c. The internal rate of return is between what two whole discount rates (e.g..between 10% and 11%, between 11% and 12%, between 12% and 13%, between 13%and 14%, etc.)?The internal rate of return is between% and%d. Reset the discount rate to 13%. Suppose the salvage value is uncertain. Howlarge would the salvage value have to be to result in a positive net present value?Minimum salvage value required to generate a positive present value 1234AChapter 12: Applying ExcelDataExample ECost of equipment neededWorking capital neededOverhaul of equipment in four yearsSalvage value of the equipment in five yearsAnnual revenues and costs:5678910111213 Discount rateSales revenuesCost of goods soldOut-of-pocket operating costsSA LA SA$$$59$$$$B250,00025,00025,00025,000370,000230,00070,000C13 %

The project can be evaluated based on discounted cash flow methods. The IRR method is used to…

Answered: c. The internal rate of return is…

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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MACHINE A MACHINE B INITIAL COST R100 000 R110 000 EXPECTED ECONOMIC LIFE 5 YEARS 5 YEARS EXPECTED DISPOSAL/RESIDUAL VALUE R10 000 EXPECTED NET CASH INFLOWS R R END OF: YEAR 1 34 000 33 000 YEAR 2 27 000 33 000 YEAR 3 32 000 33 000 YEAR 4 30 000 33 000 YEAR 5 26 000 33 000 DEPRECIATION PER YEAR 18 000 22 000 COMPANY ESTIMATES COST CAPITAL = 14% 2) Calculate the accounting rate of return (on average investment) for Machine A. (answer rounded offto 2 decimal places).
MACHINE A MACHINE B INITIAL COST R100 000 R110 000 EXPECTED ECONOMIC LIFE 5 YEARS 5 YEARS EXPECTED DISPOSAL/RESIDUAL VALUE R10 000 EXPECTED NET CASH INFLOWS R R END OF: YEAR 1 34 000 33 000 YEAR 2 27 000 33 000 YEAR 3 32 000 33 000 YEAR 4 30 000 33 000 YEAR 5 26 000 33 000 DEPRECIATION PER YEAR 18 000 22 000 COMPANY ESTIMATES COST CAPITAL = 14% 3)Calculate the net present value of each machine
ems i Your firm is considering purchasing a machine with the following annual, end-of-year, book investment accounts. Gross investment Less: Accumulated depreciation Net investment Year 0 Year 1 Year 2 Year 3 Year 4 $ 65,000 $ 65,000 $65.000 $ 65,000 $65,000 0 16,250 32,500 48,750 65,000 AAR $ 65,000 $48.750 $ 32.500 $ 16,250 $ 0 The machine generates, on average. $4.900 per year in additional net income. What is the average accounting return for this machine? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g.. 32.16.) Saved
Time Value of MoneySystem Analysis and Design
Kindly answer the 6 and 7 thank you
A B C D E F G H 1 Create a income statement and show net cashflow each year for the 4 years so you can use it for what-if analysis. 2 3 Base case Inputs: 4 5 6 4-year life of the project $26/unit Sales price of product 7 $13/unit Cost to produce the product 8 $1450/year operating costs 9 1250 units First-year production 16% Increase in production each year 1012345167819202123 24 25 26 14 Answer the following question for "what if analysis" 16 What is the IRR for the Base case? 17 $32,000 Initial investment depreciated with MACRS 3 year recovery 28% tax rate What is the IRR if the volume produced does not increase by 16%/year, but only increased 10%/yr.? What is the IRR if the sales price is only $24/unit? What is the IRR if the tax rate increases to 49%? 20 What is the IRR if the initial investment is $39,000? 18 19 22 Which analysis should your company be most concerned about? I J k
MACHINE A MACHINE B INITIAL COST R100 000 R110 000 EXPECTED ECONOMIC LIFE 5 YEARS 5 YEARS EXPECTED DISPOSAL/RESIDUAL VALUE R10 000 EXPECTED NET CASH INFLOWS R R END OF: YEAR 1 34 000 33 000 YEAR 2 27 000 33 000 YEAR 3 32 000 33 000 YEAR 4 30 000 33 000 YEAR 5 26 000 33 000 DEPRECIATION PER YEAR 18 000 22 000 COMPANY ESTIMATES COST CAPITAL = 14% 4)Calculate the internal rate of return for Machine B.
No excel
Please answer both question i will upvote
Air Scrubbers Furnace Fuel Change: Initial Investment $ 1.350,000 $ 385.000 Annual Net Cash Flows $ 225.000 315.000 Annual Net Income Project Life Average Book Value Cost of Capital $ 135,000 S 150,000 15 years 15 years $ 675,000 692.500 6% 8%
7. Find the present worth. Machine A Machine B P 11,000 P 18,000 First Cost Annual P 3,500 P 3,100 Operating Cost Salvage Value P 1,000 P 2,000 Life в уеars 9 years Rate (i) 15% 15%
MACHINE A MACHINE B INITIAL COST R100 000 R110 000 EXPECTED ECONOMIC LIFE 5 YEARS 5 YEARS EXPECTED DISPOSAL/RESIDUAL VALUE R10 000 EXPECTED NET CASH INFLOWS R R END OF: YEAR 1 34 000 33 000 YEAR 2 27 000 33 000 YEAR 3 32 000 33 000 YEAR 4 30 000 33 000 YEAR 5 26 000 33 000 DEPRECIATION PER YEAR 18 000 22 000 COMPANY ESTIMATES COST CAPITAL = 14% 1) Calculate the payback period for Machine A and B (answers must be expressed in years, monthsand days).

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