Giraldi company has identified that the cost of a new

Assignment Help Accounting Basics

Reference no: EM13581602

1 Net annual cash flow can be estimated by

adding advertising expense to net income.
deducting credit purchases from net income.
deducting credit sales from net income.
adding depreciation expense to net income.

2 Giraldi Company has identified that the cost of a new computer will be $48,000, but with the use of the new computer, net income will increase by $5,000 a year. If depreciation expense is $3,000 a year, the cash payback period is:

16.0 years.
9.6 years.
6.0 years.
24.0 years.

3 A project has annual income exclusive of depreciation of $80,000. The annual rate of return is 15% and annual depreciation is $20,000. There is no salvage value. The internal rate of return is 12%. The initial cost of the project was

$1,000,000.
$800,000.
$400,000.
$500,000.

4 Garza Company is considering buying equipment for $320,000 with a useful life of five years and an estimated salvage value of $16,000. If annual expected income is $28,000, the denominator in computing the annual rate of return is

$320,000.
$168,000.
$336,000.
$160,000.

Reference no: EM13581602

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