Calculate the npv of the project assuming no inflation

Assignment Help Financial Accounting

Reference no: EM131219390

Cheap-O Foods is considering replacing all 10 of its old cash registers with new ones. The old registers are fully depreciated and have no disposal value. The new registers cost $ 899,640 (in total). Because the new registers are more efficient than the old registers, Cheap-O will have annual incremental cash savings from using the new registers in the amount of $ 192,000 per year. The registers have a 7-year useful life and no terminal disposal value and are depreciated using the straight-line method. Cheap-O requires an 8% real rate of return.

Assume that the company’s tax rate is 30%. Calculate the NPV of the project assuming no inflation.

Reference no: EM131219390

Questions Cloud

The effect on the net operating income : Bed & Bath, a retailing company, has two departments, Hardware and Linens. The company’s most recent monthly contribution format income statement follows. If the Linens Department is dropped, what will be the effect on the net operating income of the..

List two threats to compliance with fundamental principles : You have been asked by your audit client, Bolts Ltd (Bolts), to prepare a report that analyses the potential acquisition of Steel Pty Ltd (Steel). Prior to conducting your analysis, List two threats to compliance with the fundamental principles that ..

Considering the purchase of new bottling machine : Caine Bottling Corporation is considering the purchase of a new bottling machine. The machine would cost $172,129 and has an estimated useful life of 8 years with zero salvage value. Management estimates that the new bottling machine will provide net..

Calculate the npv of the project assuming no inflation : Cheap-O Foods is considering replacing all 10 of its old cash registers with new ones. The old registers are fully depreciated and have no disposal value. The new registers cost $ 899,640 (in total). Assume that the company’s tax rate is 30%. Calcula..

Emphasized in business ethics check all that apply : Which of the following is/are emphasized in business ethics check all that apply

Prepare classified balance sheet for the partnership : Terry, Nick, and Frank are forming The Doctor Partnership. Terry is transferring $29,531 of personal cash and equipment worth $24,857 to the partnership. Nick owns land worth $17,646 and a small building worth $75,981, which he transfers to the partn..

Variety of means to reduce reported financial leverage : Hiding debt from current and potential investors is nothing new. Over the years, companies have used a variety of means to reduce reported financial leverage in their balance sheets. Can you name of some of these ploys of Financial wizardry?

Name some of the benefits of budgeting : Name some of the benefits of budgeting. Which term is used for a set of budgets? List and explain the budgets in the set for a manufacturer or a merchandiser. Which budgeted financial statements are included in the set of budgets? What is meant by th..

User Account

All Pages