User Account

All Pages

How long is the payback period for this project

Assignment Help Accounting Basics
Reference no: EM132706247

Question - Sri Coffee Pty Ltd is considering investing in a new coffee bean roasting machine. The machine is estimated to cost $150,000 which can last for 7 years before it becomes too costly to maintain and can be sold for scrap at $15,000. The project is estimated to bring in additional $30,000 cash inflow and incur $10,000 in additional expenses related to the running the machine in the first year. The company expects there will be an annual sales growth of 5% from year 2 onward. Expenses are also expected to grow by 2% annually from the second year of the operation.

The company plans to fund the purchase of the new machine using a bank loan with an interest rate of 13%.

Required -

1. How long is the payback period for this project?

2. What is the NPV for this project?

3. What is the IRR for this project?

Reference no: EM132706247

Questions Cloud

What is system and contingency approach : What is system and contingency approach?
What owners equity at the end of the year totaled : What Owners' equity at the end of the year totaled. At the beginning of the fiscal year, the balance sheet showed assets of $1,364 and owners' equity of $836.
Calculate the company accounts receivable turnover ratio : Andrew Peller Limited, Calculate the company's accounts receivable turnover ratio and the average collection period for accounts receivable in days.
Prepare the journal entries to record sale of the produce : The fair value of the apple trees at 30 June 2018 was $580 000 and, at 30 June 2019, $650 000. Prepare the journal entries to record sale of the produce
How long is the payback period for this project : The company plans to fund the purchase of the new machine using a bank loan with an interest rate of 13%. How long is the payback period for this project
Construct framework for integrated strategic marketing plan : Construct the framework for an integrated strategic marketing plan as it relates to an organisation operating in the chosen sector of the economy
Find what the receivables turnover was : The Accounts Receivable balances at the beginning and end of the year were P600,000 and P700,000, respectively. What The receivables turnover was
What is the journal entry to record the receipt of cash : The magazines will be delivered on the 1st of each month, starting April 1. What is the journal entry to record the receipt of cash from the customer
What should be balance in allowance for doubtful accounts : Seven Seas Company's estimated period-end uncollectible accounts are $45,000. What should be the balance in the allowance for doubtful accounts after adjustment

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Theory of interest - term structure of interest rates

Term Structure of Interest Rates

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd