The project exceeds desired rate of return used to calculate

Assignment Help Accounting Basics
Reference no: EM131775775

Brunette Company is contemplating investing in a new piece of manufacturing machinery. The amount to be invested is $180,000. The present value of the future cash flows generated by the project is $163,000. Should they invest in this project?

a) yes, because the rate of return on the project exceeds the desired rate of return used to calculate the present value of the future cash flows

b) no, because the rate of return on the project is less than the desired rate of return used to calculate the present value of the future cash flows

c) no, because net present value is +$17,000

d) yes, because the rate of return on the project is equal to the desired rate of return used to calculate the present value of the future cash flows

Reference no: EM131775775

Questions Cloud

Why have unions lost power : Why have unions lost power? Do you think laws should be passed to provide more power to labor unions? Why or why not?
How many paths are there through this network : Below are the project steps for the creation of a television advertisement for Foolio. How many paths are there through this network? How many critical paths ar
How would a recession impact the federal budget : Assume that political instability around the world causes American business firms to decrease business investment signaling the start of a recession.
Determine the system time constant : A pneumatic system defined by a resistance Rg and capacitance Cg is subjected to a ramp input pressure pi(t) = Pit, where Pi is a constant.
The project exceeds desired rate of return used to calculate : the project exceeds the desired rate of return used to calculate the present value of the future cash flows
Find transfer function corresponding to indoor temperatures : Find the transfer function corresponding to the indoor and outdoor temperatures i1 and i2 assuming that i2 > i1.
Find the z-parameters of the two-port network : Find the z-parameters of the two-port network - Calculate the insertion loss of the T-network and Determine the phase change, ßl, that occurs down the line
Visuals are vital part of marketing communications materials : Describe two ways of identifying, defining a product’s personality. Visuals are a vital part of your marketing communications materials.
Compute the depreciation cost per unit : Younger Bus Lines uses the units-of-activity method in depreciating its buses. Compute the depreciation cost per unit

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.

  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!

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