Find the NPV of the project

Assignment Help Accounting Basics
Reference no: EM133061990

Question - The Canton Sundae Corporation is considering the replacement of an existing machine. The new machine, called an X-tender, would provide better sundaes, but it costs $120,000. The X-tender requires $20,000 in additional net working capital, which will be recouped at the end of the project. The machine's useful life is 10 years, after which it can be sold for a salvage value of $40,000. Straight-line depreciation will be used and the machine will be depreciated to zero over the 10-year project. The tax rate is 45% and the required return is 16%. The machine is expected to increase "sales minus costs" by $35,000 per year. What formula would you use to find the NPV of the project?

Reference no: EM133061990

Questions Cloud

Government structured analytic techniques : Which of the 12 U.S. Government (2009) Structured Analytic Techniques do you think best enable analysts to reduce cognitive and perceptual biases?
Calculate the depreciation expense on Taxi : Taxi 10 was driven 126,190 km in 2020 and 101,730 km in 2021. Cullumber has a December 31 year end. Calculate the depreciation expense on Taxi 10 for 2020
What is the journal entry to record the issuance of the bond : Cougar Corp. sold a 2-year, 5.25%, 300,000, bonds on January 1, 2021 for 280,000. What is the journal entry to record the issuance of the Bond
Texas legislature in the last legislative session : Find an Op-Ed that discusses any law enacted by the Texas Legislature in the last legislative session.
Find the NPV of the project : The machine is expected to increase "sales minus costs" by $35,000 per year. What formula would you use to find the NPV of the project
Security vs. privacy : How Do Americans Weigh Privacy Versus National Security? How Must America Balance Security and Liberty. Safety is more important than privacy
What is the breakeven point in dollar sales : A company has a selling price of $16 a unit, variable costs of $8 a unit, and fixed costs of $20,000. What is the breakeven point in dollar sales
Texas constitution limit government power : How does the Texas Constitution limit government power? Does it hamstring the Texas Government to the point that the government cannot perform effectively?
Prepare a cash inflows schedule for the third quarter : XYZ Corporation is preparing a master budget for 2020. Sales for the year are expected to total 1,200,000 units. Prepare a cash inflows schedule

Reviews

Write a Review

Accounting Basics Questions & Answers

  At what level of sales would niners corporation break even

The sales of Niners Corporation last year amounted to $20,000,000, it's variable costs. At what level of sales dollars would the Niners Corporation break even?

  Contribute the same amount to the plan

You will contribute the same amount to the plan at the end of every year that you work How much do you need to contribute each year to fund your retirement?

  Dtermine cost of goods available for sale for the company

Using the standard inventory formula and the amounts below, determine (i) the cost of goods available for sale for the company for the year

  Prepare the journal entries to record the transactions

Indigo Corporation was organized on January 1, 2017. It is authorized to issue 10,300 shares of 8%, Prepare the journal entries to record the transactions

  What functions do dss support in business organizations

What functions do DSS support in business organizations? How does a DSS differ from a TPS and an MIS?

  Flexibility in a telecom closet

All incoming wires are terminated to the back of this, because it offers the most flexibility in a telecom closet.

  Which project should the firm choose

KISC always needs conveyor belt system, when one wears out, it must be replaced. Which project should the firm choose

  What is the journal entry necessary to record

What is the journal entry necessary to record the repurchase of stock on June 30

  What amount of FICA taxes does Kyle owe for the year

During that time, he earned $44,000 of self-employment income. What amount of FICA taxes does Kyle owe for the year

  Compute pension expense and prepare the journal entry

Compute pension expense and prepare the journal entry to record pension expense and the employer's contribution to the pension plan in 2010.

  What is meant by journalize transactions

Explain what is meant by journalize transactions to develop partnership and admit new partners; and allocate profits and losses to partners

  Number of female students in class

The following table shows a list of attributes associated with 15 students in attendance on a particular day in a 600 level course o?ered at the University of Delaware. Let set A be the subset of female students and B, the subset of male students. ..

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