Compute the accounting rate of return for this investment; assume the company uses straight-line depreciation. (FV of $1, PV of $1, FVA of $1 and PVA of $1) (Use appropriate factor(s) from the tables provided.) If a table of present v, Grouper Company owns equipment that cost $1,044,000 and has accumulated depreciation of $440,800. The company is considering an investment that would yield an after-tax cash flow of $30,000 in four years. The purpose of this study is to empirically examine the influence of firm characteristics (size, age, industry type, and ownership) on a firm's strategic orientation. It expects the free cash flow to grow at a constant rate of 5% thereafter. 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. The company currently has no debt, and its cost of equity is 15 percent. Compute the net present value of this investment. After inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction. The corporate tax rate is 35 percent. Peng Company is considering an investment expected to generate an average net income after taxes of $3,250 for three years. Negative amounts should be indicated by a minus sign.) The amount to be invested is $210,000. 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. Management predicts this machine has a 9-year service life and a $60,000 salvage value, and it uses strai, A machine costs $700,000 and is expected to yield an after-tax net income of $52,000 each year. information systems, employees, maintenance, and other costs (inputs). The net income after the tax and depreciation is expected to be P23M per year. The salvage value of the asset is expected to be $0. Assume Peng requires a 10% return on its investments. Compute the net present value of this investment. Become a Study.com member to unlock this answer! (Do not round intermediate calculations.). Given the riskiness of the investment opportunity, your cost of capital is 27%. PVA of $1. What amount should Elmdale Company pay for this investment to earn a 12% return? Required information [The following information applies to the questions displayed below.) All other trademarks and copyrights are the property of their respective owners. At a discount rate of 10 per, Zippydah Company has the following data at December 31, 2014. Compute the net present value of this investment. 2003-2023 Chegg Inc. All rights reserved. Required information [The following information applies to the questions displayed below.) (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. Required intormation Use the following information for the Quick Study below. Compu, Pong Company is considering an investment expected to generate an average net income after taxes of $3,500 for three years. The company's required, A company is considering a proposal that requires an initial investment of $91,100, has predicted net cash inflows of $30,000 per year for four years and no salvage value. 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.] Management predicts this machine has an 11-year service life and a $60,000 salvage value, and it uses straight-line depreciation. a. 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. 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. The investment costs $45,600 and has an estimated $8,700 salvage value. Compute the, A company is considering the following investment project: Capital outlay $200,000 Net Profit p.a. and EVA of S1) (Use appropriate factor(s) from the tables provided. The estimated life of the machine is 5yrs, with no salvage value. The management predicts that this machine has a 10-year services life and a $100,000 salvage value, and, The Placque Company purchased an office building for $4,555,000. 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. Required information [The following information applies to the questions displayed below.) A machine that costs $770,000 has an estimated residual value of $70,000 and an estimated useful life of 7 years. Project 2 requires an initial investment of $4,000,000 and has a present value of cash flows of $6,000,000. It expects to generate $2 million in net earnings after taxes in the coming year. The building is expected to generate net cash inflows of $15,000 per year for the next 30 years. These assets contribute $28,000 to annual net income when depreciation is computed on a straight-line basis. The Using the original cost of the asset, the unadjusted rate of return on, A machine costs $600,000 and is expected to yield an after-tax net income of $23,000 each year. The investment costs $48,600 and has an estimated $6,300 salvage value. A bond that has a $1,000 par value (face value) and a con, Strauss Corporation is making a $70,000 investment in equipment with a 5-year life. Management predicts this machine has a 10-year service life and a $100,000 salvage value, and it uses st, A machine costs $700,000 and is expected to yield an after-tax net income of $30,000 each year. Stop procrastinating with our smart planner features. Compute the accounting rate of return for, The following data concerns a proposed equipment purchase: Cost - $159,200 Salvage value - $4,800 Estimated useful life - 4 years Annual net cash flows - $46,900 Depreciation method - Straight-line The annual average investment amount used to calcul. Assume Peng requires a 10% return on its investments. The company uses the straight-line method of depreciation and has a tax rate of 40 percent. The company uses straight-line depreciation. Assume the company uses straight-line depreciation. The cost of capital is 6%. Assume Peng requires a 10% return on its investments. Yearly cash inflows = 3,300 + 16,200 = Our experts can answer your tough homework and study questions. The investment costs $45,000 and has an estimated $6,000 salvage value. Peng Company is considering an investment expected to generate an average net income after taxes of $2, 400 for three years. 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. Management estimates the machine will yield an after-tax net income of $12,500 each year. 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 investment costs $45,000 and has an estimated $6,000 salvage value. Negative amounts should be indicated by a minus sign. (1) Determine whet, Lt. Dan Corporation invested $80,000 in a manufacturing equipment. Com, Peng Company is considering an investment expected to generate an average net income after taxes of $2,200 for three years. Projected annual cash flows are: Year 1 $500,000 Year 2 $600,000 Year 3 $700,000 Year 4 $400,000 Calculate the NPV and the IRR. Assume Peng requires a 15% return on its investments. Compute the net present value of this investment. The net present value (NPV) is a capital budgeting tool. The salvage value of the asset is expected to be $0. Let us assume straight line method of depreciation. Assume the company uses straight-line depreciation. Present value Required information Use the following information for the Quick Study below. The initial outlay of the project would be $800,000 and the project's assets would have a residual value of $50,000 at the end o. Explain. Axe Corporation is considering investing in a machine that has a cost of $25,000. Assume the company uses straight-line depreciation. Peng Company is considering an investment expected to generate an average net income after taxes of $1,950 for three years. The Longlife Insurance Company has a beta of 0.8. The investment costs $45,300 and has an estimated $7,500 salvage value. The asset is recorded at $810,000 and has an economic life of eight years. 8 years b. Assume the company uses See Answer. 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. Assume Peng requires a 15% return on its investments. Crispen normally uses a 10 percent discount rate to evaluate projects but feels it should use 12 per. The company's required, Crispen Corporation can invest in a project that costs $400,000. Calculate its book value at the end of year 6. The cost of the asset is $700,000 and it will be depreciated using s, The MoMi Corporation's income before interest, depreciation and taxes, was $1.7 million in the year just ended, and it expects that this will grow by 5% per year forever. The investment costs $45,000 and has an estimated $6,000 salvage value. X The investment costs $45,600 and has an estimated $8,700 salvage value. The equipment has a five-year life and an estimated salvage value of $50,000. You'll get a detailed solution from a subject matter expert that helps you learn core concepts. Peng Company is considering an investment expected to generate an average net income after taxes of $2,700 for three years. The company requires an 8% return on its investments. (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. Choose Numerator: Accounting Rate of Return Choose Denominator: = Accounting Rate of Return = Accounting rate of return, Required information [The following information applies to the questions displayed below.) Assume Peng requires a 15% return on its investments. TABLE B.1 Present Value of 1 Rate Perlods 1% 2% 3% 4% 5% 6% 7% 8% 9% 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 0.9803 0.9612 0.9426 0.9246 0.9070 0.8900 0.8734 0.8573 0.8417 0.8264 0.7972 0.7561 0.9706 0.9423 0.9151 0.8890 0.8638 0.8396 08163 .793 0.7722 7513 7118 06575 0.9610 0.9238 0.8885 0.8548 0.8227 0.7921 0.7629 0.7350 0.7084 0.6830 0.6355 0.5718 0.9515 0.9057 0.8626 0.8219 0.7835 0.7473 0.7130 0.6806 0.6499 0.6209 0.5674 0.4972 0.9420 0.8880 0.8375 0.7903 0.7462 0.7050 0.6663 0.6302 0.5963 0.5645 0.5066 0.4323 0.9327 0.8706 0.8131 0.7599 0.7107 0.6651 0.6227 0.5835 0.5470 0.5132 0.4523 0.3759 0.9235 0.8535 0.7894 0.7307 0.6768 0.6274 0.5820 0.5403 0.5019 0.4665 0.4039 0.3269 0.9143 0.8368 0.7664 0.7026 0.6446 0.5919 0.5439 0.5002 0.4604 0.4241 0.3606 0.2843 0.9053 0.8203 0.7441 0.6756 0.6139 0.5584 0.5083 0.4632 0.4224 0.3855 0.3220 0.2472 0.8963 0.8043 0.7224 0.6496 0.5847 0.5268 0.4751 0.4289 0.3875 0.3505 0.2875 0.2149 0.8874 0.7885 0.7014 0.6246 0.5568 0.4970 0.4440 0.3971 0.3555 0.3186 0.2567 0.1869 0.8787 0.7730 0.6810 0.6006 0.5303 0.4688 0.4150 0.3677 0.3262 0.2897 0.2292 0.1625 0.8700 0.7579 0.6611 0.5775 0.5051 0.4423 0.3878 0.3405 0.2992 0.2633 0.2046 0.1413 0.8613 0.7430 0.6419 0.5553 0.4810 0.4173 0.3624 0.3152 0.2745 0.2394 0.1827 0.1229 0.8528 0.7284 0.6232 0.5339 0.4581 0.3936 0.3387 0.2919 0.2519 0.2176 0.1631 0.1069 0.8444 0.7142 0.6050 0.5134 0.4363 0.3714 0.3166 0.2703 0.2311 0.1978 0.1456 0.0929 0.8360 0.7002 0.5874 0.4936 0.4155 0.3503 0.2959 0.2502 0.2120 0.1799 0.1300 0.0808 0.8277 0.6864 0.5703 0.4746 0.3957 0.3305 0.2765 0.2317 0.1945 0.1635 0.1161 0.0703 0.8195 0.6730 0.5537 0.4564 0.3769 0.3118 0.2584 0.2145 0.1784 0.1486 0.1037 0.0611 0.7798 0.6095 0.4776 0.3751 0.2953 0.2330 0.1842 0.1460 0.1160 0.0923 0.0588 0.0304 0.7419 0.5521 0.4120 0.3083 0.2314 0.174 0.1314 0.0994 0.0754 0.0573 0.0334 0.0151 0.7059 0.5000 0.3554 0.2534 0.1813 0.1301 0.0937 0.0676 0.0490 0.0356 0.0189 0.0075 0.6717 0.4529 0.3066 0.2083 0.1420 0.0972 0.0668 0.0460 0.0318 0.0221 0.0107 0.0037 9 10 12 13 14 15 16 18 19 20 25 30 35 40 * Used to compute the present value of a known future amount. Our experts can answer your tough homework and study questions. Assume the company uses straight-line . Compute the accounting sane of return for this investment assume the company uses straight-line depreciation. 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. Experts are tested by Chegg as specialists in their subject area. The investment costs $45,000 and has an estimated $6,000 salvage value. A company is deciding to invest in a new project at a cost of $2 million dollars. 17 US public . Peng Company is considering an investment expected to generate an average net income after taxes of $1,950 for three years. The investment costs $45,600 and has an estimated $8,700 salvage value. The investment costs $48,900 and has an estimated $12,000 salvage value. You w, A machine that cost $720,000 has an estimated residual value of $60,000 and an estimated useful life of eleven years. John J Wild, Ken W. Shaw, Barbara Chiappetta.