User Account

All Pages

Calculate the discounted payback period

Assignment Help Accounting Basics
Reference no: EM133074935

Question - Candy Company is considering purchasing a second chocolate dipping machine in order to expand their business. The information Amazing has accumulated regarding the new machine? is:

Cost of the machine $100,000

Increased contribution margin $20,000

Life of the machine 9 years

Required rate of return 10%

Amazing estimates they will be able to produce more candy using the second machine and thus increase their annual contribution margin. They also estimate there will be a small disposal value of the machine but the cost of removal will offset that value. Ignore income tax issues in your answers. Assume all cash flows occur at? year-end except for initial investment amounts.

Required -

a. Calculate the Net present value? (NPV). ?

b. Calculate the Payback period.

c. Calculate the Discounted payback period.

Reference no: EM133074935

Questions Cloud

What is the effective annual rate : 1.Suppose your credit card issuer states that it charges a 11.25% nominal annual rate, but you must make monthly payments, which amounts to monthly compounding.
How much are you willing to pay for the field : You are considering buying a field that contains 393 barrels of oil that can be extracted. If you buy the field, you can extract the oil and sell it in one year
Compute the npv of this project : Project Alpha offers the following net cash flows following an initial (year 0), certain outlay (NINV) of $70,000.
What is the price of the stock : a) What is the price of the stock if the firm does not undertake the new project?
Calculate the discounted payback period : The information Amazing has accumulated regarding the new machine? is: Cost of the machine $100,000. Calculate the Discounted payback period
Expected payoff to the debt under limited liability : The CEO is considering using the $5 plus the $95 to invest in a project that costs $100 and that has a 50/50 chance of paying $85 or $115.
Industry example of when expert consultant : Provide a workplace or industry example of when a process consultant would be a better fit than an expert consultant.
How much would you pay for a perpetuity : How much would you pay for a perpetuity that pays $100 every year forever with the first payment made 15 years from today and assuming your annual required rate
Overview of the relevant issues facing michael bair : Provide a brief overview of the relevant issues facing Michael Bair. Maximum 100 words

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Theory of interest - term structure of interest rates

Term Structure of Interest Rates

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

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