Solution-Calculate the net present value of the decision

Calculate the net present value of the decision

Reference no: EM132715437

Present Value Analysis in Nonprofit Organizations

The Johnson Research Organization, a nonprofit organization that does not pay taxes, is considering buying laboratory equipment with an estimated life of seven years so it will not have to use outsiders' laboratories for certain types of work. The following are all of the cash flows affected by the decision:

Investment (outflow at time 0): $5,300,000

Periodic operating cash flows:

Annual cash savings because outside laboratories are not used: 1,530,000
Additional cash outflow for people and supplies to operate the equipment: 330,000
Salvage value after seven years, which is the estimated life of this project: 530,000

Discount rate: 14%

Required:

Problem a. Calculate the net present value of this decision.

Reference no: EM132715437

Questions Cloud

Determine before tax unit price-joseph production company : Determine the before tax unit price Joseph should bid for this contract. Round the unit price to the nearest dollar. Show all calculations.

Discuss the financial benefits of chatbots : Some people say that chatbots are inferior for chatting. Others disagree. Discuss. Discuss the financial benefits of chatbots.

What was cost of goods sold in 2019 : The Merchandise Inventory account had a January 1 balance of $30,395 and a December 31 balance of $16,767. What was Cost of Goods Sold in 2019?

Aims and objectives of the regulation : This should include the market failure(s) that this regulation is addressing, the deficiencies of the existing regulation, the aims and objectives

Calculate the net present value of the decision : The Johnson Research Organization, a nonprofit organization that does not pay taxes, Calculate the net present value of this decision.

Analyze and define organizational firewall policy : Analyze and define organizational firewall policy.

Question - Estimating Weighted Average Cost of Capital : Estimating Weighted Average Cost of Capital - At December Mattel's market value of equity was $9.2 billion, and its total market value was $11.3 billion

What are the amortized loan payment : You borrow $130,000. The loan is structured as an amortized loan to be repaid with 24 (end-of-period) payments per year.

Explain what is consolidated income : On January 1, 2000 Apple Company acquired all of the stock of Pear Company at book value. Apple accounts for its investment in Pear using the initial value.

User Account

All Pages

Calculate the net present value of the decision

Reference no: EM132715437

Reference no: EM132715437

Questions Cloud

Reviews

Write a Review

Cost Accounting Questions & Answers

Cost accounting assignment

Prepare the journal entries

Advise as to the liability of all the parties

Prepare revenues budget

Effect of exchange rate changes on cash and cash

Corporate governance

Cost-benefit analysis

Non-annual interest rates and annuities

Job costing in service organizations

Accounting for bad debt expense

Accounting and partnership problems

Development of relevant cash flows

Assured A++ Grade

Academics

Major Subjects

Majors

Get In Touch

TERMS & POLICIES

HELP & SUPPORT