Concept Introduction:
Payback Period:
Payback period is the period in which the project recovers its initial cost of the investment. It can be calculated by dividing the initial investment by the annual
ARR:
Accounting
The formula to calculate ARR is as follows:
NPV:
Requirement-1:
To Calculate:
The Annual net cash flows for each project
Concept Introduction:
Payback Period:
Payback period is the period in which the project recovers its initial cost of the investment. It can be calculated by dividing the initial investment by the annual cash inflow from the project. The formula to calculate the Payback period is as follows:
ARR:
Accounting Rate of Return (ARR) is the rate of return earned on the investment made in a project. ARR is calculated by dividing the Average Accounting profits by Average Investment.
The formula to calculate ARR is as follows:
NPV:
Net present value (NPV) is the method to evaluate the project feasibility. This method calculates the present value of cash inflows and outflows, and then calculates the net present value of the investment. A project should be accepted if it has a positive NPV. The formula to calculate the NPV is as follows:
Requirement-2:
To Calculate:
The Payback period for each project
Concept Introduction:
Payback Period:
Payback period is the period in which the project recovers its initial cost of the investment. It can be calculated by dividing the initial investment by the annual cash inflow from the project. The formula to calculate the Payback period is as follows:
ARR:
Accounting Rate of Return (ARR) is the rate of return earned on the investment made in a project. ARR is calculated by dividing the Average Accounting profits by Average Investment.
The formula to calculate ARR is as follows:
NPV:
Net present value (NPV) is the method to evaluate the project feasibility. This method calculates the present value of cash inflows and outflows, and then calculates the net present value of the investment. A project should be accepted if it has a positive NPV. The formula to calculate the NPV is as follows:
Requirement-3:
To Calculate:
The Accounting rate of return for each project
Concept Introduction:
Payback Period:
Payback period is the period in which the project recovers its initial cost of the investment. It can be calculated by dividing the initial investment by the annual cash inflow from the project. The formula to calculate the Payback period is as follows:
ARR:
Accounting Rate of Return (ARR) is the rate of return earned on the investment made in a project. ARR is calculated by dividing the Average Accounting profits by Average Investment.
The formula to calculate ARR is as follows:
NPV:
Net present value (NPV) is the method to evaluate the project feasibility. This method calculates the present value of cash inflows and outflows, and then calculates the net present value of the investment. A project should be accepted if it has a positive NPV. The formula to calculate the NPV is as follows:
Requirement-4:
To Calculate:
The Net present value for each project
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Chapter 26 Solutions
FUND ACCOUNTING PRINCIPLES BUNDLE
- MERCIER MANUFACTURING Fabricating Department Production Cost Report-Weighted-Average Phycloal Units Total Costs Prior Department Material Costs Manufacturing Labor Overhead Flow of Production Units Units to be accounted for Beginning WIP inventory Units started this period 15,000 75,000 Total units to be accounted for 90,000 Units accounted for. Units completed and transferred out: From beginning inventory 15,000 Started and completed currently 60,000 Total transferred out 75,000 10,500 Units in ending WIP inventory 30,000 Total units accounted for 105,000 10,500 Costs to be accounted for. Costs in beginning WIP inventory Current period costs Total costs to be accounted for $ 0 $ Cost per equivalent unit Prior department costs Materials Labor Manufacturing overhead Costs accounted for. Costs assigned to units transformed out: Prior department costs Materials Labor Manufacturing overhead Total costs of units transfered out Costs assigned to ending WIP inventory: Prior department costs…arrow_forwardCan you explain the correct methodology to solve this general accounting problem?arrow_forwardCompute the amount of the work in process inventory on hand at year end.arrow_forward
- If a business has revenue of $677,000, cost of goods sold of $214,000, operating expenses of $157,000, and pays $70,000 in taxes, what is the net income?arrow_forwardGiven the solution and general accounting questionarrow_forwardThe current sections of Kingbird Inc.'s balance sheets at December 31, 2024 and 2025, are presented here. Kingbird's net income for 2025 was $107,100. Depreciation expense was $18,900. 2025 2024 Current assets Cash $73,500 $ 69,300 Accounts receivable 56,000 62,300 Inventory 117,600 120,400 Prepaid expenses 18,900 15,400 Total current assets $266,000 $267,400 Current liabilities Accrued expenses payable $10,500 $3,500 Accounts payable 59,500 64,400 Total current liabilities $70,000 $ 67,900 Prepare the operating activities section of the company's statement of cash flows for the year ended December 31, 2025, using the indirect method. (Show amounts that decrease cash flow with either a - sign e.g.-15,000 or in parenthesis e.g. (15,000).)arrow_forward
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