What is the discounted payback period of a project with an initial outlay of $50,000 and cash inflows of $25,000 over the first four years of the project and $15,000 over the following three years of the project, given a cost of capital of 12%?

What is the discounted payback period of a project with an initial outlay of $50,000 and cash inflows of $25,000 over the first four years of the project and $15,000 over the following three years of the project, given a cost of capital of 12%?

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter12: Capital Budgeting: Decision Criteria

Section: Chapter Questions

Problem 1P: A project has an initial cost of 40,000, expected net cash inflows of 9,000 per year for 7 years,...

See similar textbooks

Related questions

Q: What is the amount of the net income ?

A: Provided Data:Return on Equity (ROE) = 18%Total Asset Turnover = 3.1Profit Margin = 4.2%Total Equity…

Q: I need help solving this financial accounting question with the proper methodology.

A: Step 1: Definition of Debt-to-Equity RatioThe debt-to-equity ratio is a financial leverage ratio…

Q: General Accounting Question

A: Step 1: Definition of Units CompletedIn a process costing system, the number of units completed…

Q: The asset of the business must have

A: Explanation of Assets:Assets are the resources owned by a business that have economic value and are…

Q: Accurate Answer

A: Concept of Simplified MethodThe Simplified Method is an IRS-approved formula used to determine the…

Q: I am searching for the correct answer to this general accounting problem with proper accounting…

A: Explanation of Profit Margin:Profit Margin is a financial ratio that shows the percentage of revenue…

Q: Can you help me solve this general accounting problem using the correct accounting process?

A: SolutionSunset Apparel manufactures premium jackets and began operations this year. The relevant…

Q: Solve this question and accounting question

A: Step 1: Definition of Net SalesNet Sales refer to the total revenue from sales after deducting…

Q: Solve this

A: We know that, Current Ratio=Current LiabilitiesCurrent Assets So, Current LiabilitiesCurrent…

Q: I need assistance with this financial accounting question using appropriate principles.

A: Step 1: Definition of Profit Margin and Debt RatioProfit Margin is the percentage of revenue that…

Q: Help

A: To calculate the return on equity (ROE) for Firm P and Firm Q use this formula: ROE=ROA× Equity…

Q: During 2022, the assets of Towering Peak increased by $62,000, and the liabilities increased by…

A: Explanation of Assets:Assets represent everything a business owns that has monetary value and can…

Q: None

A: Given:Variable cost per cup = $2.50 (It seems "82.50" might be a typo; likely meant $2.50)Units sold…

Q: Hello what is the answer of both of this question?

A: Question 1.1.13:What governs the allocation of joint product costs at the split-off point?Correct…

Q: why you giving me unhelpful ?? check your account i also gave unhelpful because of you..

A: Formula (CAPM):Cost of Equity = Risk-free rate + Beta × (Market return - Risk-free rate)…

Q: Clemens Manufacturing applies manufacturing overhead based on machine hours. The overhead includes…

A: Provided Data:Variable overhead rate = $6.85 per machine hourFixed overhead = $195,000 per…

Q: General Accounting

A: Step 1: Definition of Net Profit Under Variable CostingUnder variable costing, only variable…

Q: Please provide the correct answer to this financial accounting problem using accurate calculations.

A: Provided Data:Sales = $738,000Sales returns = $24,000Overhead expenses = $172,000Step 1: Key…

Q: Step by step solution......???? ?

A: To determine the profit impact of accepting the offer, we calculate the additional revenue, variable…

Q: A company purchased equipment for $50,000. It expects the equipment to have a useful life of 5 years…

A: Use the formula:Annual Depreciation Expense = (Cost of Equipment - Salvage Value) ÷ Useful…

Q: How do you calculate the gross profit of a company?

A: Explanation of Sales:Sales represent the total revenue generated by a company from selling its goods…

Q: Financial Accounting Question please answer

A: Step 1: Define Interest ExpenseInterest Expense is the cost incurred by a borrower for using…

Q: Calculate the average operating assets

A: Explanation of Net Operating Income:Net Operating Income (NOI) is the profit a company generates…

Q: I want to this question answer for General accounting question not need ai solution

A: Step 1: Definition of Net IncomeNet income is the total profit of a company, calculated by…

Q: On January 1, 20X1, Pinnatek Inc., which uses the straight-line method, purchases a machine for…

A: Concept of Straight-Line Depreciation:Straight-line depreciation is a method used to allocate the…

Q: SnapGallery Inc. sells one digital poster frame. The sales price per unit is $12. The variable cost…

A: Step 1: Definitions Concept of Contribution Margin:The contribution margin is the difference between…

Q: What is the overall contribution margin ratio?

A: Explanation of Contribution Margin:Contribution Margin represents the amount remaining from sales…

Q: Depreciation is an example of which type of accounting concept? a) Accrualb) Conservatismc)…

A: The correct answer is:c) MatchingDepreciation is an example of the matching concept, which requires…

Q: Quick answer of this accounting question

A: Step 1: Definition of MarginMargin is a financial metric that represents the percentage of sales…

Q: Can you explain the process for solving this financial accounting question accurately?

A: Step 1: Define Withholding PercentageThe withholding percentage is the proportion of an employee's…

Q: I need help solving this general accounting question with the proper methodology.

A: Step 1: Define Under-Applied OverheadUnder-applied overhead occurs when the overhead applied to Work…

Q: Could you explain the steps for solving this general accounting question accurately?

