Performance Evaluation of Production Lines in a Manufacturing Company Compute the payback period. Compute the accounting rate of return for this investment; assume the company uses straight-line depreciation. Compute this machine's accoun, A machine costs $505,000 and is expected to yield an after-tax net income of $20,000 each 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. turnover is sales div Peng Company is considering an investment expected to generate an average net income after taxes of $2,600 for three years. Compute the accounting rate of return for this investment; assume the company uses straight-line depreciation. Accounting Rate of Return Choose Numerator: Choose Denominator: Accounting Rate of Return nnual after-tax net incomeAnnual average investentAccounting rate of return 3,500S 27,1501= 12.891 %
Assume Peng requires a 15% return on its investments. 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. (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. The investment costs $48,600 and has an estimated $6,300 salvage value. The investment costs $51,900 and has an estimated $10,800 salvage value. What is Roni, You are considering an investment in First Allegiance Corp. Capital investment - $15,000 Estimated useful life - 3 years Estimated salvage value - zero Estimated net cash inflow: -Year 1 - $7,00, Compute the net present value of each potential investment. Assume Peng requires a 5% return on its investments. What amount should Elmdale Company pay for this investment to earn a 8% return? 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. The salvage value of the asset is expected to be $0. Yokam Company is considering two alternative projects. PV factor The profitability index for this project is: a. Compute the net present value of this investment. The company has an all-equity capital structure, and its cost of equity capital is 15 percent. Using straight-line, Wildhorse Company owns equipment that costs $1,071,000 and has accumulated depreciation of $452,200. The firm has a beta of 1.62. The average stock currently returns 15% and short-term treasury bills are offering 6%. Solved Peng Company is considering an investment expected to | Chegg.com Corresponding with the IRS in writing You w, A machine that cost $720,000 has an estimated residual value of $60,000 and an estimated useful life of eleven years. 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 $59,500 and has an estimated $9,300 salvage value. Compute the net present value of this investment. The Galley purchased some 3-year MACRS property two years ago at 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 the company uses straight-line . Peng Company is considering an investment expected to generate an Assume Peng requires a 15% return on its investments. Compute the net present value of each potential investment. 51,000/2=25,500. Assume Peng requires a 15% return on its investments. 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. Peng Company is considering an investment expected to generate an average net income after taxes of $2,700 for three years. The investment costs $57.600 and has an estimated $8,400 salvage value. information systems, employees, maintenance, and other costs (inputs). You can expect revenues net of any expense, except machine costs, of $150,000 at the end of each year for five years. 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. The company is expected to add $9,000 per year to the net income. See Answer. The present value of an annuity due for five years is 6.109. The firm is in, A large, profitable corporation with net income exceed $20 million is considering the installation of a new machine that cost $100,000 with the expected salvage value of $20,000 after 4 years of usefu, A company buys a machine for $69,000 that has an expected life of 7 years and no salvage value. X Required information Use the following information for the Quick Study below. Peng Company is considering an investment expected to generate an average net income after taxes Peng Company is considering an investment expected to generate an average net income after taxes of $1,950 for three years. 76,000 b. Assume Peng requires a 5% return on its investments. Equity method b. The investment costs$45,000 and has an estimated $6,000 salvage value. Compute the net present value of this investment. Management predicts this machine has an 11-year service life and a $60,000 salvage value, and it uses straight-line depreciation. a. The company uses the straight-line method of depreciation and has a tax rate of 40 percent. 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. Peng Company is considering an investment expected to generate an 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. 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 is considering an investment that would yield a cash flow of $20,000 in 5 years. What rate of return should you expect for your investment in Fir, If a company owns more than 20% of the stock of another company and the stock is being held as a long-term investment, which method would the investor normally use to account for this investment? A company has three independent investment opportunities. S4 000 per year for 6 years accumulates to $29,343.60 ($4,000 7.3359). Fair value method c. Historical cost m, Blue Fin Inc. requires all capital investments to generate a minimum internal rate of return of 15%. The investment costs $56,100 and has an estimated $7,500 salvage value. Strauss Corporation is making an $89,000 investment in equipment with a 5-year life. Jimmy Co. seeks to earn an average rate of return of 18% on all capital projects. Compute the net present value of this investment. CO2 aquifer storage site evaluation and monitoring: understanding the Management predicts this machine has a 9-year service life and a $140,000 salvage value, and it uses str, A machine costs $500,000 and is expected to yield an after-tax net income of $19,000 each year. c. Retained earnings. The cost of capital is 6%. Management predicts this machine has an 8-year service life and a $60,000 salvage value, and it uses straight-line depreciation. A company is deciding to invest in a new project at a cost of $2 million dollars. The company uses the straight-line method of depreciation and has a tax rate of 40 percent. Compu, A company constructed its factory with a fixed capital investment of P120M. The role of buyers justice in achieving socially sustainable global Explain. The investment costs $54,000 and has an estimated $7,200 salvage value. Free and expert-verified textbook solutions. b) define symbols and develop mathematical model, how does a change in each variable affect demand. 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. 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. Management predicts this machine has a 10-year service life and a $100,000 salvage value, and it uses straight-line depreciation. All rights reserved. An asset costs $70,000 and is expected to have a $10,000 salvage value at the end of its 10-year life. PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided. The company's required, Crispen Corporation can invest in a project that costs $400,000. This investment will produce certain services for a community such as vehicle kilometres, seat . Assume Peng requires a 5% return on its investments. The investment costs $45,000 and has an estimated $6,000 salvage value. Solved Peng Company is considering an investment expected to - Chegg Peng Company is considering an investment expected to generate an average net income after taxes of $3,200 for three years. Management predicts this machine has a 10-year service life and a $120,000 salvage value, and it uses straight-line depreciation.