000 1,200,000 1,200,000 Required: Compute the investment's Net Present Value, assuming a required rate of return of 8 percent. Round present value calculations and your final answer to the nearest dollar. NPV = $ XFoster Company wants to buy a special automated machine to replace an existing manual system. The initial outlay (cost) is $3,500,000. The new machine will last 5 years with no expected salvage value. The expected annual cash flows are as follows: Year Cash Inflow Cash Outflow 0 $ - $ 3,500,000.00 1 $ 3,900,000.00 $ 3,000,000.00 2 $ 3,900,000.00 $ 3,000,000.00 3 $ 3,900,000.00 $ 3,000,000.00 4 $ 3,900,000.00 $ 3,000,000.00 5 $ 3,900,000.00 $ 3,000,000.00 Foster has a cost of capital equal to 10%. 1. Calculate the payback period. Payback period: yearsA machine costs $600,000 and is expected to yield an after-tax net income of $23,000 each year. Management predicts this machine has a 12-year service life and a $120,000 salvage value, and it uses straight-line depreciation. Compute this machine's accounting rate of return. Choose Numerator: Annual after-tax net income $ 1 23,000 / Accounting Rate of Return Choose Denominator: Annual average investment $ = 360,000 = Insert
- StepwiseManagement is contemplating the purchase of a new oven which cost $25,000 with an estimated salvage value of zero. Expected before tax cash savings from the new oven are $4,000 a year over its full depreciable life. Depreciation is computed using straight line over a 5 year life, and the cost of capital is 10%. At the end of the oven's life, it can be sold for $2,000. Assume a 40% tax rate. 4. What is the net present value of the new oven? IRR?2. Super Apparel wants to replace an old machine with a new one. The new machine would increase annual revenue by $200,000 and annual operating expenses by $80,000. The new machine would cost $400,000. The estimated useful life of the machine is 10 years with zero salvage value. i. Compute Accounting Rate of Return (ARR) of the machine using above information. ii. Should Super Apparel purchase the machine if management wants an Accounting Rate of Return of 19% on all capital investments? Hint: Use Average Income or Profit after deducting tax, depreciation, and operating expenses.
- One year ago, your company purchased a machine used in manufacturing for $115,000. You have learned that a new machine is available that offers manyadvantages; you can purchase it for $160,000 today. It will be depreciated on a straight-line basis over ten years, after which it has no salvage value. You expect that the new machine will contribute EBITDA (earnings before interest, taxes, depreciation, and amortization) of $45,000 per year for the next ten years. The current machine is expected to produce EBITDA of $22,000 per year. The current machine is being depreciated on a straight-line basis over a useful life of 11 years, after which it will have no salvage value, so depreciation expense for the current machine is $10,455 per year. All other expenses of the two machines are identical. The market value today of the current machine is $50,000. Your company's tax rate is 35%, and the opportunity cost of capital for this type of equipment is 11%. Is it profitable to…A machine costs $100,000 and generates $25,000 of pre-tax operating income per year. The tax rate is 40%. The machine is in a CCA class with a 20% rate. The cost of capital is 12%. The machine is expected to last 10 years and will have no salvage value. Other assets will remain in the asset class. What is the NPV of the machine?A certain company is considering the use of a concrete electric pole in the expansion of its power distribution lines. A concrete pole cost 18,000 each and will last 20 years. The company is presently using wooden poles which cost 12,000 per pole and will last 10 years. Assume annual taxes amount to 1 percent of first cost and zero salvage value in both cases. Money is worth 12 percent. 1.1. What is the amount of annual depreciation each pole? 1.2. Excluding interest on capital, what is the annual cost of the wooden pole?
