Financially acceptable investment

Assignment Help Accounting Basics

Reference no: EM13135234

Highpoint, Inc., is considering investing in automated equipment with a ten-year useful life. Managers at Highpoint have estimated the cash flows associated with the tangible costs and benefits of automation, but have been unable to estimate the cash flows associated with the intangible benefits. Using the company's 10% discount rate, the net present value of the cash flows associated with just the tangible costs and benefits is a negative $184,350. How large would the annual net cash inflows from the intangible benefits have to be to make this a financially acceptable investment?

A. $18,435

B. $30,000

C. $35,000

D. $37,236

Reference no: EM13135234

Questions Cloud

What amount of the acquired earnings and profits deficit : What amount of the acquired earnings and profits deficit of $30,000 can be used to offset Shipyard's current earnings and profits for 2011?"

Calculate the variable costs, fixed costs : XYZ Company incurred the following costs for the month of August when it observed an activity level of 10,000 units.

How much travel costs can jackson deduct per year : Jamison owns a cabin in Mammoth and travels there for maintenance three times a year. The round trip to Mammoth from San Diego where Jamison lives, is approximately 450 miles. How much travel costs can Jackson deduct per year related to his renta..

Diameter sphere is embedded in insulation : A 4 m diameter sphere is embedded in insulation. The sphere contains a liquid-ice mixture maintained at 0 deg C. The ambient temperature surrounding the insulation is 25 deg C.

Financially acceptable investment : How large would the annual net cash inflows from the intangible benefits have to be to make this a financially acceptable investment?

Find an estimated life of ten years : Brave Industries is considering buying a machine for $180,000 with an estimated life of ten years and no salvage value. The straight-line method of depreciation will be used. The machine is expected to generate net income of $12,000 each year. The..

Which internal control principle is being violated : Joe Jones has been a trusted employee for over 10 years. He is responsible for ordering merchandise inventory, receiving the inventory items, and authorizing the payment for these items. Which internal control principle, if any, is being violated?

Determine fourier number compare two identical steel spheres : Determine Fourier Number, Compare two identical steel spheres, except the first has a two inch diameter while the second sphere has a four inch diameter. The larger sphere will have a Fourier number approximately

Compare yourself with your past dating partner : Complete a chart comparing yourself with your current or past spouse/ dating partner on several relevant dimensions, such as educational level, attractiveness, political ideology, etc.

User Account

All Pages