Compute the net present value of each potential investment

Assignment Help Accounting Basics
Reference no: EM132060561

Question - Compute the net present value of each potential investment.

Assume the company requires a 12% rate of return on its investments. (FV of $1, PV of $1, FVA of $1and PVA of $1) (Use appropriate factor(s) from the tables provided.)

a. A new operating system for an existing machine is expected to cost $770,000 and have a useful life of six years. The system yields an incremental after-tax income of $230,000 each year after deducting its straight-line depreciation. The predicted salvage value of the system is $12,400.

b. A machine costs $520,000, has a $23,000 salvage value, is expected to last eight years, and will generate an after-tax income of $84,000 per year after straight-line depreciation.

Reference no: EM132060561

Questions Cloud

Differences in invertebrate animals versus chordates : What are the major differences in invertebrate animals versus chordates?
Two drugs for initial treatment of hypertension : He requires two drugs for initial treatment of his hypertension. Which should be prescribed in combination with a thiazide diuretic?
What is the significance of capitalizing operating leases : What is the significance of capitalizing operating leases and what effect will that have on the balance sheet as well as the other financial statements
Address domestic violence in a child : Please address domestic violence in a child and positive strategies to address violent or aggressive behavior in schools.
Compute the net present value of each potential investment : Assume the company requires a 12% rate of return on its investments. Compute the net present value of each potential investment
Can the case be heard in federal court : Louise sued Flowers in a Texas court to recover her $5,000. Rubin, on behalf of Flowers, filed a motion to dismiss claiming the Texas court has no jurisdiction.
Need for cell to glow green at 4 degree celsius : Why is there need for cell to glow green at 4 degree celsius? How we could change the cell's colour at 4 degrees celsius?
Identify laws governing employee minimum wages : Compare and contrast those laws to the U.S. minimum wage & the Fair Labor Standards Act described in the text.
Movement of the upper limb away from the trunk : 1. Why is abduction a movement of the upper limb away from the trunk? 2. Why only one bones are found in the arm or branchial region?

Reviews

Write a Review

Accounting Basics Questions & Answers

  Crane company division b recorded sales of 360000 variable

crane company division b recorded sales of 360000 variable cost of goods sold of 315000 variable selling expenses of

  What features would be most important for students

Describe how you would select the best admissions software for your college or university. What features would be most important for school administrators? What features would be most important for students?

  What amount should patent be carried on december

The present value of these cash flows, discounted at Mining's market interest rate, is $2,800,000. At what amount should the patent be carried on the December 31, 2007 balance sheet?

  Steps for the accounting cycle

What are the eight steps in the accounting cycle and how do they affect the financial statements? What happens if one is missing?

  Discuss about the partnership agreement

ABC Partnership's fiscal year ends on June 30. Its partners are on a calendar year tax basis.During the fiscal year ended June 30, 2013.

  Compute the debit or credit of given problem

Compute the debit or credit, if any, to be made to the Budgetary fund baiance for a county's General Fund under each of the following assumptions.

  Discuss primary way in which irs would calculate tax rate

The primary way in which the IRS would calculate the tax rate in order to ensure that the same level of tax revenue would still be collected

  Determine the net present value of the investment

An investment costing $200,000 will reduce operating costs by $35,000 per year for 12 years. Determine the net present value of the investment, ignore taxes

  Prepare a direct labor budget for the given months

Turks sells miniature digital cameras for $400 each. 900 units were sold in May, and it forecasts 5% growth in unit sales each month.

  Different classes of share capital

Discuss the type of company's and also explain the different classes of share capital? How they are shown in balance sheet?

  Prepare journal entries for the transactions above

Presented below are selected transactions of Molina Company. Prepare journal entries for the transactions above

  Molina medical supply company is trying to decide whether

molina medical supply company is trying to decide whether or not to continue distributing hospital supplies. the

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!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd