An investment of 80,200 returned 20,000 per year over a five year useful life and then have a salvage value equal to its annual revenue. Annual operations and maintenance cost is 16,500 and the company is expecting a 20% MARR. Determine the payout period and the rate of return on the investment.

Q: A certain investment costs $3400. The investment produces income of $1500 at the end of the first…

A: Nothing is mentioned in this question with respect to the discount rates or finding the present…

Q: An independent project has a net investment of $250,000, and generates net cash flows of $90,000 for…

A: Calculation of Net present value of the project: Answer: Net present value is $19,155.09

Q: The investment cost of a new product line is $300000. The annual operating cost is estimated to be…

A: given, initial cost = $300,000 annual operating cost = $150,000 n = 6 r = 14% salvage value = 14%…

Q: A project has a $53000 first cost that returns $5000 per year over its 15 year life. It has a $12000…

A: The payback period, a monetary metric, estimates how long it will take an investment to recover its…

Q: Peng Company is considering buying a machine that will yield income of $2,400 and net cash flow of…

A:

Q: Jensen Manufacturing is considering buying an automated machine that costs $500,000. Annual cash…

A: Accounting Rate of Return (ARR) is the average net income an asset is expected to generate divided…

Q: A potential investment has a cost of $395,000 and a useful life of 6 years. Annual cash sales from…

A: Decisions made regarding the capital budget have the potential to affect the financial performance…

Q: What is the interest earned on a project that requires an initial investment of $ 10,000 and…

A: Initial investment (PV) = $ 10,000 Future value (FV) = $ 20,114 Period (n) = 5 Years

Q: What is the minimum annual revenue to make this project profitable

A: Given Cost = 379,968 annual operating cost = 167,365 project life = 10 years salvage cost = 12,887…

Q: An investment of $875,000 in equipment will produce annual profits of $175,000 for eight years. The…

A: Investment amount = $ 875000 Annual profit = $ 175000 Residual value = $ 40000 Period = 8 Years

Q: Determine the average rate of return for a project that is estimated to yield total income of…

A: Total income over 4 years $250,000 Average annual net income ($250,000 / 4 years) $62,500

Q: An equipment with an estimated lifespan of 10 years is to be bought for Php 1,500,000. It will…

A: Initial Investment Cost (Year 0) I = Php 1,500,000Annual Revenue A= Php 400,000Annual Operating and…

Q: A. Payback. The company requires all projects to payback within 3 years. Calculate the payback…

A: Payback period = Year of last negative cash flow + (Absolute value of last negative cash flow/Next…

Q: An investment will cost $10,000 today for equipment plus expenses for labor and materials at a…

A: Discounted payback refers to the method of capital budgeting in which time period taken to convert…

Q: mine would require an investment of $5 million at the beginning of the first year and a further…

A: In finance capital budgeting decision important part of decision making that relates to the…

Q: The required investment cost of a new, large shopping center is $47 million. The salvage value of…

A: NPV means Net Present value.It is computed by deducting initial investment from present value of…

Q: An investment of $120,000 with a service life of 12 years is being considered. The expected revenues…

A: Net Present Value (NPV) is a financial measure used to analyze the profitability of an investment by…

Q: You are responsible to manage an IS project with a 4-year horizon. The annal cost of the project is…

A: Return on investment is the income earned on an investment throughout the defined investment…

Q: Peng Company is considering buying a machine that will yield income of $2,400 and net cash flow of…

A: RATIO ANALYSISRatio analysis is the process of determining and interpreting numerical relationships…

Q: What must the annual earnings be from a new piece of equipment that costs $10 million and has a…

A: NPV is also known as Net Present Value.. It is a capital budgeting technique which helps in decision…

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.