Compute the payback period for the nc equipment

Assignment Help Financial Accounting

Reference no: EM13939476

PAYBACK, ACCOUNTING RATE OF RETURN, NET PRESENT VALUE, INTERNAL RATE OF RETURN

Whipple Company wants to buy a numerically controlled (NC) machine to be used in producing specially machined parts for manufacturers of tractors. The outlay required is $480,000. 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	$780,000	$600,000
2	780,000	600,000
3	780,000	600,000
4	780,000	600,000
5	780,000	600,000

Required:

1. Compute the payback period for the NC equipment.

2. Compute the NC equipment's ARR.

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

4. Compute the investment's IRR.

Reference no: EM13939476

Questions Cloud

Attributes of the organisational culture : Write a Discussion Paper for the General Manager setting out the attributes of the organisational culture that will position the hotel in this new market. The Discussion paper is to be no longer than 500 words.

Calculate the annual equivalent cost of the project : Houston Metropolitan Water Utility Company purchased series of high-lift centrifugal pumps for aggregate sum of $250000. The cost of energy for operating these high-lift pumps in the water distribution system was $1.4 million for the first four years..

Weigh a book on an equal-arm balance : Assume that you weigh a book on an equal-arm balance while an elevator is stopped at the ground floors. Would you get the same result if the elevator were accelerating upward? Explain you reasoning.

What do you think are the essential requirements of a qms : State what action you could personally take to support the achievement of these goals - Draw up a definition of Quality for your organisation and What is the average journey time and how much does it vary?

Compute the payback period for the nc equipment : Compute the payback period for the NC equipment. Compute the NC equipment's ARR. Compute the investment's NPV, assuming a required rate of return of 10 percent.

Has exchange in your state gained broad market recognition : Given your state’s choices regarding EHBs, type of exchange (state-run, state-federal partnership, or federally run), Medicaid expansion efforts, and so forth, how would you assess the impact of the ACA in your state to date? Speci?cally, has the exc..

Provide an overview of the organization you have chosen : Identify a large corporation. Review the information listed on the company's website, or interview someone from the respective company to answer and discuss the following information. Provide an overview of the organization you have chosen

Systems requirements-project cost benefit analysis : What are the primary functional requirements for the system in the case study? What are the non-functional requirements for the system in the case study?

Club runs different types of events : This is an individual assignment. The minimum penalty for plagiarism is loss of marks for thisassignment. If this means that a hurdle requirement is not met, the student fails the course. Please read http://www.cs.rmit.edu.au/students/integrity/ f..

User Account

All Pages