FUND OF ACCOUNTING PRIN W/ACC <CUSTOM>
25th Edition
ISBN: 9781264725403
Author: Wild
Publisher: MCG CUSTOM
expand_more
expand_more
format_list_bulleted
Question
Chapter 26, Problem 19QS
To determine
Concept Introduction:
The net present value for the investment.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
[The following information applies to the questions displayed below.]
Following is information on an investment in a manufacturing machine. The machine has zero salvage value. The company
requires a 6% return from its investments.
Initial investment
Net cash flows:
Year 1
Year 2
Year 3
QS 11-19 (Algo) Net present value with unequal cash flows LO P3
Compute this machine's net present value. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables
provided. Round all present value factors to 4 decimal places. Round present value amounts to the nearest dollar.)
Year 1
Year 2
Year 3
Totals
Initial investment
Net present value
Net Cash Flow
$
$ (220,000)
175,000
128,000
89,000
$
175,000
128,000
89,000
392,000
Present Value
Factor
Present Value of Net
Cash Flows
$
$
0
0
Required information
[The following information applies to the questions displayed below.]
Following is information on an investment in a manufacturing machine. The machine has zero salvage value. The company
requires a 3% return from its investments.
Initial investment
Net cash flows:
Year 1
Year 2
Year B
Year 1
Year 2
Year 3
Totals
Initial investment
Net present value
Compute this machine's net present value. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables
provided. Round all present value factors to 4 decimal places. Round present value amounts to the nearest dollar.)
Net Cash Flow
LUD
$
$ (230,000)
0
190,000
96,000
123,000
Present Value Present Value of Net
Factor
Cash Flows
$
09
0
0
Required information
[The following information applies to the questions displayed below.]
Following is information on an investment in a manufacturing machine. The machine has zero salvage value. The company
requires a 6% return from its investments.
Initial investment
Net cash flows:
Year 1
Year 2
Year 3
Compute this machine's net present value. (PV of $1. FV of $1. PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables
provided. Round all present value factors to 4 decimal places. Round present value amounts to the nearest dollar.)
Year 1
Year 2
Year 3
Totals
Initial investment
Net present value
$ (360,000)
190,000
138,000
113,000
Net Cash Flow
$
0
Present Value
Factor
Present Value of Net
Cash Flows
$
$
0
0
Chapter 26 Solutions
FUND OF ACCOUNTING PRIN W/ACC <CUSTOM>
Ch. 26 - Prob. 1QSCh. 26 - Prob. 2QSCh. 26 - Prob. 3QSCh. 26 - Prob. 4QSCh. 26 - Prob. 5QSCh. 26 - Prob. 6QSCh. 26 - Prob. 7QSCh. 26 - Prob. 8QSCh. 26 - Prob. 9QSCh. 26 - Prob. 10QS
Ch. 26 - Prob. 11QSCh. 26 - Prob. 12QSCh. 26 - Prob. 13QSCh. 26 - Prob. 14QSCh. 26 - Prob. 15QSCh. 26 - Prob. 16QSCh. 26 - Prob. 17QSCh. 26 - Prob. 18QSCh. 26 - Prob. 19QSCh. 26 - Prob. 20QSCh. 26 - Prob. 21QSCh. 26 - Prob. 22QSCh. 26 - Prob. 23QSCh. 26 - Prob. 24QSCh. 26 - Prob. 1ECh. 26 - Prob. 2ECh. 26 - Prob. 3ECh. 26 - Prob. 4ECh. 26 - Prob. 5ECh. 26 - Prob. 6ECh. 26 - Prob. 7ECh. 26 - Prob. 8ECh. 26 - Prob. 9ECh. 26 - Prob. 10ECh. 26 - Prob. 11ECh. 26 - Prob. 12ECh. 26 - Prob. 13ECh. 26 - Prob. 14ECh. 26 - Prob. 15ECh. 26 - Prob. 16ECh. 26 - Prob. 17ECh. 26 - Prob. 18ECh. 26 - Prob. 19ECh. 26 - Prob. 20ECh. 26 - Prob. 21ECh. 26 - Prob. 22ECh. 26 - Prob. 23ECh. 26 - Prob. 1PSACh. 26 - Prob. 2PSACh. 26 - Prob. 3PSACh. 26 - Prob. 4PSACh. 26 - Prob. 5PSACh. 26 - Prob. 6PSACh. 26 - Prob. 1PSBCh. 26 - Prob. 2PSBCh. 26 - Prob. 3PSBCh. 26 - Prob. 4PSBCh. 26 - Prob. 5PSBCh. 26 - Prob. 6PSBCh. 26 - Prob. 26SPCh. 26 - Prob. 1AACh. 26 - Prob. 2AACh. 26 - Prob. 3AACh. 26 - Prob. 1DQCh. 26 - Prob. 2DQCh. 26 - Prob. 3DQCh. 26 - Prob. 4DQCh. 26 - Prob. 5DQCh. 26 - Prob. 6DQCh. 26 - Prob. 7DQCh. 26 - Prob. 8DQCh. 26 - Prob. 9DQCh. 26 - Google managers must select depredation methods....Ch. 26 - Prob. 11DQCh. 26 - Prob. 12DQCh. 26 - Prob. 13DQCh. 26 - Prob. 1BTNCh. 26 - Prob. 2BTNCh. 26 - Prob. 3BTNCh. 26 - Prob. 4BTN
Knowledge Booster
Similar questions
