ACCOUNTING PRINCIPLES 222 5/16 >C<
ACCOUNTING PRINCIPLES 222 5/16 >C<
2nd Edition
ISBN: 9781323461525
Author: Horngren
Publisher: PEARSON C
bartleby

Videos

Question
Book Icon
Chapter 26, Problem P26.38CP
To determine

Payback period, Accounting rate of Return, Net Present value method and IRR:

All the above are the methods of capital budgeting which are having separate principles of deciding on which investment shall be taken up:

Payback period: This method is based on principle that the projects which recover which initial cash outflows earliest or within the company cut off limit, shall be accepted.

Accounting rate of return: This method computes the simple rate of return on the average investment involved in the projects and the projects which provides the highest return shall be accepted.

Net Present value: This method is based on principle of time value of money and takes decision on the basis of net residual cash inflows generated after deducting cash outflows of the projects during the whole life of projects. However, the present value of money shall be taken in to consideration while computing the cash inflows and outflows of different years within its life.

Internal return of return: This method also suggest the rate of return which the investment will realize after considering the present value of cash inflows and outflows. The Internal rate of return is that return where the present value of inflows is equal to outflows.

Profitability Index: Profitability index is also a proportion of present value of cash inflows and initial investment. The project with higher ratio shall be accepted over the other projects.

Requirement1-a:

The payback period of the project shall be determined.

To determine

Requirement 1-b:

The Accounting rate of return of the project shall be computed.

To determine

Requirement1-c:

The net present value of projects at 14% discount rate shall be computed.

To determine

Requirement1-d:

The Internal rate of return of the projects shall be computed.

To determine

Requirement2:

The decision on the project acceptance or rejection to be taken.

Blurred answer
Students have asked these similar questions
Country Selection for your Portfolio Project First, review the Portfolio Project description and the grading rubric in the Module 7 folder. Then, choose a country you will study and become an expert in as you prepare for the final project. Once you have selected a country, select a product that is currently not available there. This country-product combination will be the focus of your Portfolio Project. There can be only one person per country. So post early to ensure you get your country choice. It is best if we have representation from different regions of the world (e.g., Africa, Asia-Pacific, Europe, Latin/Caribbean, the Middle East/North Africa, and Canada), so be aware of countries that have already been selected. Helpful Hint: The World FactbookLinks to an external site. is an excellent resource to use when deciding which country you want to study.  You should respond to the product or service choice selection posted commenting on initial thoughts about appropriateness to the…
For this discussion, address the questions below: Choose a global company that you feel does an excellent job of marketing its products and services. Discuss your perception of how the company avoids self-reference criterion to market effectively to different regions. You can structure your answer in the following manner: start your post with a well-developed paragraph to explain why you selected this company for this assignment. In the next paragraph, describe what you think drives this company's marketing strategy success. The third paragraph should discuss your perception of how the company avoids self-reference criterion to market effectively to different regions. Your fourth paragraph should focus on how you think the company avoids ethnocentric behavior in international markets where they are present.
We are all strategists. That is, we set goals, navigate threats, and tap opportunities. We leverage our resources and implement decisions and actions to reach our goals. Sometimes we succeed and sometimes we fail.   (Adapted from Figure 1.1, Grant, 2022, p. 7) Please share an experience in which you played the strategist. What was your goal? Did the goal fit (or not fit) with the realities of the external environment and your resources? What implementation decisions and efforts did you make? Was your strategy successful or not? Why? Did strategy execution (i.e., implementation, monitoring, and control) play a key role in your strategy’s success or failure?

