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Palo Alto Corporation is considering purchasing a new delivery truck. The truck has many advantages over the company’s current truck (not the least of which is that it runs). The new truck would cost $57,040. Because of the increased capacity, reduced maintenance costs, and increased fuel economy, the new truck is expected to generate cost savings of $7,900. At the end of 8 years the company will sell the truck for an estimated $28,020. Traditionally the company has used a rule of thumb that a proposal should not be accepted unless it has a payback period that is less than 50% of the asset’s estimated useful life. Larry Newton, a new manager, has suggested that the company should not rely solely on the payback approach, but should also employ the net present value method when evaluating new projects. The company’s cost of capital is 8%.
Compute the cash payback period and net present value of the proposed investment. (If the net present value is negative, use either a negative sign preceding the number eg -45 or parentheses eg (45). Round answer for present value to 0 decimal places, e.g. 125. Round answer for Payback period to 1 decimal place, e.g. 10.5. Round Discount Factor to 5 decimal places, e.g. 0.17986.)
Develop written policies and procedures to serve as standards of performance of the internal audit function and have the internal audit charter approved by both management and the board of directors.
The calendar year partnership started business in September 2011. Describe how all these initial expenses are treated by the partnership.
Journalize transactions using a perpetual inventory system - Prepare an adjusted trial balance and prepare an income statement and a retained earnings statement for December and a classified balance sheet at December31
Elton, Inc., which owes Boston Co. $900,000 in notes payable, is in financial difficulty. To eliminate the debt, Boston agrees to accept from Elton land having a fair market value of $680,000 and a recorded cost of $510,000. Compute the amount of gai..
heathrow issues 2800000 of 8 percent 15-year bonds dated january 1 2011 that pays interest semiannually on 30th june
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the value of the random variable for each of the experimental outcomes.three students scheduled interviews for summer
CM Corporation (CMC) was founded in 2000 by Eric Conner and Phil Martin. The company designs, installs, and services security systems for high-tech companies. The founders, who describe themselves as "entrepreneurial geeks," met in a computer lab whe..
For the analysis of financial position, compute McDonough Products' (a) Current ratio and (b) Debt ratio. Compare these ratios with the industry averages. Is McDonough Products' financial position better or worse than the average for the industry?
Heely Company manufactures a product that sells for $50 per unit. Heely incurs a variable cost per unit of $35 and $2,400,000 in total fixed costs to produce this product. They are currently selling 200,000 units. Compute the contribution margin per ..
Martin & Associates borrowed $5,000 on April 1, 2010 at 8% interest with both principal and interest due on March 31, 2011 How much should be in the firm's interest payable account at December 31, 2010?
Prepare an income statement showing revenues, expenses, pretax income, income tax expense, and net income for the year ended December 31, 2010.
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