Based on your answer for 1b above should the company buy

Assignment Help Accounting Basics
Reference no: EM13581524

Company VGG is thinking of buying a factory to meet the growing demand for its products. The following is the financial data regarding this proposal.

  • Cost of the factory today $20 million
  • Annual cash flow $2 million
  • Life of the factory 15 years
  • Cost of capital 8%
  • CALCULATE THE FOLLOWING:
  • Payback period in years
  • Net present value.

Based on your answer for 1.b above, should the company buy this factory? Why or why not?Now assume that after 15 years, the factory can be sold for $12 million. What is the net present value?

Reference no: EM13581524

Questions Cloud

Oct 31 the company earned revenues of 472500 and incurred : part 2 after establishing their companys fiscal year-end to be october 31 natalie and curtis began operating cookie amp
Assuming that joe sixpack inc has 20000000 to invest which : assuming that joe sixpack inc. has 20000000 to invest which of the above companyu2019s bonds should the company invest
After recording adjusting and closing processes that makeup : after recording adjusting and closing processes that makeup the accounting information system you may have noticed
John installed a new roof on his friends house in return : indicate whether each of the items listed below would be included i in or excluded e from gross income for the 2013 tax
Based on your answer for 1b above should the company buy : company vgg is thinking of buying a factory to meet the growing demand for its products. the following is the financial
Company had processed chemical bh at a cost of 70000 this : company had processed chemical bh at a cost of 70000. this chemical can be sold now for 82000 or can be processed more
The manufacturing overhead budget at cutchin corporation is : the manufacturing overhead budget at cutchin corporation is based on budgeted direct labor-hours. the direct labor
Company yyy is thinking of buying a new and improved : company yyy is thinking of buying a new and improved machine. this machine costs 6 million today. this machine will
Should harder give a commission to its salesmen based on 10 : peterson company incurred the following high and low maintenance costs totals during 2011 432000 at 20000 units of

Reviews

Write a Review

Accounting Basics Questions & Answers

  What amount is reported for net income

Freedom Corporation reports the following amounts: Assets = $12,000; Liabilities = $2,000; Stockholders' equity = $10,000; Dividends = $2,000; Revenues = $15,000; and Expenses = $11,000. What amount is reported for net income?

  Net short-term capital loss

Robin Corporation has ordinary income from operations of $30,000, net long-term capital gain of $10,000, and net short-term capital loss of $15,000. What is the taxable income for 2007?

  The honey can be sold in raw form for 300 a pound however

the heather honey company purchases honeycombs from beekeepers for 2.00 a pound. the company produces two main products

  Machine sale-book value-journal entry

On January 1, Year 1, Jayco purchased a machine for $6,000. It had an estimated salvage value of $1,200 and a life of six years. The straight-line method of depreciation was used. At, midyear in Year 4, Jayco sold the machine for $4,500 cash.

  Calculate the three given overhead variances

Manufacturing overhead for the period is budgeted at $135,000, of which 20 percent is fixed. The 17,200 hours worked during the period resulted in production of 8,500 units. Manufacturing overhead cost incurred was $136,500.Calculate the following..

  Which type of corporate information is available to investor

Which type of corporate information is available to investors?

  Assume a manufacturer incurs 2000000 hours of direct

.assume a manufacturer incurs 2000000 hours of direct productive labor in a year at a total direct labor cost of

  What is the new companys total amount of liabilities plus

prepare a business memo in word addressed to mark zuckerberg discussing the following 1. accountbook obtains a 500000

  Intermediate accounting questions

Intermediate Accounting Questions,  Please provide thorough explanations and full calculations for each answer chosen. What is the meaning of the term market when one is valuing the raw materials inventory at lower-of-cost-and-market?

  A baker had a certain number of boxes and a certain number

a baker had a certain number of boxes and a certain number of cakes with him. initially he distributed all the cakes

  Journal entries and conversion of bonds

Prepare the journal entries for the June 30, 2013, interest payment by Madison and the conversion of the bonds (book value method).

  What accounting approach should the gab leasing company

on january 1 2011 the xgx company entered into a lease for equipment for use in its factory from the xgz leasing

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd