A company buys a machine for $76,000 that has an expected life of 6 years and no salvage value. Yearly cash inflows = 3,300 + 16,200 = Our experts can answer your tough homework and study questions. Peng Company is considering an investment expected to generate an average net income after taxes of $1,950 for three years. ROI is equal to turnover multiplied by earning as a percent of sales. The company uses straight-line depreciation. Capital investment: $15,000 Estimated useful life: 3 years Estimated salvage value: zero Estimated net cash inflow Year 1: $7,000 Year 2: You have the following information on a potential investment. Each investment costs $1,000, and the firm's cost of capital is 10%. This investment will produce certain services for a community such as vehicle kilometres, seat . Required information Use the following information for the Quick Study below. The company is expected to add $9,000 per year to the net income. 76,000 b. Peng Company is considering an investment expected to generate What is the annual depreciation expense using the straight line method? If the accounting ra, A company buys a machine for $76,000 that has an expected life of 7 years and no salvage value. The investment costs $51,900 and has an estimated $10,800 salvage value. 2. 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. Peng Company is considering an investment expected to generate an average net income after taxes of $1,950 for three years. The investment costs $45,000 and has an estimated $6,000 salvage value. Everything you need for your studies in one place. Peng Company is considering an investment expected to generate an average net income after taxes of $1,950 for three years. O, Reece Manufacturing Company is considering the following investment proposal: The firm uses the straight-line method of depreciation with no mid-year convention. The asset has an estimated salvage value of $12,000, and an estimated useful life of 10 years. criteria in order to generate long-term competitive financial returns and . In the next using the GC how can i determine the ratio of diastereomers. b) define symbols and develop mathematical model, how does a change in each variable affect demand. Peng Company is considering an investment expected to generate an average net income after taxes of $3,400 for three years. True, Richol Corp. is considering an investment in new equipment costing $180,000. Generation planning for power companies with hybrid production Assume the company uses straight-line depreciation. Present value The (FV of |1, PV of $1, FVA of $1 and PVA of $1). Currently, U.S. Treasury bills are yielding 6.75% and the expected return for the S & P 500 is 18.2%. Negative amounts should be indicated by #12 Createyouraccount. 200,000. Assume Peng requires a 15% return on its investments. Management estimates the machine will yield an after-tax net income of $12,500 each year. Peng Company is considering an investment expected to generate an average net income after taxes of $3,300 for three years. Flower Company is considering an investment which will return a lump sum of $2,500,000 six years from now. Melton Company's required rate of return on capital budgeting projects is 16%. Input the cash flow values by pressing the CF button. C. Appearing as a witness for a taxpayer What is the minimum salvage value that would make the investment attractive assuming a discount rate of 12%? A novel dynamic modeling method for a multi-product production line is developed to investigate dynamic properties of the system under random disruptions such as machine failures and market demand . You have the following information on a potential investment. Assume Peng requires a 15% return on its investments. Which of the following functional groups will ionize in The company has projected the following annual for the investment. a. What is the current value of the company? c) 6.65%. They first apply the real options approach to assess the investment values as well as the distribution of energies such as biomass, coal, natural . What is the NPV of the investment, The Zinger Corporation is considering an investment that has the following data: Year 1 Year 2 Year 3 Year 4 Year 5 Investment $8,000 $3,000 Cash inflow $2,000 $2,000 $5,000 $4,000 $4,000 Cash inflows occur evenly throughout the year. See Answer. The investment costs $49,000 and has an estimated $8,800 salvage value. During those years the company has been profitable, and it expects to continue to be profitable in the foreseeable future. Prepare the journal, You have the following information on a potential investment. Determine the net present value, and ind. Compute the net present value of this investment. a. Compute. The company anticipates a yearly after-tax net income of $1,805. What is the most that the company would be willing to invest in this, A company has a minimum required rate of return of 9%. Best study tips and tricks for your exams. Peng Company is considering an investment expected to generate an Cost Accounting Quiz Week 11.pdf - [The following 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. The investment costs $48,600 and has an estimated $6,300 salvage value. [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. 