Determine the approximate internal rate of return

Assignment Help Accounting Basics
Reference no: EM133189100

Question - Carla Vista Inc. wants to purchase a new machine for $40,110, excluding $1,200 of installation costs. The old machine was purchased 5 years ago and had an expected economic life of 10 years with no salvage value. The old machine has a book value of $2,000, and Carla Vista Inc. expects to sell it for that amount. The new machine will decrease operating costs by $8,500 each year of its economic life. The straight-line depreciation method will be used for the new machine for a 6-year period with no salvage value.

Required -

(a) Determine the cash payback period.

(b) Determine the approximate internal rate of return.

(c) Assuming the company has a required rate of return of 7%, determine whether the new machine should be purchased.

Reference no: EM133189100

Questions Cloud

How many customers are needed to make system profitable : If the average customer payment in this region is $2,900, how many customers each day, on average, are needed to make the system profitable for Cow Chips
Compute the labor rate and labor efficiency variances : Actual labor costs were $100,440 for 8,370 hours. Compute the labor rate and labor efficiency variances for the month of June
What is the carrying value of the note at December : The present value of 1 at 10% for 4 periods is 0.68301. What is the carrying value of the note at December 31, 2018
What are 2 myths instructor might hold about mental illness : What are two myths the instructor might hold about mental illness, Correct these myths with a fact
Determine the approximate internal rate of return : Carla Vista Inc. wants to purchase a new machine for $40,110, excluding $1,200 of installation costs. Determine the approximate internal rate of return
What is the amount of the discount : Question - Jenna purchased a 52-week, $1,000 T-bill issued by the U.S. Treasury. The purchase price was $964. What is the amount of the discount
Provide the journal entry to record the payroll tax : The payroll register of Castilla Heritage Co Indicates $1,404 of social security withheld. Provide the journal entry to record the payroll tax
Prepare the adjusting journal entries for sales returns : The Cost of goods sold for 2022 was $250,000. Carter estimates 10% of the sales will be returned. Prepare adjusting journal entries for sales returns payable
What was total owners equity on December : Sold merchandise for $433,771 on account and $277,329 for cash; the merchandise cost $383,994. What was total owners equity on December

Reviews

Write a Review

Accounting Basics Questions & Answers

  Calculate the companys predetermined overhead rate for

wahr corporation bases its predetermined overhead rate on the estimated labor hours for the upcoming year. at the

  Evaluate the major operations against a standard ROI

Explain what the ROI is, and why it is important for companies to evaluate all of their major operations against a standard ROI for the company.

  Discuss whether joel is behaving in a professional manner

Question - Ethics in Action. Discuss whether Joel is behaving in a professional manner and answer with three sentences or more

  Explain in details the journal entries

Explain in details the journal entries - Define The bonds and its advantages and disadvantage. Compare between bonds and shares

  Construction accounting & financial management

Time cards are being entered into the accounting system for four employees. The costs for Employee 1 areto be billed to job cost code 302.01.01100L. Ten hoursof Employee 2 time is to be billed to job cost code302.01.06110L and the remaining 30 hou..

  Calculate the npv of leasing

Calculate the NPV of leasing and advise the company as to whether it should purchase or lease the equipment with payments made in advance

  Find the total amount of inventory

Direct labor costs assigned to production $28,000. Find the total amount of inventory to be included in Elite's August 31st balance sheet

  Calculate the net book value at the end of each year

A three-year-old machine that has a cost of $55,000, an estimated residual value of $5,000, Calculate the net book value at the end of each year

  Record the adjusting entry of the unearned legal fees

Record the adjusting entry for $1,000 of the unearned legal fees earned. Katelyn Marie's Law Firm's unadjusted trial balance includes Cash $4,200

  What is the probability that this customer will not have

Consider a newly arriving customer to the checkout line. What is the probability that this customer will not have to wait behind anyone

  Prepare adjusting and correcting entries for December

Prepare adjusting and correcting entries for December 31, 2020, using the information given. Record the adjusting entry for inventory using a Cost of Goods Sold

  Calculate basic earnings per share

On 30 June 20X1, Wyatt Ltd issued 200000 fully paid ordinary shares for $1.75 cash each. Calculate basic earnings per share

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