Solution-Determine and interpret the net present value

Determine and interpret the net present value

Assignment Help Cost Accounting

Reference no: EM132596508

A long-term project you are currently working on, as a project manager, will be completed in 9 years. One of the site supervisors approaches you with idea of buying a bigger compacting machine. After some analysis, you identify that you can save five (5) workers' wages to a value of R145 000 per annum for the next five years if you replace the workers with the mentioned machine. The machine costs R450 000 and you can sell it for R25 000 at the end of 5 year period. The company required rate of return is 15%.

Question a. Determine and interpret the net present value (NPV) of the project

Question b. Determine and interpret the internal rate of return (IRR) for the project

Question c. If the NPV of this proposed idea is R0 based on a required rate of return of 15%, would you recommend the company to go-ahead with the decision?

Reference no: EM132596508

Questions Cloud

Determine and interpret the internal rate of return : Determine and interpret the internal rate of return (IRR) for the project. Determine and interpret the net present value (NPV) of the project

Balanced scorecard logic in the management control : What is "The balanced scorecard logic in the management control " can you please explain with some examples

Find the marginal cost of keeping the machine : Using Marginal analysis find the Marginal Cost of keeping the machine for the 2nd year. MARR = 10%

Run a stepwise regression on the dataset : What statistical assumptions must be met to use multiple regression analysis and how do you evaluate the assumptions - Run a stepwise regression on the dataset

Determine and interpret the net present value : If the NPV of this proposed idea is R0 based on a required rate of return of 15%, would you recommend the company to go-ahead with the decision?

Determine and create a schedule of cost of goods sold : How create a schedule of cost of goods sold. Assume that the company's underapplied or overapplied overhead is closed to Cost of Goods Sold.

How explain to the sales manager on managerial uses : How Explain to the sales manager on ANY THREE (3) managerial uses of cost-volume- profit analysis in decision making. Provide the suitable example.

What was the company Days Outstanding in Inventory : Easton Company had average inventory for the year of $640,000 and an inventory turnover ratio of 9.8. What was the company's Days Outstanding

Calculate the gross wages of unemployment insurance fund : Calculate the gross wages of Unemployment Insurance Fund is one of the deductions that can be made from gross wages in order to calculate taxable income

User Account

All Pages

Determine and interpret the net present value

Reference no: EM132596508

Reference no: EM132596508

Questions Cloud

Reviews

Write a Review

Cost Accounting Questions & Answers

Cost accounting assignment

Prepare the journal entries

Advise as to the liability of all the parties

Prepare revenues budget

Effect of exchange rate changes on cash and cash

Corporate governance

Cost-benefit analysis

Non-annual interest rates and annuities

Job costing in service organizations

Accounting for bad debt expense

Accounting and partnership problems

Development of relevant cash flows

Assured A++ Grade

Academics

Major Subjects

Majors

Get In Touch

TERMS & POLICIES

HELP & SUPPORT