- H2. Accountarrow_forwardHardevarrow_forwardThe incremental cash flow present worth (PW) equation associated with two alternatives A and B is: 0 = -53,000+ 21,000(P/A, Ai*B-A,5) + 80000(P/F, Ai*B-A,5) Please provide the answers taking sign conventions into consideration. Determine the following: a) The first cost for B b) The M&O for A c) The salvage value of B Process Alternative A Alternative B First Cost, $ -30,000 ? M&O, $/Year ? -11,000 Salvage Value, $ 4,000 ? Life, Years 5 5arrow_forward
- The manufacturing process requires a specific machine and one such machine has been identified for possible investment: Machine £ Original investment required 1,500,000 Estimated future cash flows: Year 1 641,250 Year 2 701,250 Year 3 495,000 Year 4 165,000 Year 5 165,000 Estimated residual value 108,000 To ascertain if this investment should be made it will be necessary to calculate the Payback Period, The Accounting Rate of Return and the Net Present Value. Taylor Manufacturing Plc has a requirement that investment projects should payback within four years and uses its Weighted Average Cost of Capital (WACC) as the discount factor for the Net Present Value. The WACC is also used as the minimum…arrow_forwardH1. Accountarrow_forwardQUESTION 1 a) A project requires the purchase of a new piece of machinery. choose between three potential machines (Machine A, Machine B and Machine C), either of which would be You are the project manager and must suitable. The cost of each machine is identical at £1,634,500. However, they differ in performance such that the projected future cash flows are different for each machine. Projected cash flows over a 5 year period are shown in Table Qla:. Year Cash Flow: Cash Flow: Cash Flow: Machine A Machine B Machine C -£1,634,500 -£1,634,500 -£1,634,500 950,000 950,000 200,000 2 700,500 684,500 280,000 3 560,500 600,000 440,000 4 240,000 575,000 600,000 800,000 5 130,000 550,000 Table Qla. Show the Payback Period and Total Income for each machine (Machine A, Machine B and Machine C). NOTE: ALL calculations must be shown. (i) (ii) For each machine (Machine A, Machine B and Machine C) calculate Return on Investment (ROI). NOTE: ALL calculations must be shown. (iii) For each machine…arrow_forward
- could you solve this? thank youuuarrow_forwardRequired information [The following information applies to the questions displayed below.] Kate's Candy Corporation makes chewy chocolate candies at a plant in Winston-Salem, North Carolina. Steve Bishop, the production manager at this facility, installed a packaging machine last year at a cost of $600,000. This machine is expected to last for 10 more years with no residual value. Operating costs for the projected levels of production, before depreciation, are $120,000 annually. Steve has just learned of a new packaging machine that would work much more efficiently in the production line. This machine would cost $696,000 installed, but the annual operating costs would be only $48,000 before depreciation. This machine would be depreciated over 10 years with no residual value. He could sell the current packaging machine this year for $300,000. Steve has worked for Kate's Candy for 7 years. He plans to remain with the firm for about 2 more years, when he expects to become a vice president…arrow_forwardQuestion #2 please.arrow_forward
- tekabhaiarrow_forwardQuestion Alternative A: To buy Machine Audi which is similar to the existing machineAlternative B: Go in for Machine Benz which is more expensive and has much greater capacityThe cash flows at the present level of operations under the two alternatives are as follows:Year Machine Audi Machine Benz0 (30500) (32000)1 - 145002 9000 145003 19000. 145004 16000 145005 14000 14500The company estimates that its cost of capital is 11%. At the end of year 5, Machine Audi will have a scrap value of $2500 which is not included in the table above. Machine Benz will not have any residual value (d) Calculate the Profitability Index for Machine Audi. (e) Calculate the Internal Rate of Return for both machines (Use interpolation toarrive at your final answer.) (f) Write a brief report to the management to determine whether Albert Trading should buy any machine.arrow_forwardPlease answer fastarrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Principles of Accounting Volume 2AccountingISBN:9781947172609Author:OpenStaxPublisher:OpenStax College
Principles of Accounting Volume 2
Accounting
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax College