Compute the nc equipments accounting rate of return

Assignment Help Corporate Finance

Reference no: EM13948301

Wheeler Company wants to buy a numerically controlled (NC) machine to be used in producing specially machined parts for manufacturers of trenching machines. The outlay required is $800,000. The NC equipment will last five years with no expected salvage value. The expected after-tax cash flows associated with the project follow:

Year	Cash Revenues	Cash Expenses
1	$1,300,000	$1,000,000
2	1,300,000	1,000,000
3	1,300,000	1,000,000
4	1,300,000	1,000,000
5	1,300,000	1,000,000

Required

1. Compute the payback period for the NC equipment.

2. Compute the NC equipment's accounting rate of return.

3. Compute the investment's net present value, assuming a required rate of return of 10 percent.

4. Compute the investment's internal rate of return.

Reference no: EM13948301

Questions Cloud

Consistently gave promotions and bonuses to managers : From the 1930s through the mid-1980s, General Motors consistently gave promotions and bonuses to managers who kept a low profile and avoided controversy. This is an example of which of the following organizational constraints?

Calculate the unit cell edge length : Calculate the unit cell edge length for an 80 wt% Ag-20 wt% Pd alloy. All of the palladium is in solid solution, the crystal structure for this alloy is FCC, and the room temperature density of Pd is 12.02 g/cm3.

Give a brief definition of sequential file processing. : Develop an example to illustrate your definition. (The example does not have to be as elaborate. Just a record with a simple explanation)

Identify the type of products or services company provides : Describe the company you chose (give an overview/history). Examine the company's core business/industry (also identify trends) and Identify the type of products or services the company provides (describe the problems these products/services solve)

Compute the nc equipments accounting rate of return : Compute the NC equipment's accounting rate of return. Compute the investment's net present value, assuming a required rate of return of 10 percent. Compute the investment's internal rate of return.

Use the appropriate parameters to pass information : When creating this program please write the program so that the function main, in addition to the variable declaration, is merely a collection of function calls. Your program should use the following functions

Corrosion prevention measures : Suggest an appropriate material for each of the following applications, and, if necessary, recommend corrosion prevention measures that should be taken. Justify your suggestions.

Prepare a perceptual map for your chosen product : Identify the important attributes for your chosen product and select two key variables for your perceptual map. Prepare a perceptual map for your chosen product/brand and using a minimum of seven competitors, rank each product/brand on the two va..

Small businesses generally need more marketing : Research the steps entrepreneurs on restricted marketing budgets can us to market their companies' products and services. Provide in-text citations for your sources.

User Account

All Pages