Calculate ARR and PP for each project

Assignment Help Accounting Basics
Reference no: EM132426826

Question - Chang De Silva Lid, an Australian entity, is offered three projects for which the cash flows are as follows in thousands of dollars. The directors work on 14 per cent as their required rate of return (RRR). Assume all cash flows occur at the end of the relevant year. No scrap values are expected for any of the projects.

Project

Year 0

Year 1

Year 2

Year 3

Year 4

Year 5

X

-390

70

90

95

100

60

Y

-310

80

100

140

150

80

Z

-250

130

70

60

40

30

Required -

a. Calculate ARR and PP for each project.

b. Rank the projects and advise Chang De Silva which projects, if any, to accept. Give your reasons.

c. What other information would be useful to consider as part of your investment decision?

Reference no: EM132426826

Questions Cloud

How much alpha corporation should report for basic earnings : Use this information to determine how much Alpha Corporation should report for 2017 basic earnings (loss) per share for income (loss) from continuing operations
Is the controller, Erin Jackson, acting ethically : Is the controller, Erin Jackson, acting ethically? Is the production manager, Alan Tyler, acting ethically? What are Jackson's ethical obligations?
Determine the amount of Total Stockholders Equity : The Common Stock account for Alpha Corporation on January 1, 2017 was $37,500. Determine the amount of Total Stockholders Equity
Determine the dollar amounts that should be reported : Use this information to determine the dollar amounts that should be reported by Alpha Company during 2017 for the following items: Dividend Income
Calculate ARR and PP for each project : Assume all cash flows occur at the end of the relevant year. Calculate ARR and PP for each project. Rank the projects and advise Chang De Silva which projects
Compare Internal Rate of Return and Net Present Value : Compare and contrast the Internal Rate of Return (IRR), the Net Present Value (NPV) and Payback approaches to capital rationing.
Compose psalm that praises gods wisdom : Compose your own psalm that delves into the depths of your emotional pain and struggle, remembers God in depths, and praise God for deliverance.
What are the balances in alpha company account : Bravo-Zulu Company reported Net Income of $25,000 on November 15, 2017. What are the FY 2017 balances in Alpha Company's account balances
Prepare the january general journal entry : Use this information to prepare the January 1, November 15 and December 31, 2017 General Journal entry (without explanation.)

Reviews

Write a Review

Accounting Basics Questions & Answers

  What is the lessees balance sheet account

Relative to the lease, what is the lessee's balance sheet account and its balance on 12/31/x2 after all JEs have been recorded?

  What is a private pension plan

How does a contributory pension plan differ from a noncontributory plan?

  Evaluate colgate dividend and earnings performance

Obtain a copy of Colgate's annual report from the Ashford Online Library or from a valid academic source found elsewhere on the Internet. If researching online.

  Indirect costs allocation to the consumer department

Management estimates that it costs $500 to analyze and close a commerical loan. This amount has been included in the $250,000 of inderict costs. How much of the $250,000 indirect costs should be allocated to the Consumer Department?

  What would be its net futa tax for the year

If the company had taxable wages (FUTA & SUTA) during the year of $315680, what would be its net FUTA tax for the year

  Calculate the weighted average cost for the han corp

Given the following information, calculate the weighted average cost for the Han Corp.

  What other types of business formations are allowed

Prepare a paper that discusses the significant elements of forming a partnership. Conduct research for the laws of Minnesota that regulate the formation of partnerships. What other types of business formations are allowed by Minnesota state law?

  Describe the main operations of the rakon ltd

Briefly describe the main operations (activities) of the Rakon Ltd and Subsidiaries group of companies

  Journalize the entry to record the cash receipts

The actual cash received during the week ended September 23 for cash sales was $15,543.00 and the amount indicated by the cash register total was $15,539.00. Journalize the entry to record the cash receipts and cash sales

  Rex and agnes harrell purchased a beach house at duck

Rex and Agnes Harrell purchased a beach house at Duck, North Caro- lina, in early 2012. Although they intended to use the beach house occasionally for rec- reational purposes, they also planned to rent it through the realty agency that had handled..

  How much fixed cost did carla janes and associates incur

A total of 550 direct labor hours was required for the production of the mirrors. Direct labor is variable and costs $10 per hour

  Calculate the percentage of consolidated net income

Explain how foreign currency fluctuations have affected the company's results of operations. Include specific evidence to support your answer.

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