ime Value of Money and CVP Analysis Assignment i Quary Company is considering an investment in machinery with the following information. The company's required rate of return 14%. (PV of $1, FV of $1, PVA of $1, and FVA of $1) Note: Use appropriate factor(s) from the tables provided. Initial investment Useful life Salvage value Expected sales per year $ 258,000 Required A Required B 9 years $ 25,800 12,000 units Years 1-9 Year 9 salvage Totals Complete this question by entering your answers in the tabs below. a. Compute the investment's net present value. b. Using the answer from part a, is the investment's internal rate of return higher or lower than 14%? Hint: It is not necessary to compute the IRR to answer this question. Materials, labor, and overhead (except depreciation) Depreciation Machinery Compute the investment's net present value. Note: Negative net present values should be indicated with a minus sign. Round your present value factor to 4 decimals. Round your answers to the nearest whole dollar. Net Cash Flows Selling, general, and administrative expenses Selling price per unit X + Present Value Required A Present Value of Net Cash Flows $ $ Saved 0 70,000 Required B > $ 49,000 25,800 9,000 $12
ime Value of Money and CVP Analysis Assignment i Quary Company is considering an investment in machinery with the following information. The company's required rate of return 14%. (PV of $1, FV of $1, PVA of $1, and FVA of $1) Note: Use appropriate factor(s) from the tables provided. Initial investment Useful life Salvage value Expected sales per year $ 258,000 Required A Required B 9 years $ 25,800 12,000 units Years 1-9 Year 9 salvage Totals Complete this question by entering your answers in the tabs below. a. Compute the investment's net present value. b. Using the answer from part a, is the investment's internal rate of return higher or lower than 14%? Hint: It is not necessary to compute the IRR to answer this question. Materials, labor, and overhead (except depreciation) Depreciation Machinery Compute the investment's net present value. Note: Negative net present values should be indicated with a minus sign. Round your present value factor to 4 decimals. Round your answers to the nearest whole dollar. Net Cash Flows Selling, general, and administrative expenses Selling price per unit X + Present Value Required A Present Value of Net Cash Flows $ $ Saved 0 70,000 Required B > $ 49,000 25,800 9,000 $12
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Transcribed Image Text:ime Value of Money and CVP Analysis Assignment i
Quary Company is considering an investment in machinery with the following information. The company's required rate of return
14%. (PV of $1, FV of $1, PVA of $1, and FVA of $1)
Note: Use appropriate factor(s) from the tables provided.
Initial investment
Useful life
Salvage value
Expected sales per year
$ 258,000
Required A Required B
9 years
$ 25,800
12,000 units
Years 1-9
Year 9 salvage
Totals
Complete this question by entering your answers in the tabs below.
a. Compute the investment's net present value.
b. Using the answer from part a, is the investment's internal rate of return higher or lower than 14%? Hint: It is not necessary to
compute the IRR to answer this question.
Materials, labor, and overhead (except depreciation)
Depreciation Machinery
Compute the investment's net present value.
Note: Negative net present values should be indicated with a minus sign. Round your present value factor to 4 decimals.
Round your answers to the nearest whole dollar.
Net Cash Flows
Selling, general, and administrative expenses
Selling price per unit
X
+
Present Value
Required A
Present Value of Net
Cash Flows
$
$
Saved
0
70,000
Required B >
$ 49,000
25,800
9,000
$12
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