A: Step 1: Define Percentage ChangePercentage change is a way of expressing a change in value relative…

Q: The contribution margin per unit?

A: Explanation of Contribution Margin: Contribution margin is the difference between sales revenue and…

Q: Please explain the solution to this general accounting problem with accurate explanations.

A: Step 1: Definition of Absorption Costing Net IncomeAbsorption costing includes all manufacturing…

Q: What is the net income ?

A: To calculate net income, we'll follow these steps:Step 1: Calculate Earnings Before Interest, Taxes,…

Q: None answer....??

A: Here's the explanation:The bank statement balance is $210.The service charge of $5 is deducted, so…

Q: Financial Accounting question

A: Step 1: Define LiabilitiesLiabilities are obligations or debts that a company or individual owes to…

Q: Could you explain the steps for solving this general accounting question accurately?

A: Step 1: Define Return on Equity (ROE)Return on Equity (ROE) measures the profitability of a company…

Q: Please provide my problem with accounting

A: Step 1: Definition of Predetermined Overhead RateThe predetermined overhead rate is the rate…

Q: Please explain the solution to this financial accounting problem with accurate explanations.

A: Calculation of Gross Margin:Gross Margin Formula:Gross Margin = Sales - Cost of Goods Sold (COGS)We…

Q: Can you help me solve this general accounting question using valid accounting techniques?

A: The Equity Ratio is calculated using the formula:Equity Ratio = (Total Equity) ÷ (Total…

Q: How much is Canon's cost of goods sold for the year?

A: Definition of Cost of Goods Manufactured (COGM):Cost of Goods Manufactured represents the total…

Q: Given the following information how much raw material was transferred to work in progress on March…

A: Explanation of Raw Materials Inventory:Raw Materials Inventory represents the cost of materials on…

Q: Accounting problem

A: Step 1: Definition of Variable Rate (High-Low Method)The variable rate represents the cost incurred…

Q: 5 PTS

A: Explanation of Sales: Sales represent the total revenue generated by a company through selling its…

Q: Sheinberg Industries reported 2023 sales ($ in millions) of $6,842 and a cost of goods sold of…

A: Definition of Gross Profit:Gross profit represents the difference between a company's net sales and…

Q: I am looking for the correct answer to this general accounting question with appropriate…

A: Step 1: Definition of Gross ProfitGross profit is the financial metric that represents the…

Q: Tutor, need your help

A: To calculate the number of units Pinnacle Corporation needs to manufacture during June, we need to…

Q: I am looking for a step-by-step explanation of this financial accounting problem with correct…

A: Provided Data (in millions):Total Assets = $19,580Total Stockholders' Equity = $4,225Total…

Q: HELP

A: Calculating Cash Received from Bond Sale When bonds are issued at a premium, the sale price is…

Question

I need help with this financial accounting question using the proper accounting approach.

What is the discounted payback period of a project
with an initial outlay of $50,000 and cash inflows of
$25,000 over the first four years of the project and
$15,000 over the following three years of the project,
given a cost of capital of 12%?

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Similar questions

Jasmine Manufacturing is considering a project that will require an initial investment of $52,000 and is expected to generate future cash flows of $10,000 for years 1 through 3, $8,000 for years 4 and 5, and $2,000 for years 6 through 10. What is the payback period for this project?
Project S has a cost of $10,000 and is expected to produce benefits (cash flows) of $3,000 per year for 5 years. Project L costs $25,000 and is expected to produce cash flows of $7,400 per year for 5 years. Calculate the two projects’ NPVs, IRRs, MIRRs, and PIs, assuming a cost of capital of 12%. Which project would be selected, assuming they are mutually exclusive, using each ranking method? Which should actually be selected?
Average rate of return Determine the average rate of return for a project that is estimated to yield total income of 936,000 over eight years, has a cost of 1,200,000, and has a 100,000 residual value.
Redbird Company is considering a project with an initial investment of $265,000 in new equipment that will yield annual net cash flows of $45,800 each year over its seven-year life. The companys minimum required rate of return is 8%. What is the internal rate of return? Should Redbird accept the project based on IRR?
If a copy center is considering the purchase of a new copy machine with an initial investment cost of $150,000 and the center expects an annual net cash flow of $20,000 per year, what is the payback period?
Internal rate of return A project is estimated to cost 463,565 and provide annual net cash flows of 115,000 for nine years. Determine the internal rate of return for this project, using the present value of an annuity table appearing in Exhibit 5 of this chapter.
Foster Manufacturing is analyzing a capital investment project that is forecast to produce the following cash flows and net income: The payback period of this project will be: a. 2.5 years. b. 2.6 years. c. 3.0 years. d. 3.3 years.
There are two projects under consideration by the Rainbow factory. Each of the projects will require an initial investment of $35,000 and is expected to generate the following cash flows: If the discount rate is 12%, compute the NPV of each project.
Project X costs $10,000 and will generate annual net cash inflows of $4,800 for five years. What is the NPV using 8% as the discount rate?
Buena Vision Clinic is considering an investment that requires an outlay of 600,000 and promises a net cash inflow one year from now of 810,000. Assume the cost of capital is 10 percent. Required: 1. Break the 810,000 future cash inflow into three components: a. The return of the original investment b. The cost of capital c. The profit earned on the investment 2. Now, compute the present value of the profit earned on the investment. 3. Compute the NPV of the investment. Compare this with the present value of the profit computed in Requirement 2. What does this tell you about the meaning of NPV?
What is the project's payback period on these financial accounting question?
What is the project's payback period on these financial accounting question?