Print ItemJulio Company is considering the purchase of a new bubble packaging machine. If the machine will provide $24,000 annual savings for 12 years and can be sold for$52,000 at the end of the period, what is the present value of the machine investment at a 8% interest rate with savings realized at year end? Round your presentvalue factor to three decimal places and final answer to the nearest dollar.(Click here to see present value and future value tables)XFeedbackV Check My WorkWhen determining the present value of the machine, consider that there are two different cash flows (which require factors from two different tables). Rate (i)1%2%3%5%8%10%12%15%20%10.9900.9800.9710.9520.9260.9090.8930.8700.83320.9800.9610.9430.9070.8570.8260.7970.7560.69430.9710.9420.9150.8640.7940.7510.7120.6580.57940.9610.9240.8880.8230.7350.6830.6360.5720.4820.9520.9060.8630.7840.6810.6210.5670.4970.4020.9420.8880.8370.7460.6300.5640.5070.4320.33570.9330.8710.8130.7110.5830.5130.4520.3760.27980.9240.8530.7890.6770.5400.4670.4040.3270.2339.0.9140.8370.7660.6450.5000.4240.3610.2840.194100.9050.8200.7440.6140.4630.3860.3220.2470.162110.8960.8040.7220.5850.4290.3500.2870.2150.135120.8880.7880.7010.5570.3970.3190.2570.1870.112130.8790.7730.6810.5300.3680.2900.2290.1630.093140.8610.7580.6610.5050.3400.2630.2050.1410.078150.8610.7430.6420.4810.3150.2390.1830.1230.065160.8530.7280.6230.4580.2920.2180.1630.1070.054170.8440.7140.6050.4360.2700.1980.1460.0930.045180.8360.7000.5870.4160.2500.1800.1300.0810.038190.8280.6860.5700.3960.2320.1640.1160.0700.031200.8200.6730.5540.3770.2150.1490.1040.0610.026Present Value of $1 Table.(u) poļuad

Present value of the machine investment is the sum of present value of annuity cash flows and…

Julio Company is considering the purchase of a new bubble packaging machine. If the machine will provide $24,000 annual savings for 12 years and can be sold for $52,000 at the end of the period, what is the present value of the machine investment at a 8% interest rate with savings realized at year end? Round your present value factor to three decimal places and final answer to the nearest dollar. (Click here to see present value and future value tables)

Julio Company is considering the purchase of a new bubble packaging machine. If the machine will provide $24,000 annual savings for 12 years and can be sold for $52,000 at the end of the period, what is the present value of the machine investment at a 8% interest rate with savings realized at year end? Round your present value factor to three decimal places and final answer to the nearest dollar. (Click here to see present value and future value tables)

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

Your answer is incorrect. Sheridan Company is considering investing in an annuity contract that will return $33,500 annually at the end of each year for 15 years. Click here to view the factor table. What amount should Sheridan Company pay for this investment if it earns an 10% return? (For calculation purposes, use 5 decimal places as displayed in the factor table provided. Round answer to 2 decimal places, e.g. 25.25.) Sheridan Company should pay $ eTextbook and Media Save for Later SUPP Attempts: 2 of 3 used Submit Answer
Ivy's Ice Cream is looking at an opportunity that would require an investment of $900,000 today. The investment will provide cash flows of $250,000 in the first year, $400,000 in the second year, and $600,000 in the third year. If the interest rate is 8%, what is the NPV of this investment opportunity? Should Ivy's Ice Cream move forward with this investment based on the NPV? (Round your answer to the nearest whole dollar.)
Your group receives a phone proposal to invest in a new business. Thecaller informs you that it will take a $70,000 down payment and the investmentwill return $10,000 a year for the next 10 years. He tells you that theinvestment will return 14 percent. If current interest rates are 8 percent,what is the present value of this investment? How did the caller get14 percent?
Peaceful Cruises wants to build a new cruise ship that has an initial investment of $400 million. It is estimated to provide an annual cash flow over the next 10 years of $57 million per year. The discount rate is 5%. What is the discounted payback period? Enter your answer rounded to two decimal places
You are trying to value the following investment opportunity: The investment will cost you $22151 today. In exchange for your investment you will receive monthly cash payments of $5195 for 9 months. The first payment will occur at the end of the first month. The applicable effective annual interest rate for this investment opportunity is 7%. Calculate the NPV of this investment opportunity. Round to two decimals (do not include the $-sign in your answer).
You are evaluating a growing perpetuity investment from a large financial services firm. The investment promises an initial payment of $15,000 at the end of this year and subsequent payments that will grow at a rate of 2.0 percent annually. If you use a 9 percent discount rate for investments like this, what is the present value of this growing perpetuity? (Round answer to 2 decimal places, e.g. 15.25.) Present value $
An investment offers $3,850 per year for 15 years, with the first payment occurring one year from now. a. If the required return is 6 percent, what is the value of the investment? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. What would the value be if the payments occurred for 40 years? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) c. What would the value be if the payments occurred for 75 years? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) d. What would the value be if the payments occurred forever? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) a. Present value of 15 annual payments b. Present value of 40 annual payments c. Present value of 75 annual payments d. Present value of annual payments forever
betty's bakery is planning for future expansion. the company estimates that i will need 59,500 to purchase a new commercial oven 5 years from now. assuming a 2% annual interest rate compounded annually, use the pv function in excel or a financials calculator to determine how much betty's must invest today to have 59,500 5 years from now on. present value=??
PLEASE USE EXCEL, SHOW FORMULAS, AND INCLUDESPiderplot HiTek Manufacturing is purchasing a large tract of land for a new facility. Its loan is for $3 million, but this may vary by plus or minus 10%. The loan will be paid off in 15 years using annual payments, but this could be as low as 10 years or as high as 30 years. If the interest rate is 10% (between 8% and 12%), How much is each payment? Construct a spiderplot. Which change would be most significant?
You want to receive $5000 per month for 20 years in real dollars in an account when you retire in 35 years. The first monthly payment to be received 1 month after you retire. The nominal return on your investment is 9.94 percent and the inflation rate is 3.2 percent. What is the real amount you must deposit each year for 35 years to achieve your goal? Pls do using Excel
A news article forecasts that it will cost around $36,871 to purchase a Lexus NX300 in 2024. How much will you have to invest today at 6.96% per year to have the $36,871 available for the purchase of the car four years from today?
Gammaro Games is considering an equipment investment that will cost $960,000. Projected net cash inflows over the equipment's three-year life are as follows: Year 1: $488,000; Year 2: $396,000; and Year 3: $282,000. Gammaro wants to know the equipment's IRR. (Click the icon to view the present value annuity table.) (Click the icon to view the future value annuity table.) (Click the icon to view the present value factor table.) (Click the icon to view the future value factor table.) Requirement Use trial and error to find the IRR within a 2% range. (Hint: Use Gammaro's hurdle rate of 8% to begin the trial-and-error process.) Use a business calculator or spreadsheet to compute the exact IRR. Begin by calculating the NPV at three rates: 8%, 10%, and 12%. (Round your answers to the nearest whole dollar. Use parentheses or a minus sign for negative net present values.) The NPV at 8% is