HydroKlean LLC, an environmental soil cleaning company, borrowed $3.5 million to finance startup costs for a site reclamation project. How much must the company receive each year in revenue to earn a rate of return of 25% per year for the 5-year project period?

Q: A company is considering purchasing a new piece of machinery at a cost $50,000. It is expected to…

A: Economic Value Added Economic value added is referred to as the economic profit which is calculated…

Q: olorado Cleaning has a 5-year maximum acceptable payback period. The firm is considering the…

A: PAYBACK PERIOD : It is the period during which the firm recovers its initial cashflows. formula:…

Q: A factory wants to invest in a washing machine which will reduce their monthly expenses. The asset…

A: Present value of annuity formula is used to calculate the amount of monthly savings required for the…

Q: planning to install wind turbines to provide enhanced evaporation of reverse osmosis concentrate…

A: Answer has been given in the next sheet

Q: You are given the following information regarding a Solar Energy System project: • The Solar system…

A: NPV analysis helps the company to check the viability of the project as it will add worth to the…

Q: company is thinking about marketing a new product. Up-front costs to market and develop the product…

A: The "upfront cost" means the out-of-pocket costs that are spent at the outset of a project, service,…

Q: A widget machine will cost $480,000.  The anticipated increase in revenue will be $140,000/year for…

A: Cost of the machine = $480000 Revenue increase for 5 years = $140000 Annual expenses for 5 years =…

Q: A company is thinking about marketing a new product. Up-front costs to market and develop the…

A: If a cost is said to be occurred as perpetuity it means that cost will be incurred for an infinite…

Q: Colorado Cleaning has a 5-year maximum acceptable payback period. The firm is considering the…

A: Pay-Back(PB) Period shows time period required to fully recover initial outlay of proposal from…

Q: company invests $2 million to clear land and plant pine trees.  The trees will mature in 10 years…

A: Annual rate of return is the profit earned on investment over the period of time as percentage of…

Q: Hunter, Inc., is considering a project that would have a five-year life and would require a $550,000…

A: The present value of all the net cash inflows and outflows of the business is termed Net Present…

Q: Martin's Auto Repair Service is considering the purchase of a new piece of equipment that costs…

A: Step 1: Given Value for Calculation Purchase Price of Equipment = $5706Annual Additional Revenue =…

Q: entrepreneur wanted to open a small laundry shop. An investment of P280,654 is needed for a laundry…

A: Rate of return method: In this method the annual rate of return is calculated and the break rate of…

Q: A company is considering the purchase of a new machine for $61000. Management predicts that the…

A: Payback period of the machine means in how much years or period the initial investment amount can be…

Q: A company is thinking about buying new tools. The tools has an estimated fixing life of five years.…

A: Present value of Cash Inflow :— Present Value of Cash Inflow provides the Present Value of Cash…

Q: Cisco Systems is purchasing a new bar code–scanning device for its servicecenter in San Francisco.…

A: Depreciation is an accounting technique for distributing a tangible or fixed asset's cost over its…

Q: compute the rate of return.

A: Accounting rate of return (ARR) refers to a financial ratio which is used by the company to compute…

Q: Calculate the NPV of this project if the interest rate is 6.91%

A: Net present value is determined by deducting the initial investment from the current value of cash…

Q: Dairy queen corporation has been awarded a contract to supply a key replacement part for its ice…

A: Required Return = 16% N = 8 years Initial Investment = Equipment Cost + Working Capital Needed…

Q: A widget machine will cost $480,000.  The anticipated increase in revenue will be $140,000/year for…

A: Internal rate of return is the rate expressed in percentage terms which equalize the net present…

Q: Westland Manufacturing spends $20,000 to update the lighting in its factory to more energy-efficient…

A: PAYBACK PERIOD Payback period is the period in which money invested in capital asset is recovered…

Q: Maui Fabricators Inc. is considering an investment in equipment that will replace direct labor. The…

A: Average rate of return is the return that is earned on an investment in a year. The return earned…

Q: XYZ Company is building an addition (building and machinery) to its manufacturing plant to increase…

A: Cost of the building additional manufacturing plant is $1,230,000 Loan to the company is equal to…

Q: Celtic Inc. is considering a 16-year project that will generate before tax cash flow of $18, 000 per…

A: Step-1

Q: A company is considering the purchase of a new machine for $67,000. Management predicts that the…

A: Financial Management: Financial management comprises of two words i.e. Finance and management.…

Q: A company plans to spend $ 156244 to install a new machine. Annual maintenance cost is $ 13178.…

A: Initial Cost = 156244 Annual Maintenance Cost = 13178 Annual Income = 34918 Increase in Annual…

Q: The manufacture of equipment costs $73,000 per year. An engineer finds that by spending $16,000 now…

A: Costs per year= 73000 Initial Cost = 16000 Updated costs per year: Year Cash Outflow 1 -58000…

Q: Firm Z has invested $4 million in marketing campaign to assess the demand for the product Minish.…

A: Cash Flow - The net inflow or outflow of money during a given period is known as cash flow. It is…

Q: Business Monkey is evaluating a 3-year project that would involve buying a new piece of equipment…

A: NPV (Net Present Value) assesses investment profitability by calculating the present value of future…

Q: A company is considering the purchase of a new machine for $87,000. Management predicts that the…

A: Financial Management: Financial management comprises of two words i.e. Finance and management.…

Q: A startup is considering buying a $295,000 piece of equipment. If it purchases the equipment, it…

A: If loan taken for $295,000 at 3% for 5 year; Yearly EMI = $63,609.12 Now, we calculate the After tax…

Q: Butler Corporation is considering the purchase of new equipment costing $69,000. The projected…

A: The NPV is the tool used for the assessment of an investment's net benefits. This tool will help in…

Q: The required investment cost of a new, large shopping center is $47 million. The salvage value of…

A: NPV means Net Present value.It is computed by deducting initial investment from present value of…

Q: A manufacturing company plans to buy a new piece of equipment for $70,000 which is expected to last…

A: The present value is the value of the sum received at time 0. It is the current value of the sum…

Q: Assume interest is paid in full at the end of each year. a. How much would Sauer Food Company save…

A: There is interest to be paid on the loan that depends on the period of loan and interest rate on the…

Q: Pierre’s Hair Salon is considering opening a new location in French Lick, California. The cost of…

A: Solution: Annual net income from salon = $60,490 - $40,800 = $19,690 Average investment = (Cost +…

Q: You have been asked to make a recommendation about whether to spend $115,000 on a new Laser cutting…

A: Here, we have been given the real discount rate, which is 8%. Both salvage value and overhaul costs…

Q: A mining firm makes annual deposits of $400,000 into a reclamation fund for 25 years. If the firm…

A: Interest: It can be defined as a payment or a charge that is made by the borrower to a lender.

Q: Pierre's Hair Salon is considering opening a new location in French Lick, California. The cost of…

A: The return that an investment offers over time, expressed as a time-weighted yearly percentage, is…

Q: A construction company can purchase a used backhoe for $90,000 and spend $450 per day in operating…

A: The objective of the question is to determine the number of days per year the company must use the…

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.