Do fast of this question answer accounting question Sunrise Technology Corporation purchased a plot of land three years ago for$450,000. The current market value of the land is $595,000. When the land wasinitially purchased, the company spent $35,000 on land clearing and $6,500 onutility infrastructure. The company now plans to construct a new researchfacility with an estimated construction cost of $1,250,000.Calculate the initial cash flow for this project.

Step 1: Define Initial Cash FlowThe initial cash flow of a project represents the total investment…

Answered: Sunrise Technology Corporation…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter10: Capital Budgeting: Decision Criteria And Real Option

Section: Chapter Questions

Problem 12P

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Garnette Corp is considering the purchase of a new machine that will cost $342,000 and provide the following cash flows over the next five years: $99,000, $88,000, $92,000. $87,000, and $72,000. Calculate the IRR for this piece of equipment. For further instructions on internal rate of return in Excel. see Appendix C.
Gallant Sports s considering the purchase of a new rock-climbing facility. The company estimates that the construction will require an initial outlay of $350,000. Other cash flows are estimated as follows: Assuming the company limits its analysis to four years due to economic uncertainties, determine the net present value of the rock-climbing facility. Should the company develop the facility if the required rate of return is 6%?
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General Accounting
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SellFridges is estimating the terminal cash flow associated with an investment project. The proposed machine costs $100,000, has installation costs of $20,000 and will be depreciated over a five-year life. In 5 years, at the end of the project, the machine will be sold at an estimated salvage value of $20,000. Net working capital of $6,000 is also expected to be recovered in the final year of the project. The corporate tax rate is 30%. The terminal cash flow is: （The correct answer is 20,000.When calculating the book value,it has 120,000 - (5 x 24,000)=0. Depreciation is (Purchase price-salvage value)/useful life.I think the depreciation should be (120,000-20,000)/5=20,000.Why the accumulated depreciation is 5*24,000,not 5*20,000?
A corporation is considering purchasing a new plant asset. The asset will cost $30,000. The corporation requires a 10% return on similar investments. The corporation plans to use the asse for 4 years and then sell it for the salvage value. The estimated salvage value of the asset in 4 years is $5,000. The corporation estimates that if purchased the new asset will provide addition net cash flows of $9,000 each year for 4 years (assume the cash flows occur at the end of the year): Calculate the net present value (you must include the calculation in order to receive credit) Should the business purchase the asset?
s
Bennett Company is considering the purchase of a new machine. The new machine has a 10-year life and a $8,720 salvage value. The new machine is expected to generate net cash inflows of $64,000 each year during its life. The old machine currently in use can be sold for $17,520 if the new machine is purchased. The accounting rate of return on the new machine was determined to be 15%. Calculate the cost of the new machine.
Clapton Corporation is considering an investment in new equipment costing $750,000. The equipment will be depreciated on a straight-line basis over an eight-year life and is expected to have a salvage value of $80,000. The equipment is expected to generate net cash flows of $120,000 for each of the first four years and $80,000 for each of the last four years. What is the accounting rate of return associated with the equipment investment?
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