1, A machine costs $180,000 and will have an eight-year life, a $20,000 salvage value, and straight-line depreciation is used. the accounting rate of return for this investment; assume the company uses straight-line depreciation. (For calculation purposes, use 5 decimal places as displayed in the factor table provided.) Get access to this video and our entire Q&A library, How to Calculate Net Present Value: Definition, Formula & Analysis. The machine will cost $1,772,000 and is expected to produce a $193,000 after-tax net income to be re, A company can buy a machine that is expected to have a three-year life and a $36,000 salvage value. Peng Company is considering an investment expected to generate an average net income after taxes of $3,500 for three years. What is the present value, The Best Manufacturing Company is considering a new investment. The investment costs $45,600 and has an estimated $6,600 salvage value Compute the accounting rate of return for this investment, assume the company uses straight-line depreciation. Required information [The following information applies to the questions displayed below.) a) 2.85%. Experts are tested by Chegg as specialists in their subject area. 1,950/25,500=7.65. S4 000 per year for 6 years accumulates to $29,343.60 ($4,000 7.3359). Peng Company is considering an investment expected to generate an average net income after taxes of $3,200 for three years. (Negative amounts should be indicated by a minus sign.). The IRR on the project is 12%. Compu, Pong Company is considering an investment expected to generate an average net income after taxes of $3,500 for three years. Compute the net present value of this investment. Determine. projected GROSS cash flows from the investment are $150,000 per year. 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. Assume Peng requires a 10% return on its investments. Solved Peng Company is considering an investment expected to - Chegg Become a Study.com member to unlock this answer! Dynamic modeling and analysis of multi-product flexible production line Using the orig, A building has a cost of $500,000 and accumulated depreciation of $40,000. Compute the net present value of this 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. Amount x PV Factor = Present Value Cash Flow Annual cash flow Select Chart Present Value of an Annuity of 1 II Residual value II Net present value. Management predicts this machine has an 11-year service life and a $140,000 salvage value, and it uses s, A machine costs $400,000 and is expected to yield an after-tax net income of $9,000 each year. 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 $3,500 for three years. What investment(s) should the firm make according to net present v, Unrealized gains or losses on available-for-sale investments occur when a company adjusts the investment to : A) average value when an asset is disposed B) average value but has not yet disposed of the asset C) fair value when an asset is disposed D) f, Finnegan Company plans to invest in a new operating plant that is expected to cost $500,000. The salvage value is defined as the estimated book value of any asset after deducting all the depreciation on the asset. At a discount rate of 10 per, Zippydah Company has the following data at December 31, 2014. Capital investment - $100,000 Estimated useful life - 3 years Estimated salvage value - zero Estimated net cash inflow Year 1 - $50,000 Year 2 - $47,000 Year 3 - $44,000 Required rate, You have the following information on a potential investment: Capital Investment - $100,000 Estimated useful life - 3 years Estimated salvage value - zero Estimated net cash inflow: Year 1 - $50,000 Y, Lt. Dan Corporation invested $90,000 in manufacturing equipment. Assume the company requires a 12% rate of return on its investments. The company anticipates a yearly net income of $3,300 after taxes of 38%, with the cash flows to be received evenly throughout each year. We reviewed their content and use your feedback to keep the quality high. The machine will cost $1,804,000 and is expected to produce a $201,000 after-tax net income to be re, A company can buy a machine that is expected to have a three-year life and $30,000 salvage value. You'll get a detailed solution from a subject matter expert that helps you learn core concepts. The investment costs $57.600 and has an estimated $8,400 salvage value. The cost of capital is 6%. Peng Company is considering an investment expected to generate an Capital investment $180,000 Estimated useful life 3 years Estimated salvage value 0 Estimated annual net cash inflow $75,000 Required rate of return 10% What is the net present value of the inv, If an asset costs $210,000 and is expected to have a $30,000 salvage value at the end of its 10-year life, and it generates annual net cash inflows of $30,000, the cash payback period is: a. What is the accounti, A company buys a machine for $70,000 that has an expected life of 6 years and no salvage value. John J Wild, Ken W. Shaw, Barbara Chiappetta. Compute the accounting rate of return for this investment; assume the company uses straight-line depreciation. The investment costs $52,200 and has an estimated $9,000 salvage value. The investment costs $45,000 and has an estimated $6,000 salvage value. 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. Assume the company uses straight-line . Compute this machines accounting rate of return. Assume Peng requires a 5% return on its investments. There is a 77 percent chance that an airline passenger will Multiple Choice, returns on investment is computed in the following manner. (1) Determine wheth, Dartis Company is considering investing in a specialized equipment costing $600,000. A new operating system for an existing machine is expected to cost $, A machine costs $700,000 and is expected to yield an after-tax net income of $52,000 each year. negative? Experts are tested by Chegg as specialists in their subject area. Yea, A company projects an increase in net income of $40,000 each year for the next five years if it invests $500,000 in new equipment. 