User Account

All Pages

Determine what is the initial investment

Assignment Help Financial Accounting
Reference no: EM132504661

Point 1: ABC Manufacturing Limited has a machine currently in use that was originally purchased three years ago for $120,000. The firm depreciates the machine on the straight-line basis using a five-year recovery period. The present machine will last for the next five years or, once removal and clean-up costs are taken into consideration, it could be sold now for $70,000.

Point 2: ABC can buy a new machine today for a net price of $145,000 plus installation costs of $15,000. The proposed machine will be depreciated using a five-year straight-line depreciation period. If the firm acquires the new machine, its working capital needs will change: accounts receivable will increase $15,000, inventory will increase $19,000 and accounts payable will increase $16,000.

Question 1: What is the initial investment?

Reference no: EM132504661

Questions Cloud

Explain what are accruals and give an example : Prepare the below accounts (taking also into account the notes) for 2018 indicating the amounts that should be reported in the Profit and Loss account.
Write an entries to record the transactions : Write an Entries to record the transactions. On January 2, 2018, the shareholders of Mari Company approved a plan that grants the company
What would be the loss allocated for each partner : $400,000; the partners have sufficient cash to make up any capital deficiencies. What would be the loss allocated for each partner.
Create depreciation schedule for present machine : Create depreciation schedule for both the proposed and the present machine. Both machines are depreciated using a five-year recovery period.
Determine what is the initial investment : Determine What is the initial investment. ABC Manufacturing Limited has a machine currently in use that was originally purchased three years ago
Does new assumption change the investment decision : Calculate the new net present value given this assumption. (Negative amount should be indicated by a minus sign. Do not round intermediate calculations).
Should debby buy the new equipment : What is the expected net present value? (Negative amount should be indicated by a minus sign. Do not round intermediate calculations).
Find what is expected value of unit sales for new product : Find What is the expected value of unit sales for the new product? (Do not round intermediate calculations and round your answer to the nearest whole unit.)
How much can be withdrawn each quarter for five years : If $15,000 is deposited into a savings account that pays 4% interest compounded quarterly, how much can be withdrawn each quarter for five years?

Reviews

Write a Review

Financial Accounting Questions & Answers

  Determine the quick ratio for both companies

Determine the quick ratio for both companies, and interpret the quick ratio difference between the twocompanies.

  Relevant interest rate for this type of investment

What would you pay for an investment that pays you $4,000,000 after forty years? Assume that the relevant interest rate for this type of investment is 6%.

  Question julio produces two kinds of calculator standard

question julio produces two kinds of calculator standard and deluxe. the company is presently using a traditional

  Calculate copias working capital and payables turnover

Calculate Copia's working capital, payables turnover, and days' payable for 2013 and 2014. Assess Copia's liquidity and cash flows in relation to the change in payables turnover from 2013 to 2014.

  Solve annual nominal rate of discount equal

The interest is accrued at an annual nominal rate of discount equal to 5% compounded semiannually

  Compute the ending inventory for tina argentine company

Compute the ending inventory for Tina Argentine Company for 2009 through 2014 using the dollar-value LIFO method.

  Create a provision for doubtful debt

Create a provision for doubtful debt Rs. 1,000. ii) Building is to be depreciated by 5 %. iii) Machinery is to be depreciated by 10 %. iv) Goodwill of the firm is to be valued at Rs. 30,000.

  Determine the inventory turnover and days in inventory

Determine the inventory turnover and days in inventory for 2011 and 2012. Discuss the changes in the amount of inventory, the inventory turnover and days in inventory, and the amount of sales across the two years.

  Provide the journal entry for december

Prepare a bond amortization table assuming straight-line amortization. Provide the journal entry for December 31, 2010.

  Enter the given transactions in the ledger of a

Enter the given transactions in the ledger of A. Baker and prepare a trial balance at 31 May, together with a calculation of the profit for the month and a statement of financial position at 31 May.

  What amount of loss on realization should be allocated

After all noncash assets are sold and all liabilities are paid, there is a cash balance of $130,000. What amount of loss on realization should be allocated to Soledad?

  Choose a product to manufacture

Estimated sales budget, estimated direct materials budget, estimated direct labors budget, estimated manufacturing overhead budget, estimated selling and administrative expenses and an estimated income statement.

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd