Given step by step explanation? General Accounting question Harper Industries is evaluating an investment with the followingcharacteristics:•Useful life: 10 years•Yearly net cash inflow: $45,000•Salvage value: $0.Internal rate of return: 12%Required rate of return: 8%Calculate the initial cost of the equipment.

Step 1: Define Initial Cost CalculationThe initial cost of an investment is determined using the…

Answered: Harper Industries is evaluating an…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 18EB: Garnette Corp is considering the purchase of a new machine that will cost $342,000 and provide the...

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The initial cost the equipment is ??
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San Lucas Corporation is considering investment in robotic machinery based upon the following estimates: Cost of robotic machinery $4,000,000 Residual value 300,000 Useful life 10 years a. Determine the net present value of the equipment, assuming a desired rate of return of 10% and annual net cash flows of $700,000. Use the present value tables appearing in Exhibit 2 and 5 of this chapter. Net present value $ b. Determine the net present value of the equipment, assuming a desired rate of return of 10% and annual net cash flows of $500,000, $700,000, and $900,000. Use the present value tables (Exhibit 2 and 5) provided in the chapter in determining your answer. If required, use the minus sign to indicate a negative net present value. Annual Net Cash Flow $500,000 $700,000 $900,000 Net present value $ $ $ c. Determine the minimum annual net cash flow necessary to generate a positive net present value, assuming a desired rate of return of 10%. Round to the nearest…
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Compute the equivalent uniform annual cost of the machine having the following data: Initial Cost = P100,000 Salvage Value = P20,000 Useful life = 20 years Rate of Interest = 12% Annual Operating Cost = P15,000

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Harper Industries is evaluating an investment with the following characteristics: • Useful life: 10 years • Yearly net cash inflow: $45,000 • Salvage value: $0 . Internal rate of return: 12% Required rate of return: 8% Calculate the initial cost of the equipment.