Cash flow : Cash flow is the monetary consideration (return or income) received by the business for its long-term capital investment. Net present value method: Net present value method is the method which is used to compare the initial cash outflow of investment with the present value of its cash inflows. In the net present value, the interest rate is desired by the business based on the net income from the investment, and it is also called as the discounted cash flow method . To determine: The net cash flow of Company BE.

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Answer 1

Question

Chapter 26, Problem 26.10EX

a.

To determine

Cash flow:

Cash flow is the monetary consideration (return or income) received by the business for its long-term capital investment.

Net present value method:

Net present value method is the method which is used to compare the initial cash outflow of investment with the present value of its cash inflows. In the net present value, the interest rate is desired by the business based on the net income from the investment, and it is also called as the discounted cash flow method.

To determine: The net cash flow of Company BE.

b.

To determine

To calculate: The net present value of the investment of Company BE.

c.

To determine

To analysis: Whether the Company BE should invest in the bulldozer or not.

d.

To determine

The number of operating hours that is equal to the amount of investment.

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Answer 2

Question

Chapter 26, Problem 26.10EX

a.

To determine

Cash flow:

Cash flow is the monetary consideration (return or income) received by the business for its long-term capital investment.

Net present value method:

Net present value method is the method which is used to compare the initial cash outflow of investment with the present value of its cash inflows. In the net present value, the interest rate is desired by the business based on the net income from the investment, and it is also called as the discounted cash flow method.

To determine: The net cash flow of Company BE.

b.

To determine

To calculate: The net present value of the investment of Company BE.

c.

To determine

To analysis: Whether the Company BE should invest in the bulldozer or not.

d.

To determine

The number of operating hours that is equal to the amount of investment.

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Answer 3

Question

Chapter 26, Problem 26.10EX

a.

To determine

Cash flow:

Cash flow is the monetary consideration (return or income) received by the business for its long-term capital investment.

Net present value method:

Net present value method is the method which is used to compare the initial cash outflow of investment with the present value of its cash inflows. In the net present value, the interest rate is desired by the business based on the net income from the investment, and it is also called as the discounted cash flow method.

To determine: The net cash flow of Company BE.

b.

To determine

To calculate: The net present value of the investment of Company BE.

c.

To determine

To analysis: Whether the Company BE should invest in the bulldozer or not.

d.

To determine

The number of operating hours that is equal to the amount of investment.

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Answer 4

Question

Chapter 26, Problem 26.10EX

a.

To determine

Cash flow:

Cash flow is the monetary consideration (return or income) received by the business for its long-term capital investment.

Net present value method:

Net present value method is the method which is used to compare the initial cash outflow of investment with the present value of its cash inflows. In the net present value, the interest rate is desired by the business based on the net income from the investment, and it is also called as the discounted cash flow method.

To determine: The net cash flow of Company BE.

b.

To determine

To calculate: The net present value of the investment of Company BE.

c.

To determine

To analysis: Whether the Company BE should invest in the bulldozer or not.

d.

To determine

The number of operating hours that is equal to the amount of investment.

Expert Solution & Answer

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Answer 5

Chapter 26, Problem 26.10EX

a.

To determine

Cash flow:

Cash flow is the monetary consideration (return or income) received by the business for its long-term capital investment.

Net present value method:

Net present value method is the method which is used to compare the initial cash outflow of investment with the present value of its cash inflows. In the net present value, the interest rate is desired by the business based on the net income from the investment, and it is also called as the discounted cash flow method.

To determine: The net cash flow of Company BE.

b.

To determine

To calculate: The net present value of the investment of Company BE.

c.

To determine

To analysis: Whether the Company BE should invest in the bulldozer or not.

d.

To determine

The number of operating hours that is equal to the amount of investment.

Answer 6

Chapter 26, Problem 26.10EX

a.

To determine

Cash flow:

Cash flow is the monetary consideration (return or income) received by the business for its long-term capital investment.

Net present value method:

Net present value method is the method which is used to compare the initial cash outflow of investment with the present value of its cash inflows. In the net present value, the interest rate is desired by the business based on the net income from the investment, and it is also called as the discounted cash flow method.

To determine: The net cash flow of Company BE.

Answer 7

Chapter 26, Problem 26.10EX

a.

To determine

Cash flow:

Cash flow is the monetary consideration (return or income) received by the business for its long-term capital investment.

Net present value method:

Net present value method is the method which is used to compare the initial cash outflow of investment with the present value of its cash inflows. In the net present value, the interest rate is desired by the business based on the net income from the investment, and it is also called as the discounted cash flow method.

To determine: The net cash flow of Company BE.

Answer 8

b.

To determine

To calculate: The net present value of the investment of Company BE.

Answer 9

b.

To determine

To calculate: The net present value of the investment of Company BE.

Answer 10

c.

To determine

To analysis: Whether the Company BE should invest in the bulldozer or not.

Answer 11

c.

To determine

To analysis: Whether the Company BE should invest in the bulldozer or not.

Answer 12

d.

To determine

The number of operating hours that is equal to the amount of investment.

Answer 13

d.

To determine

The number of operating hours that is equal to the amount of investment.

Answer 14

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Answer 25

Ch. 26 - What are the principal objections to the use of...Ch. 26 - Discuss the principal limitations of the cash...Ch. 26 - Prob. 3DQ Ch. 26 - Your boss has suggested that a one-year payback...Ch. 26 - Prob. 5DQ Ch. 26 - Prob. 6DQ Ch. 26 - A net present value analysis used to evaluate a...Ch. 26 - Two projects haw an identical net present value of...Ch. 26 - Prob. 9DQ Ch. 26 - What are the major disadvantages of the use of the...

Solution Summary: The author calculates the net present value of the investment of Company BE with 10% rate of return.

Concept explainers

To calculate: The net present value of the investment of Company BE.

To analysis: Whether the Company BE should invest in the bulldozer or not.

The number of operating hours that is equal to the amount of investment.

Chapter 26 Solutions