None Database Systems is considering expansioninto a new product line. Assets to supportexpansion will cost $740,000. It is estimatedthat Database can generate $1,910,000 inannual sales, with a 4 percent profit margin.What would net income and return on assets(investment) be for the year?

Given, Assets to support expansion (Investment): $740,000Annual sales: $1,910,000Percentage of…

Answered: Database Systems is considering…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 5PB: Mason, Inc., is considering the purchase of a patent that has a cost of $85000 and an estimated...

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Mason, Inc., is considering the purchase of a patent that has a cost of $85000 and an estimated revenue producing lite of 4 years. Mason has a required rate of return that is 12% and a cost of capital of 11%. The patent is expected to generate the following amounts of annual income and cash flows: A. What is the NPV of the investment? B. What happens if the required rate of return increases?
Falkland, Inc., is considering the purchase of a patent that has a cost of $50,000 and an estimated revenue producing life of 4 years. Falkland has a cost of capital of 8%. The patent is expected to generate the following amounts of annual income and cash flows: A. What is the NPV of the investment? B. What happens if the required rate of return increases?
Caduceus Company is considering the purchase of a new piece of factory equipment that will cost $565,000 and will generate $135,000 per year for 5 years. Calculate the IRR for this piece of equipment. For further instructions on internal rate of return In Excel, see Appendix C.
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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? (Round your return on assets to 1 decimal place. Omit the "$" and "%" signs in your response.)
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Database Systems is considering expansion into a new product line. Assets to support expansion will cost $740,000. It is estimated that Database can generate $1,910,000 in annual sales, with a 4 percent profit margin. What would net income and return on assets (investment) be for the year?