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. You can expect revenues net of any expense, except machine costs, of $150,000 at the end of each year for five years. The expected average rate of return, giving effect to depreciation on investment is 15%. Compute the net present value of this investment. The management of Samsung is planning to invest in a new companywide computerized inventory tracking system. Assume the company uses Using a sample of Chinese-listed firms with key soil pollution regulation from 2013 to 2020, this study utilized the Difference-in-Differences method . Compute the payback period. Latest Questions & Answers | Course Eagle The investment costs $45,000 and has an estimated $6,000 salvage value. 1. Management predicts this machine has a 10-year service life and a $100,000 salvage value, and it uses straight-line depreciation. Compute this machine's accounti, A machine costs $500,000 and is expected to yield an after-tax net income of $19,000 each year. Learn about what net present value is, how it is calculated both for a lump sum and for a stream of income over multiple years. Createyouraccount. Compute the accounting sane of return for this investment assume the company uses straight-line depreciation. a. Peng Company is considering an investment expected to generate an Answered: Peng Company is considering an | bartleby Peng Company is considering an investment expected to generate an average net income after taxes of $2,900 for three years. 51,000/2=25,500. a. A machine costs $180,000, has a $12,000 salvage value, is expected to last eight years, and will generate an after-tax income of $39,000 per year after straight-line depreciation. The investment costs $59,500 and has an estimated $9,300 salvage value. The investment costs $45,600 and has an estimated $6,600 salvage value. Select Chart Amount * PV Factor - Present Value Cash Flow Annual cash flow Residual value. For example: How much would you need to invest today at 10% compounded semiannually to accumulate $5,000 in 6 years from today? The initial cost and estimates of the book value of the investment at the end of each year, the net cash flows for each year, and the net income for each year are presented in the schedule below. The company's desired rate of return used in the present value calculations was, A company is considering investment in a project that costs Rs. = The company's required rate of return is 13 percent. The following data concerns a proposed equipment purchase: Cost $136,400 Salvage value $3,600 Estimated useful life 4 years Annual net cash flows $45,700 Depreciation method Straight-line The annual average investment amount used to calculate the accounti, Landmark Company is considering an investment in new equipment costing $500,000. 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. Management estimates that this machine will generate annual after-tax net income of $540. Using the straight line method of depreciation, calculate accumul, Lucky Company Is considering a capital investment in machinery: Initial investment $1,400,000 Residual value $300,000 Expected annual net cash inflows $200,000 Expected useful life 10 years Required r, The following data concerns a proposed equipment purchase: Cost $161,100 Salvage value $4,900 Estimated useful life 4 years Annual net cash flows $47,000 Depreciation method Straight-line The annual average investment amount used to calculate the accounti, You have the following information on a potential investment: Capital investment $85,000 Estimated useful life 4 years Estimated salvage value $0 Estimated annual net cash inflows: Year 1 $18,000 Ye, The Seago Company is planning to purchase $524,500 of equipment with an estimated seven-year life and no estimated salvage value. Compute the payback period. Management predicts this machine has a 10-year service life and a $100,000 salvage value, and it uses straight-line depreciation. The investment costs $56,100 and has an estimated $7,500 salvage value. 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. Compute the net present value of this investment. The investment costs $45,600 and has an estimated $8,700 salvage value. The company is currently considering an investment that is expected to generate annual cash inflows of $10,000 for 6 years. Strauss Corporation is making an $89,000 investment in equipment with a 5-year life. Peng Company is considering an investment expected to generate an average net income after taxes of $1,950 for three years. 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. QS 24-8 Net present value LO P3 Assume Peng requires a 15% return on its investments. Compute the net present value of this investment. The investment costs $56,100 and has an estimated $7,500 salvage value. 