Reference no: EM132928157
Problem - Langley Co is considering two projects that will each cost $1,500,000 initially and both projects will last 5 years:
Project A - This project will require $125,000 of initial working capital, and will generate $420,000 cash inflows per year for the 5 years, at the end of which time it will be scrapped with no residual value. The working capital will also be released at the end of the 5-year period to be used for other new projects.
Project B - In addition to the original investment, Project B will need $125,000 in Year 3 in order to maintain the equipment at peak capacity, and will generate $450,000 in annual cash inflows. It will be scrapped and sold as salvage for $75,000 in its final year.
The interest rate is 8%.
Required -
1) Use net present values to determine the more acceptable of the two projects.
2) Determine the internal rate of return of each project: Is it above [ ], or below[ ] 8%]. Does the IRR support your recommendation in 1)?
|
Discuss and explain the rationale for recognizing costs
: Discuss and explain the rationale for recognizing costs as expenses when services are provided and goods are sold. Please provide your opinion on this issue
|
|
Cooperative and effective working relationships
: If I want a job that Establishes and maintains cooperative and effective working relationships with superiors, peers, and subordinates across the organization.
|
|
Determine the book value of inventory
: There are 50 units of each of the three products in inventory. Determine the book value of inventory
|
|
Building support for a performance management system
: You have just been appointed the Chief Human Resource Office (CHRO) for The Gap, Inc., a large retail clothing company with more than US$1 billion in sales, 3,0
|
|
Determine the more acceptable of the two projects
: Langley Co is considering two projects that will each cost $1,500,000 initially and both projects will last 5 years: Determine more acceptable of two projects
|
|
Find the nci share of equity at the date of acquisition was
: If the company tax rate was 30%, and the partial goodwill method was adopted, the NCI share of equity at the date of acquisition was
|
|
Which consolidate statement of comprehensive income disclose
: Which consolidated statement of comprehensive income discloses the non-controlling interest as? a separate component of revenue
|
|
What is your operating leverage
: You are currently selling 25,000 units, your contribution margin per unit is $5, your fixed costs are $100,000. What is your operating leverage
|
|
How can you apply the principle of scarcity
: How can you apply the principle of scarcity when recruiting for volunteer positions. How well does the messaging harness the principles of persuasion with the t
|