What estimated internal rate of return on investment is

Assignment Help Cost Accounting
Reference no: EM132838672

Olsen Inc. purchased a $600,000 machine to manufacture a specialty tap for electrical equipment. The tap is in high demand and Olsen can sell all that it could manufacture for the next 10 years. To encourage capital investments, the government exempts taxes on profits from new investments in this type of machinery. This legislation most likely will remain in effect in the foreseeable future. The equipment is expected to have 10 years of useful life and no salvage value at the end of this 10-year period. The firm uses straight-line depreciation. The net cash inflow is expected to be $144,000 each year. Olsen uses a discount rate of 10% in evaluating its capital investments.

Problem 1: The estimated internal rate of return (IRR) on this proposed investment is: (Note: the PV annuity factor from Table 2, Appendix C, 10%, 10 years is 6.145.)

Reference no: EM132838672

Questions Cloud

Prepare a tabular analysis of the september transactions : Prepare a tabular analysis of the September transactions beginning with August 31 balances. On August 31, the balance sheet of Sunland Company showed Cash
Fraud cases that involved agency conflicts : Fraud cases that involved agency conflicts. Provide the following:
What the dollar value of Ending Inventory for month of May : Sales were 424 units at $35. Using the Weighted Average method, what the dollar value of Ending Inventory for the month of May
What is the history from 1990 to the present day : What is the history from 1990 to the present day? Identify and describe (include the URLs) the three most popular B2B e-marketplaces
What estimated internal rate of return on investment is : What estimated internal rate of return (IRR) on this proposed investment is: (Note: the PV annuity factor from Table 2, Appendix C, 10%, 10 years is 6.145.)
Find appealing about haggling in stores : What characteristics of distributive bargaining make haggling in a store effective?
Compare the qualities of movement between the two versions : Who was dancing in the Hard Nut and how did that differ from Balanchine's version? Compare the qualities of movement between the two versions.
Find What is Stancorp pre-tax cost of debt : The debt has semi-annual coupons, with the next coupon is due in six months. If Stancorp faces a 30% tax? rate, what is its after-tax cost of debt?
Advantage of using internal sources of finance : Explain one advantage of using external sources of finance and identify two external sources.

Reviews

Write a Review

Cost Accounting Questions & Answers

  Weighted-average unit contribution margin

Sales mix remains constant, the total number of units that Jamal must sell to break even and number of units of Plain that Jamal must sell to break even

  Determine what is the equivalent units of production used

Determine What is the equivalent units of production used to compute unit conversion cost on the cost of production report for Department W

  Classify the preceding costs as either fixed and variable

Hand-Made Furniture Company manufactures sofas for distribution to several major retail chains and insurance premiums on property, plant, and equipment, $25,000 per year plus $25 per $25,000 of insured value over $16,000,00

  Explain the importance of evaluating performance

Explain the importance of evaluating performance and describe how it impacts motivation, goal congruence, and employee effort. Provide the example.

  Calculate the number and the dollar value of walking shoes

Calculate the number and the dollar value of walking shoes in ending finished goods inventory. Prepare a cost of goods sold statement. Prepare an absorption-costing income statement.

  Which selection tools is used primarily for verifying

Which selection tools is used primarily for verifying information provided by job applicants?application forms./ applicant interviews

  What is the breakeven point in both sales dollars

What is the breakeven point in both sales dollars and units for Orange Crush Sports? What is the margin of safety?

  Evaluate a performance report for the vice president

Prepare and evaluate a performance report for the vice president. Other costs for the vice president are assumed to be: budgeted $35,000 and actual $34,400.

  What is size of the semi-annual interet payment for bonds

How many semi-annual interest payments will be paid on these bonds over their life? What is the size of the semi-annual interet payment for these bonds?

  How much would be allocated to meats

Family Supermarkets currently uses a single-driver system to allocate period costs to its product lines. The single driver that is used is the Cost of Goods Sold for each product line. Using this system, compute the allocation to Packaged Foods.

  Prepare an income statement in good form

Prepare an income statement in good form. What if Jean and Tom increased the price to $50 per cleaning and no other information was affected? Explain which line items in the income statement would be affected and how.

  How would the selling price of the bonds be evaluated

How would the selling price of the bonds be evaluated

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