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Complete your calculations by filling in the highlighted cells. Note: the PV Annuity table is provided for you. Discuss if you think the cookie business should accept or reject the purchase of the new equipment and why. Additional information has come to your attention regarding the equipment purchase. One of the partner's brother owns the company that sells the equipment and insists the equipment is needed. Discuss any ethical concerns you see with this type of transaction.  Cookie Business           As the owner of the Cookie Business, you are considering the following investment:           Purchase of new equipment  $  250,000.00       Expected  annual increase in sales   $    48,017.50       Time frame 7 years     Acceptable rate needed 9%                 Calculate the Internal Rate of Return:         PV of annuity factor         Internal rate of return                   Accept or reject

Complete your calculations by filling in the highlighted cells. Note: the PV Annuity table is provided for you. Discuss if you think the cookie business should accept or reject the purchase of the new equipment and why. Additional information has come to your attention regarding the equipment purchase. One of the partner's brother owns the company that sells the equipment and insists the equipment is needed. Discuss any ethical concerns you see with this type of transaction.  Cookie Business           As the owner of the Cookie Business, you are considering the following investment:           Purchase of new equipment  $  250,000.00       Expected  annual increase in sales   $    48,017.50       Time frame 7 years     Acceptable rate needed 9%                 Calculate the Internal Rate of Return:         PV of annuity factor         Internal rate of return                   Accept or reject

FINANCIAL ACCOUNTING
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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Complete your calculations by filling in the highlighted cells. Note: the PV Annuity table is provided for you. Discuss if you think the cookie business should accept or reject the purchase of the new equipment and why.
Additional information has come to your attention regarding the equipment purchase. One of the partner's brother owns the company that sells the equipment and insists the equipment is needed. Discuss any ethical concerns you see with this type of transaction. 

Cookie Business
         
As the owner of the Cookie Business, you are considering the following investment:
         
Purchase of new equipment  $  250,000.00      
Expected  annual increase in sales   $    48,017.50      
Time frame 7 years    
Acceptable rate needed 9%      
         
Calculate the Internal Rate of Return:        
PV of annuity factor        
Internal rate of return        
         
Accept or reject        

 

 

n 1 2 1% 0.9901 1.9704 3 2.941 4 3.902 5 4.8534 6 5.7955 7 6.7282 8 7.6517 9 8.566 9.4713 10.3676 11.2551 10.5753 10 11 紅 5% 6% 8% 10% 12% 2% 0.9804 0.9524 0.9434 0.9259 0.9091 0.8929 1.9416 1.9135 1.8861 1.8594 1.8334 1.7833 1.7355 1.6906 2.8839 2.8286 2.7751 2.7233 2.673 2.5771 2.4869 2.4018 3.8077 3.7171 3.6299 3.546 3.4651 3.3121 3.1699 3.0374 4.7135 4.5797 4.4518 4.3295 4.2124 3.9927 3.7908 3.6048 5.6014 5.4172 5.2421 5.0757 4.9173 4.6229 4.3553 4.1114 6.472 6.2303 6.0021 5.7864 5.5824 5.2064 4.8684 4.5638 7.0197 6.7327 6.4632 6.2098 5.7466 5.3349 4.9676 7.7861 7.4353 7.1078 6.8017 6.2469 5.759 5.3283 8.9826 8.5302 8.1109 7.7217 7.3601 6.7101 6.1446 5.6502 9.7869 9.2526 8.7605 8.3064 7.8869 7.139 6.4951 5.9377 7.5361 6.8137 6.1944 7.9038 7.1034 6.4236 9.954 9.3851 8.8633 8.3838 11.3484 10.635 9.9857 9.3936 8.8527 12.1063 11.2961 10.5631 9.8986 9.295 11.938 11.1184 10.3797 9.7123 8.2442 7.3667 6.6282 8.5595 7.6061 6.8109 12 7.3255 8.1622 13 12.1337 14 13.0037 15 13.8651 12.8493 3% 4% 0.9709 0.9615
Transcribed Image Text:n 1 2 1% 0.9901 1.9704 3 2.941 4 3.902 5 4.8534 6 5.7955 7 6.7282 8 7.6517 9 8.566 9.4713 10.3676 11.2551 10.5753 10 11 紅 5% 6% 8% 10% 12% 2% 0.9804 0.9524 0.9434 0.9259 0.9091 0.8929 1.9416 1.9135 1.8861 1.8594 1.8334 1.7833 1.7355 1.6906 2.8839 2.8286 2.7751 2.7233 2.673 2.5771 2.4869 2.4018 3.8077 3.7171 3.6299 3.546 3.4651 3.3121 3.1699 3.0374 4.7135 4.5797 4.4518 4.3295 4.2124 3.9927 3.7908 3.6048 5.6014 5.4172 5.2421 5.0757 4.9173 4.6229 4.3553 4.1114 6.472 6.2303 6.0021 5.7864 5.5824 5.2064 4.8684 4.5638 7.0197 6.7327 6.4632 6.2098 5.7466 5.3349 4.9676 7.7861 7.4353 7.1078 6.8017 6.2469 5.759 5.3283 8.9826 8.5302 8.1109 7.7217 7.3601 6.7101 6.1446 5.6502 9.7869 9.2526 8.7605 8.3064 7.8869 7.139 6.4951 5.9377 7.5361 6.8137 6.1944 7.9038 7.1034 6.4236 9.954 9.3851 8.8633 8.3838 11.3484 10.635 9.9857 9.3936 8.8527 12.1063 11.2961 10.5631 9.8986 9.295 11.938 11.1184 10.3797 9.7123 8.2442 7.3667 6.6282 8.5595 7.6061 6.8109 12 7.3255 8.1622 13 12.1337 14 13.0037 15 13.8651 12.8493 3% 4% 0.9709 0.9615
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