You can specify conditions of storing and accessing cookies in your browser, Peng Company is considering an investment expected to generate an average net income after taxes of $2,600 for three years. Ronis' investment in asset base is $1,500,000, and they assume a capital charge of 10%. 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 Zinger Corporation is considering an investment that has the following data: Cash inflows occur evenly throughout the year. 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. What is the annual depreciation expense using the straight line method? Q: Peng Company is considering an investment expected to generate an average net. The investment costs $54,000 and has an estimated $7,200 salvage value. Assume Peng requires a 15% return on its investments. All other trademarks and copyrights are the property of their respective owners. 76,000 b. These assets contribute $28,000 to annual net income when depreciation is computed on a straight-line basis. 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. 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. 2. Project 1 requires an initial investment of $400,000 and has a present value of cash flows of $1,100,000. The building is expected to generate net cash inflows of $20,000 per year for the next 30 years. You can expect revenues net of any expense, except machine costs, of $150,000 at the end of each year for five years. The machine will generate annual cash flows of $21,000 for the next three years. 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. Become a Study.com member to unlock this answer! Required information [The following information applies to the questions displayed below.) The company has projected the following annual cash flows f, Lt. Dan Corporation invested $80,000 in a manufacturing equipment. The company is expected to add $9,000 per year to the net income. 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. Peng Company is considering an investment expected to generate an average net income after taxes of $3,000 for three years. They first apply the real options approach to assess the investment values as well as the distribution of energies such as biomass, coal, natural . You w, A machine that cost $720,000 has an estimated residual value of $60,000 and an estimated useful life of eleven years. Compute the net present value of this investment. it is expected that: Initial cost $2,780,000 Annual cash inflow $2,540,000 Annual cash outflows $2,260,000 Estimated useful life 10 years Salvage value $4,400,000 Discount rate 8% Calculate the net pr, Lt. Dan Corporation invested $80,000 in a manufacturing equipment. The investment costs $45,000 and has an estimated $6,000 salvage value. Required information [The folu.ving information applies to the questions displayed below.) Average invested assets are $500,000, and Avocado Company has an 8% cost of capital. The machine will cost $1,812,000 and is expected to produce a $203,000 after-tax net income to be re, A company can buy a machine that is expected to have a three-year life and a $23,000 salvage value. Comp, Pang Company is considering an investment expected to generate an average net income after taxes of $2,900 for three years. The company pays an operating tax rate of 30%. The company is considering an investment that would yield a cash flow of $20,000 in 5 years. The machine will cost $1,824,000 and is expected to produce a $206,000 after-tax net income to be re. Determine the payout period in year. a) Prepare the adjusting entries to report 1. To help in this, compute the cost of capital for the firm for the following: a. Assume Peng requires a 5% return on its investments. Input the cash flow values by pressing the CF button. The company uses the straight-line method of depreciation and has a tax rate of 40 percent. S4 000 per year for 6 years accumulates to $29,343.60 ($4,000 7.3359). 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.) Flower Company is considering an investment which will return a lump sum of $2,500,000 six years from now. Management predicts this machine has a 10-year service life and a $100,000 salvage value, and it uses straight-line depreciation. Peng Company is considering an investment expected to generate an average net income after taxes of. TABLE B.4 f= [(1 + i)"-1Vi Future Value of an Annuity of 1 Rate Periods 1% 2% 3% 6% 7% 8% 9% 10% 12% 15% 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 0000 .0000 1.0000 10000 2.0100 2.0200 2.0300 2.0400 2.0500 2.0600 2.0700 2.0800 2.0900 2.1000 2.1200 3.0301 3.0604 3.0909 3.1216 3.1525 3.1836 3.2149 3.2464 3.2781 3.3100 3.3744 4.0604 4.1216 4.1836 4.2465 4.3101 4.3746 4.4399 5.1010 5.2040 5.3091 5.4163 5.5256 5.6371 5.7507 5.8666 5.9847 6.1051 6.3528 6.1520 6.3081 6.4684 6.6330 6.8019 6.9753 7.1533 7.3359 7.5233 7.7156 8.1152 7.2135 7.4343 7.6625 7.8983 8.1420 8.3938 8.6540 8.9228 9.2004 9.4872 10.0890 8.2857 8.5830 8.8923 9.2142 9.5491 9.8975 10.2598 10.6366 11.0285 11.4359 12.2997 9.3685 9.7546 10.1591 10.5828 11.0266 11.4913 11.9780 12.4876 13.0210 13.5795 14.7757 1.0000 2.1500 3.4725 4.9934 6.7424 8.7537 11.0668 4.5061 4.5731 4.6410 4.7793 16.7858 10 10.4622 10.9497 11.4639 12.0061 12.5779 13.1808 13.8164 14.4866 15.1929 15.9374 17.5487 20.3037 11.5668 12.1687 12.8078 13.4864 14.2068 14.9716 15.7836 16.6455 7.5603 18.5312 20.6546 24.3493 12.6825 13.4121 14.1920 15.0258 15.9171 16.8699 17.8885 18.9771 20.1407 21.3843 24.1331 12 13 13.8093 14.6803 15.6178 16.6268 17.7130 18.8821 20.1406 21.4953 22.9534 24.5227 28.0291 14 14.9474 15.9739 17.0863 18.2919 19.5986 21.0151 22.5505 24.2149 26.0192 27.9750 32.3926 40.5047 15 16 17.2579 18.6393 20.1569 21.8245 23.6575 25.6725 27.8881 30.3243 33.0034 35.9497 42.7533 55.7175 17 18.4304 20.0121 21.7616 23.6975 25.8404 28.2129 30.8402 33.7502 36.9737 40.5447 48.8837 65.0751 18 19 20.8109 22.8406 25.1169 27.6712 30.5390 33.7600 37.3790 41.4463 46.0185 51.1591 63.4397 88.2118 20 22.0190 24.2974 26.8704 29.7781 33.0660 36.7856 40.9955 45.7620 51.1601 57.2750 72.0524 102.4436 25 30 35 41.6603 49.9945 60.4621 73.6522 90.3203 111.4348 138.2369 172.3168 215.7108 271.0244 431.6635 40 48.8864 60.4020 75.4013 95.0255 120.7998 154.7620 199.6351 259.0565 337.8824 442.5926 767.0914 1,779.0903 29.0017 34.3519 16.0969 7.2934 18.5989 20.0236 21.5786 23.2760 25.1290 27.1521 29.3609 31.7725 37.2797 47.5804 19.6147 21.4123 23.4144 25.6454 28.1324 30.9057 33.9990 37.4502 41.3013 45.5992 55.7497 75.8364 28.2432 32.0303 36.4593 41.6459 47.7271 54.8645 63.2490 73.1059 84.7009 98.3471 133.3339 212.7930 34.7849 40.5681 47.5754 56.0849 66.4388 79.0582 94.4608 113.2832 136.3075 164.4940 241.3327 434.7451 881.1702 Used to calculate the future value of a series of equal payments made at the end of each period. 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. B. Yokam Company is considering two alternative projects. The investment costs $56,100 and has an estimated $7,500 salvage value. It is expected that the rate of utilization of inputs should not exceed the corresponding outputs being produced if the efficiency of the system concerned is to be maximized. 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. a. information systems, employees, maintenance, and other costs (inputs). Babirusa Company is considering the following investment: Initial capital investment $175,000 Estimated useful life 3 years Estimated disposal value in 3 years $25,000 Estimated annual savings in cas, Sunset Inc. is trying to determine if they should invest in a new machine that would be more efficient and would generate an annual profit of $100,000 (after tax). The company uses the straight-line method of depreciation and has a tax rate of 40 per cent. Peng Company is considering an investment expected to generate an average net income after taxes of $2,000 for three years. Ignore income taxes. Assume the company uses straight-line depreciation. Required information [The following information applies to the questions displayed below.] c) Only applies to a business organized as corporations. What amount should Elmdale Company pay for this investment to earn a 8% return? Experts are tested by Chegg as specialists in their subject area. The company uses the straight-line method of depreciation and has a tax rate of 40 percent. The company anticipates a yearly net income of $3,650 after taxes of 22%, with the cash flows to be received evenly throughout each year. PV factor Compute the accounting rate of return for this investment; assume the company uses straight-line depreciation. Assume the company uses straight-line depreciation. Assume Peng requires a 15% return on its investments. Compute the net present value of this investment. Assume the company requires a 12% rate of return on its investments. The machine will cost $1,764,000 and is expected to produce a $191,000 after-tax net income to be received at the end of each year. Required information (The following information applies to the questions displayed below.] Year 0 ($400,000) initial investment Year 1 $140,000 Year 2 120,000 Year 3 100,000 Year 4 80,000, A company has a minimum required rate of return of 10%. The investment costs $59,500 and has an estimated $9,300 salvage value. The net present value (NPV) is a capital budgeting tool. The current value of the building is estimated to be $120,000. Assume Peng requires a 5% return on its investments. Assume the company uses straight-line depreciation (PV of $1. The company uses the straight-line method of depreciation and has a tax rate of 40 percent. The company uses the straight-line method of d, Determine Present Value: You can invest in a machine that costs $500,000. A negative NPV would suggest that the project is not worth investing since it will probably yield to a loss while a positive NPV would suggest otherwise. 2.72. If the hurdle rate is 6%, what is the investment's net present value? Using the orig, A building has a cost of $500,000 and accumulated depreciation of $40,000. Yearly cash inflows = 3,300 + 16,200 = Our experts can answer your tough homework and study questions. The expected future net cash flows from the use of the asset are expected to be $580,000. Accounting 202 Final - Formulas and Examples. Compute the accounting rate of return for this investment assume the company uses straight-line depreciation BOOK Accounting Rate of Return Choose Denominator: Choose Numerator = = Accounting Rate of Return Accounting rate of retum Print teferences. The company is expected to add $9,000 per year to the net income. Assume Pang requires a 5% return on its investments. 2003-2023 Chegg Inc. All rights reserved. QS 25-7 Computation of accounting rate of return LO P2 Compute the accounting rate of return for this investment; assume the company uses straight-line depreciation. 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 building is expected to generate net cash inflows of $15,000 per year for the next 30 years. $1,950 for three years. (Round your computations and answers to 0 decimal p, BAP Corporation is reviewing an investment proposal. Our experts can answer your tough homework and study questions. 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.

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