Happiny Corporation is considering the purchase of new equipment costing P300,000. The projected annual after-tax net income from the equipment is P12,000, after deducting P100,000 for  depreciation. The revenue is to be received at the end of each year. The machine has a useful life of 3 years and no salvage value. Butler requires a 12% return on its investments. What is the net present value of the machine

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: Multiple Choice

A: $265,600 Explanation: Non-cash expenditures like depreciation and amortization are excluded from…

Q: Your company is considering the purchase of new equipment. The equipment costs R350 000, and an…

A: Net present value (NPV) is computed by deducting initial investment from present value of cash…

Q: Cortland Corp is considering the purchase of a new piece of equipment. The cost savings from the…

A: annual net income = annual increase in net cash flows  - Depreciation If no specific method is given…

Q: Concord is contemplating a capital project costing $32838. The project will provide annual cost…

A: Net present value is the difference between the present value of the initial cash outflow and the…

Q: maintenance costs of this equipment are estimated to be about $25,000 per year. Salvage value is…

A: EUAC is uniform annual equivalent cost that is equivalent to all costs of equipment.

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: The management of Kunkel Company is considering the purchase of a $23,000 machine that would reduce…

A: The question is related to Capital Budgeting. Net Present Value (NPV).  It is the difference between…

Q: X company is considering investing P1,800,000 in a new machine that could give the company an annual…

A: As per the given information: Investment in a new machine - P1,800,000 Annual net operating income -…

Q: Nelson Corporation is considering the purchase of a new piece of equipment. The cost savings from…

A: Cost of equipment$500,000Less: Salvage Value$130,000Depreciable Value ($500,000 -…

Q: Wade and Wanda Publishing Company is considering an upgrade to the printing facility that produces…

A: When someone invests in a business or an asset, the return is negative until the entire investment…

Q: $22,000.

A: The answer is $22000

Q: uipment that will increase revenue by P94,500 a year requires an investment of P430,000. It is…

A: Future value of any investment gives the compound interest and principal. Gives decision making in…

Q: How should the $4,500 spent last year be handled? The cost of research is an incremental cash flow…

A: $4500 spent on the feasibility study is a sunk cost. Sunk cost is a cost that has already occurred…

Q: Get the Correct option with calculation and explanation

A: The problem requires the determination of the after-tax cash flows of the sale of machinery. In…

Q: Periods 1 2 Present Value of $1 Present Value of an Annuity at 10% of $1 at 10% 0.9091 0.8264 0.7513…

A: When making investment decisions and capital budgeting, NPV is frequently used. In order to make…

Q: DON Corporation is contemplating the purchase of a machine that will produce net after tax cash…

A: The present value indicate the current value of money to be received or paid in the future. It helps…

Q: Bartlett Car Wash Company is considering the purchase of a new facility. It would allow Bartlett to…

A: Accounting rate of return is the net income divided by the investment  Payback period is the period…

Q: Pablo Company is considering buying a machine that will yield income of $2,200 and net cash flow of…

A: Net Present value is present value of cash flow minus initial investment.

Q: a company can buy a machine that is expected to have a three-year life and a 30,000 salvage value.…

A: Net Present Value: It is the present worth today of the project having the initial cost and annual…

Q: Grady Corp. is considering the purchase of a new piece of equipment. The equipment costs $50,700,…

A: Solution a: Present value of increase in annual cash flows = $6,110 * PVA of 1 at 13% for 6 periods…

Q: Armor Investment Company is considering the acquisition of a heavily depreciated building on 10…

A: Given:The building gets depreciated on 10 acres of land.The cash flow is $102,200.The rate of…

Q: B2B Company is considering the purchase of equipment that would allow the company to add a new…

A: Net Income$98,700Add: Depreciation$31,600Annual Cash Flow ($98,600 + $31,600)$130,300Annual Cash…

Q: Z is evaluating a project that would require the purchase of a pie levant depreciation of $136,000.…

A: Net income is amount available after the deduction of the cost of goods sold , depreciation and…

Q: Y Company is considering purchasing a machine for $15,000. The machine will generate a net after-tax…

A: The payback period is one of the capital budgeting technique which use to evaluate the project based…

Q: The management of Kunkel Company is considering the purchase of a $40,000 machine that would reduce…

A: The tool that is widely used for conducting capital budgeting process where a decision needs to be…

Q: Godo AAU Company is considering the purchase of equipment that would allow the company to add a new…

A: NET PRESENT VALUENet Present Value is one of the Important Capital Budgeting Techniques. Net Present…

Q: Palmer Corp. is considering the purchase of a new piece of equipment. The cost savings from the…

A: The payback period is a financial metric used to determine the length of time it takes for an…

Q: Mini Inc. is contemplating a capital project costing $47,019. The project will provide annual cost…

A: Net Present Value = (Annual cost savings x present value of annuity at 10%, 3 year) + (salvage value…

Q: B2B Company is considering the purchase of equipment that would allow the company to add a new…

A: Net present value is useful in capital budgeting. It is possible to predict whether or not a…

Q: Homer Corp. is considering the purchase of a new piece of equipment. The cost savings from the…

A: Income after tax = $ 169650 Initial cost = $ 585000 Life = 5 Years Salvage value = $ 25000 Annual…

Q: Palmer Corporation is considering the purchase of a new plece of equipment. The cost savings from…

A: The payback period is a capital budgeting metric that evaluates the number of years it takes for the…

Q: Please answer asap    Youssef Inc.is considering a capital investment of $320,000 in additional…

A: Payback period is the total time taken to recover the cost of investment.

Q: B2B Company is considering the purchase of equipment that would allow the company to add a new…

A: Net present value helps in Budgeting for capital analysis. It is possible to anticipate if a…

Q: Malone Corp. is considering the purchase of a new piece of equipment. The cost savings from the…

A: Net Present Value: Net present value (NPV) is the excess of present value of cash inflows over the…

Q: B2B Company is considering the purchase of equipment that would allow the company to add a new…

A: The Net Present value is calculated with the help of following formula Net Present Value = Present…

Q: Sheffield Company is evaluating the purchase of a rebuilt spot-welding machine to be used in the…

A: Step 1: Calculate the Present Value Annuity Factor (PVAF): This is done by dividing the initial cost…

Q: Bassinger Company plans to buy a new machine for $60,000 that will have an estimated useful life of…

A: The profitability index represents the relationship between the costs and benefits of a project. It…

Q: What is the NPV assuming a 12% rate of return. (ignore Tax) Bramble Inc. is considering modernizing…

A: The net present value (NPV) technique is a method of capital budgeting in which all the present…

Q: Belmont Corporation is considering the purchase of a new piece of equipment. The cost savings from…

A: One tool for capital budgeting that can be used quickly and simply to assess a project's…

Q: Bartlett Car Wash Co. is considering the purchase of a new facility. It would allow Bartlett to…

A: Accounting rate of return can be calculated as: = Average Net Profit/ Average Investment * 100 It…

Q: Kunkel Company is considering the purchase of a $29,000 machine that would reduce operating costs by…

A: Net Present Value-Net present value (NPV) is a tool used to calculate the current value of…

Q: A certain company is considering the use of a concrete electric pole in the expansion of its power…

A: Answer -    Part 1 - Calculation of annual depreciation on each pole - Wooden pole: ???????????? =…

Q: XYZ is evaluating a project that would require the purchase of a piece of equipment for $440,000…

A: The financial statement analysis refers to the measurement of the performance of the company based…

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.