User Account

All Pages

Calculate the project net present value in dollars

Assignment Help Managerial Accounting
Reference no: EM132590890

BioFarm Inc. wants to replace its current equipment with new high-tech equipment. The existing equipment was purchased 5 years ago at a cost of $122,000. At that time, the equipment had an expected life of 10 years, with no expected salvage value. The equipment is being depreciated on a straight-line basis. Currently, the market value of the old equipment is $40,100.

  • The new equipment can be bought for $175,880, including installation. Over its 10-year life, it will reduce operating expenses from $193,900 to $145,000 for the first six years, and from $204,800 to $191,300 for the last four years. Net working capital requirements will also increase by $20,700 at the time of replacement.
  • It is estimated that the company can sell the new equipment for $24,900 at the end of its life. Since the new equipment's cash flows are relatively certain, the project's cost of capital is set at 9%, compared with 15% for an average-risk project. The firm's maximum acceptable payback period is 5 years.

Question 1: calculate the project's cash payback period in years?

Question 2: calculate the project's net present value in dollars, answer rounded off to zero decimal values?

Reference no: EM132590890

Questions Cloud

Ethical standards from appropriate sources : Develop a list of ethical guidelines that you would publish for your employees based on ethical standards from appropriate sources,
How much will you have to save each year : How much will you have to save each year for the next 35 years in order to have $1,000,000? Assume you earn 9% on your savings every year
Compute net incremental cost of buying component : An outside supplier has offered to sell the product to Paxton for $34.20. Compute the net incremental cost or savings of buying the component.
Characteristics of successful ig program : The identification and the introduction of the Principles, and the characteristics of a successful IG program.
Calculate the project net present value in dollars : Calculate the project's net present value in dollars, answer rounded off to zero decimal values? calculate the project's cash payback period in years?
Privacy and security policy for their organization : I want you to research an articles from any company from 2015 until now on how they implemented their Privacy and Security Policy for their organization.
What is the most the investor should be willing to pay : If an investor feels this investment should produce a rate of return of 10%, compounded annually, what's the most the investor should be willing to pay
Calculate the contribution margin per pound : Calculate the contribution margin per pound for each of the three products.Childress Company produces three products, K1, S5, and G9.
Compute the Hulkster return on shareholders equity : Excerpts from Hulkster Company's December 31, 2021 and 2020, financial statements are presented below: Compute the Hulkster return on shareholders equity

Reviews

Write a Review

Managerial Accounting Questions & Answers

  Briefly explain the times earned interest ratio

Briefly explain the "times earned interest ratio" and how it would be used in your analysis.Calculate the debt-to-asset ratio and rank the investments

  Calculate income before taxes for a segmented company

To calculate income before taxes for a segmented company as a whole, take contribution by segments and subtract unallocated costs

  Alexandro velez and nikhail arora of back to the roots

Alexandro Velez and Nikhail Arora of Back to the Roots must understand manufacturing costs to effectively operate and succeed as a profitable and efficient business.

  Study a real-life organisation

HI5017 Managerial Accounting - discuss how it has helped your understanding of your chosen topic - ou are to choose one management accounting topic

  Elaborate on the impact of communication in a mnc

Illustrate common and unique features of localization vs standardization using a Venn Diagram or similar chart, be sure that the chart or graph shows specific examples.

  Describes two main types of budgeting

Describes 2 main types of budgeting: static budgets and flexible budgets. Differentiate between the 2 types of budgets and include the response

  What a limitation of the internal rate of return method is

What A limitation of the internal rate of return method is that it? Does not consider the time value of money. Lacks ability to compare dissimilar projects.

  What would slosh total dollar sales have to be next year

Slosh expects to have $18,000 in fixed expenses next year. What would Slosh's total dollar sales have to be next year to generate a profit of $90,000?

  What was indiana corporations net operating income

What was Indiana Corporation's net operating income for the year using variable costing - Manufacturing costs and selling and administrative expenses for the year were as follows:

  Use the t account method to assist in your analysis

Prepare the statement of cash flows for Arduous Company. Use the T-account method to assist in your analysis.

  Calculate the total production costs of the disney project

Calculate the total production costs of the Disney Project using traditional costing, when manufacturing overhead is applied at 125% of direct labour cost.

  Development of cost standards

How are cost standards developed? Discuss the purpose for cost standards

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