Project pay back period.

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Answer 1

Question

Chapter 14, Problem 7F15

Payback period:

It refers to the time length that is needed in order to recover the investment cost. The project that have long payback period should not be undertaken by the company. This is an important determinant which tells the company whether to undertake the project or not. It is computed by the following formula:

Pay-back period=

Initial Investment

cash flows

To determine

Project pay back period.

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EXERCISE 3-5 Treasury Stock Held by Subsidiary LO 8 Pool Company purchased 90% of the outstanding common stock of Spruce Company on December 31, 2019, for cash. At that time the balance sheet of Spruce Company was as follows: Required: Current assets Plant and equipment Land Total assets Liabilities Common stock, $20 par value Other contributed capital Retained earnings Total Less treasury stock at cost, 5,000 shares Total equities $1,050,000 990,000 170,000 $2,210,000 $ 820,000 900,000 440,000 150,000 2,310,000 100,000 $2,210,000 Prepare the elimination entry required for the preparation of a consolidated balance sheet workpa- per on December 31, 2019, assuming: (1) The purchase price of the stock was $1,400,000. Assume that any difference between the book value of net assets and the value implied by the purchase price relates to subsidiary land. (2) The purchase price of the stock was $1,160,000. Assume that the subsidiary land has a fair value of $180,000, and the other assets and…

Answer 2

Question

Chapter 14, Problem 7F15

Payback period:

It refers to the time length that is needed in order to recover the investment cost. The project that have long payback period should not be undertaken by the company. This is an important determinant which tells the company whether to undertake the project or not. It is computed by the following formula:

Pay-back period=

Initial Investment

cash flows

To determine

Project pay back period.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 3

Question

Chapter 14, Problem 7F15

Payback period:

It refers to the time length that is needed in order to recover the investment cost. The project that have long payback period should not be undertaken by the company. This is an important determinant which tells the company whether to undertake the project or not. It is computed by the following formula:

Pay-back period=

Initial Investment

cash flows

To determine

Project pay back period.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 4

Question

Chapter 14, Problem 7F15

Payback period:

It refers to the time length that is needed in order to recover the investment cost. The project that have long payback period should not be undertaken by the company. This is an important determinant which tells the company whether to undertake the project or not. It is computed by the following formula:

Pay-back period=

Initial Investment

cash flows

To determine

Project pay back period.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 5

Chapter 14, Problem 7F15

Payback period:

It refers to the time length that is needed in order to recover the investment cost. The project that have long payback period should not be undertaken by the company. This is an important determinant which tells the company whether to undertake the project or not. It is computed by the following formula:

Pay-back period=

Initial Investment

cash flows

To determine

Project pay back period.

Answer 6

Chapter 14, Problem 7F15

Payback period:

It refers to the time length that is needed in order to recover the investment cost. The project that have long payback period should not be undertaken by the company. This is an important determinant which tells the company whether to undertake the project or not. It is computed by the following formula:

Pay-back period=

Initial Investment

cash flows

To determine

Project pay back period.

Answer 7

Chapter 14, Problem 7F15

Payback period:

It refers to the time length that is needed in order to recover the investment cost. The project that have long payback period should not be undertaken by the company. This is an important determinant which tells the company whether to undertake the project or not. It is computed by the following formula:

Pay-back period=

Initial Investment

cash flows

To determine