QUESTION SHome Express Moving Company is considering purchasing new equipment that costs $728.000. ts management estmates thatthe equipment will generate cash inflows of $50,000 semiannually for its 2 year life.Present value of $1:6%7%8%9%0.9170.84210%0.9090.8260.9430.9350.9260.8570.7940.8730.8900.8400.7920.7472.0.7510.6830.62130.8160.7720.7080.7350.68140.7635.0.7130.650The company's annual required rate of return is 14%Using the factors in the table, calculate the present value of the cash flowsO $235,750O $152,600O $100,000O $200,000

Present Value: The present value (PV) of a future amount of money or stream of cash flows is the…

Home Express Moving Company is considering purchasing new equipment that costs $728.000. s management estmates that the equipment will generate cash inflows of S50,000 semiannually for its 2 year life. Present value of $1: 7% 0.935 0.873 6% 8% 9% 0.917 0.842 10% 0.909 0.943 0.926 0.890 0.857 0.794 0.826 2. 3. 0.751 0.683 0.840 0.816 0.772 0.763 0.713 0.735 0.681 0.708 0.650 0.792 0.621 0.747 The company's annual required rate of return is 14% Using the factors in the table, calculate the present value of the cash flows 12345n

Home Express Moving Company is considering purchasing new equipment that costs $728.000. s management estmates that the equipment will generate cash inflows of S50,000 semiannually for its 2 year life. Present value of $1: 7% 0.935 0.873 6% 8% 9% 0.917 0.842 10% 0.909 0.943 0.926 0.890 0.857 0.794 0.826 2. 3. 0.751 0.683 0.840 0.816 0.772 0.763 0.713 0.735 0.681 0.708 0.650 0.792 0.621 0.747 The company's annual required rate of return is 14% Using the factors in the table, calculate the present value of the cash flows 12345n

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Safe Driving School is considering purchasing new autos costing $235,000. The company's management has estimated that the autos will generate cash flows as follows: $ 80,000 $ 85,000 $ 95,000 $ 45,000 Year 1 Year 2 Year 3 Year 4 Considering the residual value is zero, calculate the payback period. Round to one decimal place
B2b Co. Is considering the purchase of equipment that would allow the company to add a new product to its line. The equipment costs $360,000 and hasa 12-year life and no salvage value. The expected annual income for each year from thos equipment follows. Compute the (a) annual net cash flow, (b) payback period, and (c) accounting rate of return for this equipment. $225,000 ,120,000, 30,000, 38,250, Income 36,750?
Management of Wildhorse, Inc., is considering switching to a new production technology. The cost of the required equipment will be $4,000,000. The discount rate is 11 percent. The cash flows that management expects the new technology to generate are as follows. Years 1-2 3-5 6-9 CF 0 $750,000 $1,450,000 a. Compute the payback and discounted payback periods for the project. (Round answers to 2 decimal places, e.g. 15.25.) The payback for the project is The NPV of the project is $ years, and the discounted payback period is b. What is the NPV for the project? Should the firm go ahead with the project? (Enter negative amounts using negative sign e.g. -45.25. Do not round discount factors. Round intermediate calculations to O decimal places, e.g. 1,525 and final answer to O decimal places, e.g. 5,125.) The IRR of the project is , and using the NPV rule the project should be c. What is the IRR, and what would be the decision based on the IRR? (Round answer to 3 decimal places, e.g.…
hi, can you solve this ?
A company is planning to purchase a new machine to expand its production. The machine is costing OMR 9254. The following cash inflows are expected to come for the machines. Calculate Net Present Value for Machine A using NPV given the rate of discounting to be 6.08% Years Machine A 1 3066 2 2200 3 2500 4 3600 Select one: a. -2361.71 b. 528.56 c. None of the options d. 19036.56 e. -1295.71
Bunnings Ltd is considering to invest in one of the two following projects to buy a newequipment. Each equipment will last 5 years and have no salvage value at the end. Thecompany’s required rate of return for all investment projects is 8%. The cash flows of theprojects are provided below.Equipment 1 Equipment 2Cost $186,000 $195,000Future Cash FlowsYear 1Year 2Year 3Year 4Year 586 00093 00083 00075 00055 00097 00084 00086 00075 00063 000Required:a) Identify which option of equipment should the company accept based onProfitability Index? b) Identify which option of equipment should the company accept based ondiscounted pay back method if the payback criterion is maximum 2 years? Do not use excel calculations
This question is based on the following information: Sphinx Company is planning to invest in a machinery costing P 500,000 with an estimated useful life of 5 years with no salvage value. The use of this machinery will generate cash savings of P 175,000 before taxes. Income taxes are 20% each year, What is the payback reciprocal? 32% P 33% 34% 35% What is the payback period? 3.125 years 3.152 years 3.512 years 3,521 years
MNO company is evaluating a proposal for purchase of equipment which will cost $180,000. The cash inflows from the use of equipment is given below: Year Cash flow $60,000 $40,000 $70,000 $125,000 $35,000 4. Payback period for the proposal is: a. 3 years b. 2 years c. 4 years d. 3.08 years DELL 123 45
Help me :)
A company is considering buying a new machine. Specific details: Initial Investment $400,000 Annual Cash Revenues $375,000 Annual Cash Expense $262,000 Expected Life 5 Years Salvage Value $0 Discount Rate 10% All cash flows are after tax. 1 Prepare a schedule that shows the applicable cash flows and other relevant items for this decision 2 Compute the payback period for the new machine 3 Compute the Accounting Rate of Return (ARR) for the new machine
monster beverage is considering purchasing a new canon machine this machine cost $3,500,000 up front. required return =10.7%. cash FLow year 0 -3,500,000 first year $1 million dollars second year 1,200,000 3.1,200,000 year three 1,300,000 4. 900,000 fifth year 1,000,000 . what is the value of year 3 cash flow discounted to the present?
Heidi Company is considering the acquisition of a machine that costs $536,000. The machine is expected to have a useful life of 6 years, a negligible residual value, an annual net cash inflow of $104,000, and annual operating income of $84,095. The estimated cash payback period for the machine is (round to one decimal point)? Oa. 5.2 years Ob. 6.4 years Oc. 6.0 years Od. 6.5 years