Pay back the initial project investment

Assignment Help Financial Accounting

Reference no: EM131259500

Your company has the opportunity to invest $75,000 in a new project opportunity but due to cash flow concerns, your boss wants to know when you can pay back the original investment. Using the discounted payback method, you determine that the project should generate inflows of $30,000, $30,000, $25,000, $25,000, and $20,000, respectively, for an expected five years after completion of the project. Your firm’s required rate of return is 12.5%. Calculate how long it should take to pay back the initial project investment.

Reference no: EM131259500

Questions Cloud

What are the potential ethical implications of transactions : Bobby’s Bagels, a publicly traded corporation whose common stock is listed on a stock exchange, just landed a contract to open 100 new stores in shopping malls across the country. The new business should triple the company’s profits. What are the pot..

Current years charitable contribution deduction : Jorge contributes $35,000to his church and 100 share of XYZ stock to the American Red Cross. The shares were purchased three years ago for $10,000 but were worth $ 18,000 as of the donation date. Jorge's AGI this year is $100,00. Assuming no election..

Journalize in single entry interest expense : How much was Amazon’s long-term debt at December 31, 2009? Of this amount, how much was due within one year? How much was payable beyond one year in the future? Journalize in a single entry Amazon’s interest expense for 2009. Amazon paid cash of $32 ..

Balance sheet and statement of cash flows : Bower Consulting Company started the period with cash of $25,000, common stock of $13,000, and retained earnings of $12,000. Bower engaged in the following transactions in 2016: An inventory of supplies showed $250 of supplies on hand as of December ..

Pay back the initial project investment : Your company has the opportunity to invest $75,000 in a new project opportunity but due to cash flow concerns, your boss wants to know when you can pay back the original investment. Calculate how long it should take to pay back the initial project in..

What price per unit would have been charged to the customer : Job 412 was one of the many jobs started and completed during the year. The job required $9,000 in direct materials and 40 hours of direct labor time at a total direct labor cost of $9,900. If the job contained four units and the company billed at 60..

Compute garys tax due or refund due : During 2016, Gary earned $57,000 as an executive. Gary, who is single, supported his half sister, who lives in a nursing home. Gary received the following interest: $400 on City of Los Angeles bonds, $200 on a money market account, and $2,100 on a lo..

Suppose team is organized as pass-through firm : Suppose a team is organized as a pass-through firm. Further, suppose that there are not physical depreciation or roster depreciation or long-term obligation. the tax rates on both are team and the owner's personal income are 33 percent. explain why t..

User Account

All Pages