Eld company is considering a long-term capital investment

Reference no: EM13592599

Eld Company is considering a long-term capital investment project in laser equip- ment. This will require an investment of $280,000, and it will have a useful life of 5 years. Annual net income is expected to be $16,000 a year. Depreciation is computed by the straight-line method with no salvage value. The company's cost of capital is 10%. (Hint: Assume cash ?ows can be computed by adding back depreciation expense.) Instructions (Round all computations to two decimal places.)(a) Compute the cash payback period for the project. (Round to two decimals.) (b) Compute the net present value for the project. (Round to nearest dollar.)(c) Compute the annual rate of return for the project. (d) Should the project be accepted? Why?

Reference no: EM13592599

Questions Cloud

In 2005 wessex inc had 50 employees each employee earned 10 : at january in 2005 wessex inc. had 50 employees. each employee earned 10 days of vacation pay. the actual rate for

Your client is alls fair appliance company an appliance : assertions are expressed or implied representations by management that are reflected in the financial statement

Discuss in detail the healthcare applications of chemical : discuss in detail the healthcare applications of chemical reactions. which chemical reactions would you consider to be

To estimate the percentage of all-trans-lycopene present : to estimate the percentage of all-trans-lycopene present in the original tomato paste should you average the

Eld company is considering a long-term capital investment : eld company is considering a long-term capital investment project in laser equip- ment. this will require an investment

H inventory balance at cost on jan312007 is 200000 and is : eaton co. uses the retail inventory method to estimate its inventory for interim statement purposes. data relating to

Used the balance equation n2 o2-------2no to answer the : used the balance equation n2 o2-------2no to answer the following questions1.how many grams of no are formed from

The svelte jeans company produces two different types of : the svelte jeans company produces two different types of jeans. one is called the simple life and the other is called

Compute the economic value for each office worldwide what : sevilla consulting offers environmental consulting services worldwide. the managers of branch offices are rewarded for

User Account

All Pages