The investment costs $56,100 and has an estimated $7,500 salvage value. criteria in order to generate long-term competitive financial returns and . The current value of the building is estimated to be $300,000. a. Investment required $60,000,000, Salvage value after 10 years $0, Gross income $2, A company forecasts free cash flow of $40 million in three years. The company s required rate of return is 13 percent. The investment costs $45,000 and has an estimated $6.000 salvage value. 76,000 b. Yokam Company is considering two alternative projects. TABLE B.3 Present Value of an Annuity of 1 Rat Periods 1% 2% 4% 5% 6% 7% 5% 10% 12% 15% 0.9901 0.9804 0.9709 0.9615 0.9524 0.9434 0.9346 0.9259 0.9174 0.9091 0.8929 0.8696 1.9704 1.9416 1.9135 1.88611.8594 1.8334 8080 1.7833 1.759 .7355 16901 1.6257 2.9410 2.8839 2.8286 2.7751 2.7232 2.6730 2.6243 2.5771 2.5313 2.4869 2.4018 2.2832 3.9020 3.8077 3.7171 3.6299 3.5460 3.4651 3.3872 3.3121 3.2397 3.1699 3.0373 2.8550 3.9927 3.8897 3.7908 3.6048 3.3522 5.7955 5.6014 5.4172 5.2421 5.0757 4.9173 4.7665 4.6229 4.4859 4.3553 4.1114 3.7845 5.3893 5.2064 5.0330 4.8684 4.5638 4.1604 7.6517 7.3255 7.0197 6.73276.4632 6.2098 5.9713 5.7466 5.5348 5.3349 4.9676 4.4873 8.5660 8.1622 7.7861 7.4353 7.1078 6.8017 6.5152 6.2469 5.9952 5.7590 5.3282 4.7716 9.4713 8.9826 8.5302 8.1109 7.7217 7.3601 7.0236 6.7101 6.4177 6.1446 5.6502 5.0188 7.1390 6.8052 6.4951 5.93775.2337 11.255 10.5753 9.95409.3851 8.8633 8.3838 7.9427 7.5361 7.1607 6.8137 6.1944 5.4206 12.1337 11.3484 10.6350 9.9856 9.3936 8.8527 8.3577 7.9038 7.4869 7.1034 6.4235 5.5831 13.0037 12.1062 11.2961 10.5631 9.8986 9.2950 8.7455 8.2442 7.7862 7.3667 6.6282 5.7245 13.8651 .8493 11.9379 11.1184 10.3797 9.7122 9.1079 8.5595 8.0607 7.6061 6.8109 5.8474 14.7179 13.5777 12.5611 11.6523 10.8378 10.1059 9.4466 8.8514 8.3126 7.8237 6.9740 5.9542 15.5623 14.2919 13.1661 12.1657 11.2741 10.4773 9.7632 9.1216 8.5436 8.0216 7.1196 6.0472 16.3983 14.9920 13.7535 12.6593 11.6896 10.8276 10.0591 9.3719 8.7556 8.2014 7.2497 6.1280 17.2260 15.6785 14.3238 13.1339 12.0853 11.1581 10.3356 9.6036 8.9501 8.3649 7.3658 6.1982 18.0456 16.3514 14.8775 13.5903 12.4622 11.4699 10.5940 9.8181 9.1285 8.5136 7.4694 6.2593 22.0232 19.5235 17.4131 15.6221 14.0939 12.7834 11.6536 10.6748 9.8226 9.0770 7.8431 6.4641 25.8077 22.3965 19.6004 17.2920 5.3725 13.7648 12.4090 11.2578 10.2737 9.4269 8.0552 6.5660 29.4086 24.9986 21.4872 18.6646 16.3742 14.4982 12.9477 11.6546 10.5668 9.6442 8.1755 6.6166 32.8347 27.3555 23.1148 19.7928 17.1591 15.0463 13.3317 11.9246 10.7574 9.7791 8.2438 6.6418 4.8534 4.7135 4.57974.4518 4.3295 4.2124 4.1002 6.7282 6.4720 6.2303 6.0021 5.7864 5.5824 10.3676 9.7868 26 8.7605 8.3064 7.8869 7.4987 12 13 14 15 16 19 20 25 30 35 40 Used to calculate the present value of a series of equal payments made at the end of each period. Management predicts this machine has a 10-year service life and a $100,000 salvage value, and it uses straight-line depreciation. Management predicts this machine has a 8-year service life and a $100,000 salvage value, and it uses str, Carla Company owns equipment that cost $1,044,000 and has accumulated depreciation of $440,800. Assume Peng requires a 10% return on its investments. Assume the company uses straight-line depreciation (PV of $1. It is considering investing in a project that costs $210,000 and is expected to generate cash inflows of $85,000 at the end of each year for 4 years. Compute this machine's accounti, On 1/1, a company buys equipment with a cost of $8,100, an estimated salvage value of $1,100, and an estimated useful life of 7 years. Compute the net present value of this investment. (Round answer to, During the year, Loon Corporation has the following transactions: $400,000 operating income; $325,000 operating expenses; $25,000 municipal bond interest; $60,000 long-term capital gain; and $95,000 short-term capital loss. a. Project 1 requires an initial investment of $400,000 and has a present value of cash flows of $1,100,000. Compu, A company constructed its factory with a fixed capital investment of P120M. What are the appropriate labels for classifying the relationship between this cost item and th The investment costs $45,000 and has an estimated $10,800 salvage value. Project 2 requires an initial investment of $4,000,000 and has a present value of cash flows of $6,000,000. Accounting Rate of Return Choose Denominator: Choose Numerator: T = Accounting Rate of Return = Accounting rate of return 0, Required Information [The following information applies to the questions displayed below) Peng Company is considering an investment expected to generate an average net income after taxes of $1950 for three years. The equipment will be depreciated on a straight-line basis over 5-year life and is expected to generate net cash inflows of $45,000 the first year, $65,000 the second year, and $, The Seago Company is planning to purchase $436,400 of equipment with an estimated seven-year life and no estimated salvage value. QS 11-8 Net present value LO P3Peng Company is considering an investment expected to generate an average net income after taxes of $1,950 for three years. The company uses the straight-line method of depreciation and has a tax rate of 40 percent. Yearly net cash inflows (before taxes) from the machine are estimated at $140,000. Compute this machine s accoun, A machine costs $700,000 and is expected to yield an after-tax net income of $52,000 each year. earnings equal sales minus the cost of sales [22] also highlight the importance of power companies improving investment portfolio planning for various energy production resources to ensure expected production value and reduce risk. A machine costs $210,000, has a $14,000 salvage value, is expected to last ten years, and will generate an after-tax income of $43,000 per year after straight-line depreciation. Which of the following functional groups will ionize in What is the present valu, Strauss Corporation is making an $85,200 investment in equipment with a 5-year life. The Longlife Insurance Company has a beta of 0.8. What is the present value, The Best Manufacturing Company is considering a new investment. The company anticipates a yearly net income of $2,950 after taxes of 34%, with the cash flows to be received evenly throughout each year. It expects to generate $2 million in net earnings after taxes in the coming year. To make this happen, the firm, Wilcox Company is considering an investment that will generate cash revenues of $120,000 per year for 8 years, and have cash expenses of $60,000 per year for 8 years. Assume the company uses straight-line depreciation. The average stock currently returns 15% and short-term treasury bills are offering 6%. 2003-2023 Chegg Inc. All rights reserved. At the beginning of 2007, the company has a deferred tax asset of $360 pertain, Your company has been presented with an opportunity to invest in a project that is summarized as follows: Investment required $60,000,000 Annual gross income $14,000,000 Annual operating Costs 5,500,000 Salvage Value after 10 years 0 The project is expec, 1. Using the original cost of the asset, what will be the unadjusted rat, A company can buy a machine that is expected to have a three-year life and a $31,000 salvage value. Using the orig, A building has a cost of $500,000 and accumulated depreciation of $40,000. What is the present value, Strauss Corporation is making a $91,800 investment in equipment with a 5-year life. Assume that the company can invest m, For the year 2015, Ronis Corporation earned a profit of $360,000 on total sales revenue of $2,000,000. ), Summary of Strategic Management southern African concepts and case fourth edition, chapters 1 to 4, What of the following is not considered practice before the IRS per Circular 230? Assume Peng requires a 15% return on its investments. Compute the net present value of this investment. The company anticipates a yearly net income of $3,800 after taxes of 16%, with the cash flows to be received evenly throughout each year. The net present value (NPV) is a capital budgeting tool. Furthermore, the implication of strategic orientation for . Corresponding with the IRS in writing Com, Peng Company is considering an investment expected to generate an average net income after taxes of $2,200 for three years. The investment costs $45,600 and has an estimated $8,700 salvage value. The equipment will be depreciated on a straight-line basis over a five-year life and is expected to generate net cash inflows of $120,000 the first year, $140,000 the second, Assume the company requires a 10% rate of return on its investments. The investment costs $49,500 and has an estimated $10,800 salvage value. All rights reserved. The initial cost and estimates of the book value of the investment at the end of the year, the net cash flows for each year, and the net income, Crane Company is considering an investment that will return a lump sum of $898, 900, 6 years from now. Assume Peng requires a 15% return on its investments. X 2003-2023 Chegg Inc. All rights reserved. A company has three independent investment opportunities. Compute the accounting rate of return for this investment; assume the company uses straight-line depreciation. $1,950 for three years. Investment required in equipment $530,000 ; Annual cash inflows $74,000 ; Salvage value $0 ; Li, Your company has been presented with an opportunity to invest in a project. Assume the company uses straight-line . Assume Peng requires a 5% return on its investments. Required information [The following information applies to the questions displayed below.) You can expect revenues net of any expense, except machine costs, of $150,000 at the end of each year for five years. The investment costs $59,400 and has an estimated $7,200 salvage value. Management predicts this machine has a 10-year service life and a $100,000 salvage value, and it uses straight-line depreciation. Management estimates that this machine will generate annual after-tax net income of $540. A machine costs $190,000, has a $10,000 salvage value, is expected to last nine years, and will generate an after-tax income of $30,000 per year after straight-line depreciation. Compute the net present value of this investment. Input the cash flow values by pressing the CF button. a. The company anticipates a yearly net income of $3,300 after taxes of 30%, with the cash flows to be rece, A company bought a machine that has an expected life of seven years and no salvage value. The investment costs $45,000 and has an estimated $6,000 salvage value. Assume Peng requires a 5% return on its investments. Peng Company is considering an investment expected to generate an average net income after taxes of $3,300 for three years. (Round answer to 2 decimal places. Securities Cost Fair Value Trading 120,000 124,000 Non-trading 100,000 94,000 The non-trading securities are held as long-term investments. A machine costs $210,000, has a $16,000 salvage value, is expected to last nine years, and will generate an after-tax income of $47,000 per year after straight-line depreciation. Assume the company uses straight-line depreciation. 2. Fair value method c. Historical cost m, Blue Fin Inc. requires all capital investments to generate a minimum internal rate of return of 15%. It is considering investing in a project which costs $350,000 and is expected to generate cash inflows of $140,000 at the end of each year for three years.
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