Determine the payback period

Assignment Help Accounting Basics
Reference no: EM132033459

Question - Company X is planning on purchasing a 3-D printer. The expected cost of this printer is $75,000, and it is expected to have a useful life of 6 years and an estimated salvage value of $3,000. The printer is expected to produce cash savings of $23,000 per year in reduced labor costs and the cash operating costs to run this printer are estimated to be $5,000 per year. Assuming Company X is in the 34% tax bracket and has a minimum desired rate of return of 12% on this investment.

Determine the:

1. (a) payback period, (b) ARR, and (c) NPV (Ignoring taxes), and

2. (a) payback period, (b) ARR, and (c) NPV (Assuming taxes).

Reference no: EM132033459

Questions Cloud

How much money did i receive after the bankruptcy : I owned $10K of the junior bonds. How much money did I receive after the bankruptcy?
What is the role of parents : What is the role of parents/guardians as advocates for their children? As an early childhood special education advocate
What is the erosion cost : Class C homes are priced at $59,500 and the pop-ups sell for $5,500 each. The new mid-range camper will sell for $32,900. What is the erosion cost?
Task of estimating the value of its equity : Icarus Airlines is proposing to go public, and you have been given the task of estimating the value of its equity. Management plans to maintain debt
Determine the payback period : Company X is planning on purchasing a 3-D printer. Determine the: (a) payback period, (b) ARR, and (c) NPV (Ignoring taxes)
Discuss the effect of both the size of the rate of return : What is the least you will sell your claim for if you could earn the following rates of return on similar risk investments during the ten year period?
Find the duration of the whole bond portfolio : Find duration of whole bond portfolio if Elliot puts $ 250,000 into each of 4 U.S. Treasury bonds. Find the duration and the modified duration of each bond.
?lm festival every lvlav for the past ?ve veers : Please select the best answer and click 'suhmit.‘ Read this passage: The city has put on a ?lm festival every lvlav for the past ?ve veers
Discuss the major financial statements in detail : Discuss the major financial statements in detail. What formats are used? What significant trends (over three years) can you find

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

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