During the year equipment was sold for rp1200000000 cash

Reference no: EM13581208

Sam's Structures desires to buy a new crane and accessories to help move and install modular buildings. The machine sells for $750,000 and requires working capital of $100,000. Its estimated useful life is six years and it will have a salvage value of $175,600. Recovery of working capital will be $100,000 at the end of its useful life. Annual cash savings from the purchase of the machine will be $200,000.

You are required to:

a. Compute the net present value at a 12% required rate of return.

b. Compute the internal rate of return.

c. Determine the payback period of the investment

Problem 2 Statement of Cash Flows

The financial statements of Prosperous Company appear below. All are in thousand Rupiahs. You are also provided with the following additional data:

1. Dividends declared and paid were Rp1.400.000.000

2. The number of common stock outstanding is 1,000,000 shares.

3. During the year, equipment was sold for Rp1.200.000.000 cash. This equipment cost Rp2.800.000.000 originally and had a book value of Rp1.200.000.000 at the time of sale.

4. All depreciation expense is in the selling expense category.

5. All sales and purchases are on account.

6. Accounts payable pertain to merchandise suppliers.

7. All operating expenses except for depreciation were paid in cash.

Reference no: EM13581208

Questions Cloud

Heather owns a two-story building the building is used 40 : heather owns a two-story building. the building is used 40 for business use and 60 for personal use. during 2013 a fire

Journalize the entry to record the standard direct : journalize the entry to record the standard direct materials used in production. if required round your answers to two

Norman concrete company pours concrete slabs for : norman concrete company pours concrete slabs for single-family dwellings. wayne construction company which operates

The customer would like some modifications made to product : holtrop corporation has received a request for a special order of 9000 units of product z74 for 46.50 each. the normal

During the year equipment was sold for rp1200000000 cash : sams structures desires to buy a new crane and accessories to help move and install modular buildings. the machine

My company sells household cleaning products the research : my company sells household cleaning products. the research department has developed a new cleaner for which a standard

The bonds pay semiannual interest on may 1 and november 1 : lance co. purchased 24000 of 8 15-year bergen county bonds on july 12 2012 directly from the county at par value. the

Flagstaff inc uses standard costing for its one product : flagstaff inc. uses standard costing for its one product baseball bats. the standards call for 3 board-feet of wood at

Assuming a statement of cash flows is prepared using the : assuming a statement of cash flows is prepared using the indirect method indicate the reporting of the transactions and

User Account

All Pages