what would have been the maximum amount that should be invested? Use interest rate of 9% compounded annually.

Q: this business if the market rate compounded annually.(mr=9%) 2. A project requiring an initial…

A: (IRR) Internal rate of return is the concept that computes the sum value of returns that can be…

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: An energy-efficient motor may be purchased for $3,000 that will last for 5 years. It will save $800…

A: Present Worth: It is the notion of "present value" that asserts that a sum of money is worth more…

Q: A business has two investment choices. Alternative 1 requires an immediate outlay of $2,000 and…

A: Here, Initial Outlay of Alternative-1 is $2,000 Initial Outlay of Alternative-2 is $3,000 Return in…

Q: office building is currently for sale, and you are thinking of purchasing it. From your extensive…

A: The maximum price that can be paid for a property is the present value of all net income that will…

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: Finnegan Company plans to invest in a new operating plant that is expected to cost $762,500. The…

A: Formulas that are used:-

Q: Assume everything is given in n=0, CONSTANT dollars unless otherwise stated: Hartsfield Company is…

A: IRR:- IRR stands for Internal Rate of return. IRR is the rate that measures the profitability for…

Q: what must be the market (resale) v nt? Comnany make a 16% annual

A: Definition: Annual return on investment: Return gained on investment over a period of time which is…

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: A new process for manufacturing lead pencils will have a first cost of $35,000 and annual costs of…

A: Given, Initial Cost = $35,000 Annual cost = $17,000 Annual extra income = 22,000

Q: variable cost of $375.00. They intend to sell the following number of treadmills at an average…

A:

Q: A poultry business project requires an initial investment of $75 000. The business generates the…

A: The net present value of the project is calculated as the present value of cash inflows minus the…

Q: 3. A homeowner may upgrade a furnace that runs on fuel oil to a natural gas unit. The investment…

A: The process that analyzes and evaluates any investment/project's feasibility and profitability is…

Q: Applegate Industries is planning to expand its production facility in a few years. New plant…

A: Future Value = Present Value x Future Value Factor

Q: Company ABC decided to invest in a project that will earn an income of $25,000 in the first year of…

A: Definition of Net present value:Net present value of a company is method which is used to find out…

Q: equivalent present worth of the revenue this company will generate from these sources of revenue…

A: Present Worth is the discounted value of future cash flows. As value increase at the rate of…

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: An investment company wants to study the usage of new technology for one of its clients. This…

A: Human Hour Per month = 187 Average Savings per Human hour = $450 Average savings per month =…

Q: P 1

A: that a new machine will be purchased for  $ 60000, and will save income $ 10000, with required rate…

Q: Solve

A:

Q: An energy management system that can save $8,040 per year for four (4) years, expenses are $2,000…

A: When a project has a positive rate of return, profitability is anticipated. In judging a project's…

Q: A company has just spent $189,000 in purchase of new equipment for its production business. This…

A: The present worth of an investment refers to the current value of all future cash inflows and…

Q: ment of $3M can be made in a business that will produce uniform annual revenue of $1.2M for five…

A: The minimal rate of return that an investor believes should receive in exchange for taking on a…

Q: excelo inc. just purchased a new machine for $85000. the machine will generate savings of $25000 per…

A: The initial cost and the salvage value of a machinery is known. We have to find the equivalent…

Q: Equipment that costs $15,000 and generates a $5,000 annual return would appear to "pay back" on the…

A: Given: Investment =$15000Annual return =$5000Inflation rate =30%

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

A: Net Present Value (NPV) is a financial metric used to evaluate the profitability of an investment by…

Q: Village Hardware expands its business at a cost of $20,000. They expect that the investment will…

A: future value = present value*(1+rate)n

Q: The optical products division of Panasonic is planning a $3.5 million building expansion for…

A: The present value of an annuity is the current worth of a cash flow series at a certain rate of…

Q: A company is considering expanding their production capabilities with a new machine that costs…

A: NPV is also known as Net Present Value. It is a capital budgeting technique which helps in decision…

Q: A machine having a first cost of $20,000 is expected to save $1500 in the first year of operation,…

A: Information Provided Machine first cost = $20,000 Savings in the first year = $1500 Increment in…

Q: A factory costs $810,000. You reckon that it will produce an inflow after operating costs of…

A: Initial cost (I) = $810,000 Annual net cash inflow (C) = $171,000 Period (n) = 11 years Cost of…

Q: any predicts they will make $17,948 per year over the next 6 years if they spend $14,012 on a…

A: NPV of investment is net value added by project to company and it should be accepted if NPV of…

Q: construction firm can achieve a $15,000 cost savings in Year 1, increasing by $3000 each year for…

A: Using present value and PMT function in Excel

Q: A fast food restaurant feels they could increase their profits by introducing ice cream. The…

A: Given: Year Particulars Amount 0 Initial investment -$250,000 1 Cash inflows $125,000 2…

Q: A company is considering an investment in a machine. The machine will cost $250,000 and will have a…

A: Annual Equivalent Cost (AEC) defines as the equivalent cost of owning and operating an asset over…

Q: A small northern California consulting firm wants to start a recapitalization pool for replacement…

A: Time value of money (TVM) refers to the method or technique which is used to measure the amount of…

Q: Replacing old equipment at an immediate cost of $50,000 and an additional outlay of $30,000 six…

A: Net present value is one of the technique used for capital budgeting. NPV is the difference between…

Depreciation Methods

The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.

Depreciation Accounting

In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.