The two projects yield the following predicted annual result

Assignment Help Corporate Finance
Reference no: EM13905877

Aikman Company has an opportunity to invest in one of two projects. Project A requires a $ 240,000 investment for new machinery with a four  year life and no salvage value. Project B also requires a $ 240,000 investment for new machinery with a three year life and no salvage value. The two projects yield the following predicted annual results. The company uses straight line depreciation, and cash flows occur evenly throughout each year.

28_267-B-C-F-C-B (1499).png

Required: 

1. Compute each project's annual expected net cash flows. (Round net cash flows to the nearest dollar.) 

2. Determine each project's payback period. (Round the payback period to two decimals.) 

3. Compute each project's accounting rate of return. (Round the percentage return to one decimal.) 

4. Determine each project's net present value using 8% as the discount rate. For part 4 only, assume that cash flows occur at each year   end. (Round net present values to the nearest dollar.) Analysis Component: 

5. Identify the project you would recommend to management and explain yourchoice.

 

 

Reference no: EM13905877

Questions Cloud

How many different ways can this be done : A baseball pitcher has only three pitches: a fast ball, a curve ball, and a knuckle ball. How many different ways can this be done
What is the best estimate of the uncertainty in any single : What is the best estimate of the uncertainty in any single one of the distance measurements?
Calculate the cost of carrying additional luggage : The application used to calculate the cost of carrying additional luggage results in erroneous amount, if the weight of the luggage is a fractional number. Help the development team modify the code snippet so that the cost of carrying additional lu..
Explain the controversial question : Explanation of problem, question, conflict, or issue:1. Explain the controversial question and explain why it is controversial.2. Describe the different viewpoints within the controversy. Explain why each creates questions that must be addressed.
The two projects yield the following predicted annual result : Aikman Company has an opportunity to invest in one of two projects. Project A requires a $ 240,000 investment for new machinery with a four  year life and no salvage value.
Requirements given in the problem statement : Develop the code that meets the requirements given in the problem statement. Use the concept of access specifiers while developing the code.
Determine the force f necessary to support the 500-lb weight : A piston (1) as shown in the figure has a diameter of 0.25 inches, and piston (2) has a diameter of 1.5 inches. In the absence of friction, determine the force F necessary to support the 500-lb weight.
Describing the average shape and spread of the data : What are the appropriate measure(s) to use in describing the average, shape, and spread of the data according to the scale of measurement for the data (nominal, ordinal, interval/ratio)
Customer details file in the configuration file : Display a message to the user to specify the path of the file in which the customer details are to be stored. Create the customer details file at the user-defined location. Create a configuration file and store the path of the customer details file i..

Reviews

Write a Review

Corporate Finance Questions & Answers

  Impact of the global economic crisis on business environment

This paper reviews the article of ‘the impact of the global economic crisis on the business environment' that is written by Roman & Sargu (2011).

  Explain the short and the long-run effects on real output

Explain the short and the long-run effects on real output, price, and unemployment

  Examine the requirements for measuring assets

Examine the needs for measuring assets at fair value in accounting standards

  Financial analysis report driven by rigorous ratio analysis

Financial analysis report driven by rigorous ratio analysis

  Calculate the value of the merged company

Calculate the value of the merged company, the gains (losses) to each group of shareholders, NPV of the deal under different payment methods. Synergy remains the same regardless of payment method.

  Stock market project

Select five companies for the purpose of tracking the stock market, preparing research on the companies, and preparing company reports.

  Write paper on financial analysis and business analysis

Write paper on financial analysis and business analysis

  Intermediate finance

Presence of the taxes increase or decrease the value of the firm

  Average price-earnings ratio

What is the value per share of the company's stock

  Determine the financial consequences

Show by calculation the net present value for the three alternatives (no education, network design certification, mba). Also, according to NPV suggest which alternative you advise your friend to choose

  Prepare a spread sheet model

Prepare a spread sheet model for the client that determines NPV/IRR with and without tax.

  Principles and tools for financial decision-making

Principles and tools for financial decision-making. Analyse the concept of corporate capital structure and compute cost of 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