User Account

All Pages

Solve net present value and profitability index of machine

Assignment Help Accounting Basics
Reference no: EM132708884

BAK Corp. is considering purchasing one of two new diagnostic machines. Either machine would make it possible for the company to bid on jobs that it currently isn't equipped to do. Estimates regarding each machine are provided here.

                                                     Machine A                 Machine B

Original cost                              $75,500                $180,000

Estimated life                                 8 years              8 years

Salvage value                                     -0-                 -0-

Estimated annual cash inflows             $20,000           $ 40,000

Estimated annual cash outflows             $5,000            $ 10,000

Instructions

Problem 1: Calculate the net present value and profitability index of each machine. Assume a 9% discount rate. Which machine should be purchased?

Problem 2: Determine internal rate of return.

Reference no: EM132708884

Questions Cloud

What amount of interest revenue should included in sunland : The present value of $1 at 9% for three periods is 0.77. What amount of interest revenue should be included in Sunland's 2021 income statement?
Establish a detailed hr strategies to assist an organization : As an HR Professional, can you establish a detailed HR strategies to assist an organization to transform the human resource function to a strategic business.
Discuss the job responsibilities for a compliance officer : Discuss the job responsibilities for a compliance officer in the HIM department of a hospital versus the compliance officer in a smaller physician's office.
Find cash payback period and net present value : Does the project meet the company's cash payback criteria? Does it meet the net present value criteria for acceptance? Discuss your results.
Solve net present value and profitability index of machine : Solve the net present value and profitability index of each machine. Assume a 9% discount rate. Which machine should be purchased?
Determine what is the present value of a cash flow stream : Determine What is the present value of a cash flow stream of $1,000 per year annually for 20 years that then grows at 4.0 percent per year forever
MAN132 International Management In Context Assignment : MAN132 International Management In Context Assignment Help and Solution, Solent University - Assessment Writing Service - Critically discuss how external
What is the net cash used in financing activities : Soo Kwang Co. provided the data for the preparation. What is the net cash used in financing activities? What is the net cash provided by operating activities?
What should be the net cash provided by operating activities : What should be the net cash provided by operating activities in the statement of cash flows for the year ended December 31, 2021?

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