User Account

All Pages

How long is the payback period for this project

Assignment Help Accounting Basics
Reference no: EM132730025

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%.

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: EM132730025

Questions Cloud

Calculate the cross-over quantity for two alternatives : If it is outsourced, a supplied has offered to make it for a variable cost of $4.05 per unit. Calculate the cross-over quantity for these two alternatives.
Write a python program to hold information on a course : Write a Python program to hold information on a course. Add a method to enter teacher name and a method to enter credits. Use a try catch block to verify that.
Break-even price of the spa service : The hotel wants to break even if 54670 customers use the spa facility. What should be the break-even price of the spa service?
What is the net income for mas company : MAS Company's break-even sales are P530,000. The variable costs ratio to sales is 60%, while the net income percentage to sales is 8%. What is the net income?
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
What is the standard time in minutes per unit : The allowance factor is 8%. What is the standard time in minutes per unit?
What services are provided by the tls record protocol : List and briefly define the parameters that define a TLS session connection. What services are provided by the TLS Record Protocol?
Describe one of the most important topics in auditing : Describe one of the most important topics in auditing and explain why. Include an explanation of how to expect to apply this topic in an Accounting career.
Average time a customer spends in the shop : What is the average time (in minutes) a customer spends in the shop (wait plus service)?

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