Chapter 26 Solutions

ACCOUNTING PRINCIPLES 222 5/16 >C<

Ch. 26 - Prob. 1RQCh. 26 - Describe the capital budgeting process.Ch. 26 - Prob. 3RQCh. 26 - Prob. 4RQCh. 26 - Prob. 5RQCh. 26 - Prob. 6RQCh. 26 - What is the payback method of analyzing capital...Ch. 26 - Prob. 8RQCh. 26 - Prob. 9RQCh. 26 - What is the decision rule for payback?Ch. 26 - Prob. 11RQCh. 26 - What is the accounting rate of return?Ch. 26 - How is ARR calculated?Ch. 26 - Prob. 14RQCh. 26 - Prob. 15RQCh. 26 - What is an annuity? How does it differ from a lump...Ch. 26 - Prob. 17RQCh. 26 - Prob. 18RQCh. 26 - Prob. 19RQCh. 26 - Prob. 20RQCh. 26 - Prob. 21RQCh. 26 - Prob. 22RQCh. 26 - Prob. 23RQCh. 26 - Prob. 24RQCh. 26 - Prob. 25RQCh. 26 - Prob. 26RQCh. 26 - Prob. 27RQCh. 26 - Prob. 28RQCh. 26 - Prob. 29RQCh. 26 - Prob. 30RQCh. 26 - Prob. S26.1SECh. 26 - Prob. S26.2SECh. 26 - Prob. S26.3SECh. 26 - Prob. S26.4SECh. 26 - Prob. S26.5SECh. 26 - Prob. S26.6SECh. 26 - Prob. S26.7SECh. 26 - Prob. S26.8SECh. 26 - Prob. S26.9SECh. 26 - Prob. S26.10SECh. 26 - Prob. S26.11SECh. 26 - Prob. S26.12SECh. 26 - Prob. S26.13SECh. 26 - Prob. S26.14SECh. 26 - Prob. E26.15ECh. 26 - Prob. E26.16ECh. 26 - Prob. E26.17ECh. 26 - Prob. E26.18ECh. 26 - Prob. E26.19ECh. 26 - Using ARE to make capital investment decisions...Ch. 26 - Prob. E26.21ECh. 26 - Prob. E26.22ECh. 26 - Prob. E26.23ECh. 26 - Prob. E26.24ECh. 26 - Prob. E26.25ECh. 26 - Prob. E26.26ECh. 26 - Prob. E26.27ECh. 26 - Prob. E26.28ECh. 26 - Prob. P26.29APGACh. 26 - Prob. P26.30APGACh. 26 - Using payback, ARR, and NPVwith unequal cash flows...Ch. 26 - Prob. P26.32APGACh. 26 - Prob. P26.33APGACh. 26 - Prob. P26.34BPGBCh. 26 - Prob. P26.35BPGBCh. 26 - Using payback, ARR, and NPV with unequal cash...Ch. 26 - Prob. P26.37BPGBCh. 26 - Prob. P26.38CPCh. 26 - Prob. 1CPCh. 26 - Prob. 2CPCh. 26 - Prob. 3CPCh. 26 - Prob. 4CPCh. 26 - Prob. 26.1EICh. 26 - Prob. 26.1FC
Knowledge Booster
Background pattern image
Accounting
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
SEE MORE QUESTIONS
Recommended textbooks for you
Text book image
FINANCIAL ACCOUNTING
Accounting
ISBN:9781259964947
Author:Libby
Publisher:MCG
Text book image
Accounting
Accounting
ISBN:9781337272094
Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:Cengage Learning,
Text book image
Accounting Information Systems
Accounting
ISBN:9781337619202
Author:Hall, James A.
Publisher:Cengage Learning,
Text book image
Horngren's Cost Accounting: A Managerial Emphasis...
Accounting
ISBN:9780134475585
Author:Srikant M. Datar, Madhav V. Rajan
Publisher:PEARSON
Text book image
Intermediate Accounting
Accounting
ISBN:9781259722660
Author:J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:McGraw-Hill Education
Text book image
Financial and Managerial Accounting
Accounting
ISBN:9781259726705
Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:McGraw-Hill Education
Profitability index; Author: The Finance Storyteller;https://www.youtube.com/watch?v=Md5ocNqKHq8;License: Standard Youtube License