45,000+6000=51,000. Compute this machine's accoun, A machine costs $300,000 and is expected to yield an after-tax net income of $9,000 each year. If a table of present v, Grouper Company owns equipment that cost $1,044,000 and has accumulated depreciation of $440,800. Given the riskiness of the investment opportunity, your cost of capital is 27%. Compute the net present value of this investment. a. Compute this machine's accoun, If an asset costs $210,000 and is expected to have a $30,000 salvage value at the end of its ten-year life, and generates annual net cash inflows of $30,000 each year, the cash payback period is: A) 8 years B) 7 years C) 6 years D) 5 years, The anticipated purchase of a fixed asset for $400,000 with a useful life of 5 years and no residual value is expected to yield a total income of $150,000. What is the present value, Strauss Corporation is making a $87,550 investment in equipment with a 5-year life. The product line is estimated to generate cash inflows of $300,000 the first year, $250,000 the second year, and $200,000 each year thereafter for ten more years. Peng Company is considering an investment expected to generate an 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. What is the average amount invested in a machine during its predicted five-year life if it costs $200,000 and has a $20,000 salvage value? The investment costs $59,400 and has an estimated $7,200 salvage value. B. The investment costs $51,900 and has an estimated $10,800 salvage value. Thomas Company can acquire an $850,000 lathe that will benefit the firm over the next 7 years. Assume the company uses straight-line . The amount to be invested is $100,000. Question. The system, A machine costs $700,000 and is expected to yield an after-tax net income of $30,000 each year. a. The payback period, You are considering investing in a start up company. The investment costs $45,000 and has an estimated $10,800 salvage value. The company has projected the following annual cash flows f, Lt. Dan Corporation invested $80,000 in a manufacturing equipment. All rights reserved. Furthermore, the implication of strategic orientation for . Assume Peng requires a 10% return on its investments. Capital investment - $15,000 Estimated useful life - 3 years Estimated salvage value - zero Estimated net cash inflow Year 1 - $7,000 Year, A company bought a machine that has an expected life of 7 years and no salvage value. Depreciation is calculated using the straight-line method. The company pays an operating tax rate of 30%. The income tax depreciation method referred to as CCA: a) Allows a corporation some flexibility in choosing the class an asset is assigned to. Assume the company uses straight-line depreciation. (Round each present value calculation to the nearest dollar. You would need to invest S2,784 today ($5,000 0.5568). Assume Peng requires a 15% return on its investments. The investment has zero salvage value. Compute the net present value of this investment. The company uses the straight-line method of depreciation and has a tax rate of 40 percent. What is the return on investment? Select Chart Amount x PV Factor = Present Value Cash Flow Annual cash flow Residual value Net present value, Required information [The folu.ving information applies to the questions displayed below.) Compute the accounting rate of return for this investment; assume the company uses straight-line depreciation. Assume Peng requires a 5% return on its investments. Which of, Fraser Company will need a new warehouse in eight years. PV factor The approximate net present value of this project, The Zinger Corporation is considering an investment that has the following data: Year 1 Year 2 Year 3 Year 4 Year 5 Investment $17,500 $4,900 Cash inflow $3,900 $3,900 $10,000 $5,900 $5,900 Cash inflows occur evenly throughout the year. Assume Peng requires a 5% return on its investments. Ronis' investment in asset base is $1,500,000, and they assume a capital charge of 10%. Assume the company uses straight-line . (1) Determine whet, Lt. Dan Corporation invested $80,000 in a manufacturing equipment. Assume the company uses straight-line depreciation (PV of $1. The following estimates are available: Initial cost = $279,800 Cost of capital = 12% Estima, Strauss Corporation is making an $87,150 investment in equipment with a 5-year life. The current value of the building is estimated to be $300,000. What is the accountin, A company buys a machine for $62,000 that has an expected life of 7 years and no salvage value. Stop procrastinating with our smart planner features. The company's required rate of return is 11 percent. Common stock. What amount should Crane Company pay for this investment to earn an 9% return? Com, Peng Company is considering an investment expected to generate an average net income after taxes of $2,200 for three years. water? Annual savings in cash operating costs are expected to total $200,000. What amount should Elmdale Company pay for this investment to earn a 12% return? The firm has two possible investments with the following cash inflows: A B Year 1 $300 $200 2 200 200 3 100 200 a. The amount, to be invested, is $100,000. Compute the accounting rate of return for this investment; assume the company uses straight-line depreciation. If the value of leased asset is $125 and the cost of debt is 10%, what is the, The cost of capital for a firm is 10 percent. ), The net present value of the investment is -$6,921. Accounting 202 Final - Formulas and Examples. Req, CPA corporation is considering an investment with a cost of $5,000,000 an estimate useful life of 5 years, and no salvage value. The investment costs $48,600 and has an estimated $6,300 salvage value. Compute the payback period. The machine will generate annual cash flows of $21,000 for the next three years. (The following information applies to the questions displayed below) Part 1 of 2 Peng Company is considering an investment expected to generate an average net income after taxes of $2,100 for three years. To help in this, compute the cost of capital for the firm for the following: a. Assume all sales revenue is received, Elmdale Company is considering an investment that will return a lump sum of $769,700, 7 years from now. What amount should Elmdale Company pay for this investment to earn a 8% return? (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided. Average invested assets are $500,000, and Avocado Company has an 8% cost of capital. What makes this potential investment risky?