Draw a cash flow diagram for each of the two options

Assignment Help Financial Accounting
Reference no: EM132614883

Two remediation options are being considered for a contaminated land area formerly used for industrial operations. Option 1 involves removing all of the contaminated soil over a two-year period at a cost of 2.2 million per year. Option 2 is to leave the soil in place but treat it with a bioremediation agent at a cost of 960,000/year over a three-year period. Subsequently, the soil would be sampled each for the next five years to ensure the effectiveness of the treatment system. The cost of the sampling program would be 250,000 the first year and 100,000/year for the remaining years.

Question a) Draw a cash flow diagram for each of the two options.

Question b) Calculate the net present value of each option based on discount rate of 6 percent/year.

Question c) Which option has the lowest overall cost? What is the difference in the total cost between the two options based on NPV? Give your answer both in dollars and as a percentage difference.

Reference no: EM132614883

Questions Cloud

Determine the allowance and prepare partial balance sheet : Determine the allowance and prepare partial balance sheet. Assuming the allowance for doubtful accounts has an unadjusted credit balance of $4,500
Solve the value of cogs for the month of april : TK Suppliers, Solve the value of COGS for the month of April and the value of ending inventory at the end of April using the FIFO method.
Survival of the music industry : Discuss one or two ways that streaming music has changed the way music is distributed in the world. Comment on whether this approach is beneficial
Who assisted you at home after your illness or operation : Write a 500-750-word essay on the influence patient education has in health care using the experiences of a patient. Interview a friend or family member about.
Draw a cash flow diagram for each of the two options : Calculate the net present value of each option based on discount rate of 6 percent/year. Draw a cash flow diagram for each of the two options.
Business experience and information accumulated : Based on your business experience and the information accumulated in this class,
Find the amount of amortization expense recognized : Keebler Company purchased the copyright to Bodine Computer Tutorials for $81,000. Find the amount of amortization expense recognized for the year 2021
What is the least will sell claim : What is the least you will sell your claim for if you could earn the following rates of return on similar risk investment during the 10 year perios?
How many years will take for the account to reach : You will be ready to purchase the new home once your savings account grows to R25,000. How many years will it take for the account to reach R25,000?

Reviews

Write a Review

Financial Accounting Questions & Answers

  Financial statement analysis and preparation

Financial Statement Analysis and Preparation

  Shareholder of a company

Describe the ways that a person can become a shareholder of a company. Why Wal-Mart would split its stock?

  Financial and accounting principles

An understanding of financial and accounting principles can be a valuable tool for managers. While not all managers will find themselves calculating financial ratios or preparing annual financial data.

  Prepare a statement of cash flow using the direct method

Prepare a Statement of Cash Flow using the Direct Method and Prepare the Operations section of the Statement of Cash Flow using the Indirect Method.

  Financial accounting assignment

This assignment has one case study and two question apart from case study. Questions related to document Liquidation question and Company financial statements question - Torquay Limited

  Prepare general journal entries for goela

Prepare general journal entries for Goela Ltd

  Principles of financial accounting

Prepare the journal entry to record the acquisition of the assets.

  Prepare general journal entries to record the transactions

Prepare general journal entries to record the transactions, assuming use of the periodic inventory system

  Global reporting initiative

Compare the view espoused by the economist Milton Friedman about the social responsibilities of business with the views express by Stigler.

  Explain the iasb conceptual frameworks

Explain the IASB Conceptual Framework's perspective of users and their decisions.

  Determine the company''s financial statements

T he focus of the report is to determine the extent to which you are comfortable relying on the financial statements as presented by management .

  Computation of free cash flow

Computation of Free Cash Flow

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