Compute the payback period and accounting rate of return

Assignment Help Financial Management
Reference no: EM13339152

Santana Rey is considering the purchase of equipment for Business Solutions that would allow the company to add a new product to its computer furniture line. The equipment is expected to cost $300,000 and to have a six-year life and no salvage value. It will be depreciated on a straight line basis.

Business Solutions expects to sell 100 units of the equipment's products each year. The expected annual incomes related to this equipment follows.

1683_Compute the debt ratio and equity ratio4.png

Question:

1. Compute the (1) payback period and (2) accounting rate of return for this equipment. (Record answers as percents, rounded to one decimal.)

Reference no: EM13339152

Questions Cloud

What is its initial downward acceleration : A 1.50g penny with density 7170kg/m3 is released just below the surface of a pool of water. What's its initial downward acceleration
Prepare an income statement for the year 2014 : Prepare an income statement for the year 2014 starting with income from continuing operations before taxes. Compute earnings per share as it should be shown on the face of the income statement.
Describe common security concerns inherent to wired : Describe common security concerns inherent to wired, wireless, and mobile networking.
Determine is the wavelength within the visible band : Plot B lamda for this temp, using linear axes. Either graphically or numerically, estimate the fraction of the total emission from an incandescent light bulb that falls within the visible portion of the spectrum
Compute the payback period and accounting rate of return : Compute the payback period and accounting rate of return for this equipment. (Record answers as percents, rounded to one decimal.)
Prepare budgeted income statements for each of the months : Prepare budgeted income statements for each of the months of April, May, and June that show the expected results from implementing the proposed changes. Use a three-column format, with one column for each month.
What is the terminal speed of a spherical ball : What is the terminal speed of a 5.6 kg spherical ball with a radius of 3.0 cm and a drag coefficient of 1.55? The density of the air through which the ball falls is 1.2 kg/m3
What frequency should the emf source be operated : An LCR circuit consists of a 100 ohm resistor, a 10F capacitor, and a 5 mH inductor, and is driven by an acemf source whose frequency can be varied.
Four aspects of using the sociological perspective : Four aspects of using the "sociological perspective" to understand human society. In 5-7 sentences, answer the following:

Reviews

Write a Review

Financial Management Questions & Answers

  Create a budget for the set design and construction project

Create a budget for the set design and construction project and why don't you need to take into account fringe benefit costs for the workers?

  How current and projected future economic conditions

Examine how current and projected future economic conditions affected your selections for the portfolio. Discuss at least three specific, relevant economic factors.

  Explain manage potential conflicts of interest

Financial Analysis (called Security Analysis on Wall Street) can be less than totally objective. How big a problem do you think this is? What can be done to manage potential conflicts of interest? Maybe we just have to live with it and search out ..

  Compute the black-scholes price for a call

Compute the Black-Scholes price for a call option with a strike price of $120, ?rst for a maturity of one year, and then for a variety of very long times to maturity.

  Draw a time line to show the cash flows of the project

Draw a time line to show the cash flows of the project and compute the project's payback period, net present value, profitability index, and internal rate of return.

  Consumers awareness and concerns

Collecting and using personal data: consumers' awareness and concerns

  Explain what is the amount of the average daily float

On average, it takes two days for the funds from these checks to be added to the firm's available balance at the bank once they have been deposited. What is the amount of the average daily float?

  Explain what is the price of the bond if the bond matures

What is the price of the bond if the bond matures in 5, 10, 15, or 20 years? What do you notice about the price of the bond in relationship to the maturity of the bond?

  Determine operational expenditures

Organisations' behaviour is guided by financial data. In the short term, such data will help determine operational expenditures; in the long term, historical data may help generate forecasts aimed at determining strategic plans. In both instances.

  Explain what is the effective interest rate

The lender deducts this interest amount from the loan up front and gives you $17,500. In this case, we say that the discount is $2,500. What is the effective interest rate?

  What is the cross rate between francs and pounds

The exchange rate between the US dollar and the Swiss Franc is SF1.3=$1, and the exchange rate betweent he dollar and the British pound is BP1=$1.40. What is the cross rate between francs and pounds.

  Long-term investment projects

you realize your company would make a significant profit from doing business in China. You also discover that policies on employee welfare, labor relations, etc. are the antithesis of what your CEO firmly believes.

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