What is the npv for the project for tea life pty ltd

Assignment Help Accounting Basics
Reference no: EM132725752

Tea Life Pty Ltd is considering investing in a new tea dryer machine. The machine is estimated to cost $100,000 which can last for 7 years before it becomes too costly to maintain and can be sold for scrap at $15,000. The project is estimated to bring in additional $30,000 cash inflow and incur $10,000 in additional expenses related to the running the machine in the first year. The company expects there will be an annual sales growth of 5% from year 2 onward. Expenses are also expected to grow by 2% annually from the second year of the operation.
The company plans to fund the purchase of the new machine using a bank loan with an interest rate of 10%.

Problem 1:
How long is the payback period for this project? years. Case sensitive. Type in 7.00 (two decimal places) for 7 years.

Problem 2: What is the NPV for this project? $. Case sensitive. Type in 120,000.00 (two decimal places) for $120,000.00, or -120,000.00 for negative $120,000.00.

Problem 3:
What is the IRR for this project? %. Case sensitive. Type in 20.00 (two decimal places) for 20%.

Reference no: EM132725752

Questions Cloud

What is the reported net worth of shareholders : It has $3 million in current liabilities, $2 million in long-termvdebt, and $1 million in preferred stock. What is the reported net worth of shareholders
Person-organization fit or person-job fit : When hiring an employee, which do you believe is more important: person-organization fit or person-job fit?
Find how much does advantage tennis coaching receive : Nicholas arranges with his bank for funds to finance net working capital during period. He requires 180-day. How much does Advantage Tennis Coaching receive?
What is its ebitda : Now suppose a firm has the following information: $7 million in sales, $4 million of costs of goods sold, What is its EBITDA
What is the npv for the project for tea life pty ltd : Find What is the NPV for this project? $. Case sensitive. Type in 120,000.00 (two decimal places) for $120,000.00, or -120,000.00 for negative $120,000.00.
What is its resulting retained earnings balance : In the current year, its net income is $2.5 million. If it pays $1 million in common dividends in the current year, what is resulting retained earnings balance
Compute the depreciation expense under units-of-activity : Compute the depreciation expense under Units-of-activity for 2022, assuming machine usage was 1,800 hours methods for the year indicated.
What impact does this have on net cash : A firm has inventories of $2 million for the previous year and $1.5 million for the current year. What impact does this have on net cash provided by operations
Which of the statements is most accurate : Which of the following statements is most accurate? Discounted Cash Flow analysis models provide conclusions associated with Fair Value Hierarchy Level 1 inputs

Reviews

Write a Review

Accounting Basics Questions & Answers

  Discuss straight-line method of depreciation

The company is considering replacing part of the current manual labour force by purchasing a small tractor with a forklift for use in loading bricks

  Calculate the payback period for each project

Depreciation on each project is estimated at R25 000 per year. Calculate the payback period for each project (In years, months and days)

  Prepare the production budget and sales budget

Boscoe Power Tools manufactures a wide variety of tools and accessories. Prepare the Production budget and sales budget

  Determine the true cash balance using bank reconciliation

The May 31, 2016, balance per bank statement for Upton Company was $7,200. The cash balance per books was $9,500.

  Determine the percentage of completion and the amount

For complex, high-tech contracts, how does a company determine the percentage of completion and the amount of revenue to accrue?

  Santos company currently manufactures one of its crucial

santos company currently manufactures one of its crucial parts at a cost of 4.85 per unit. this cost is based on a

  How will this note be reported on the December

Each January the company is required to pay $10,000 on the note. How will this note be reported on the December 31, 2022, balance sheet

  What is the amount of cash dividend paid

If the beginning balance of Dividend Payable at Nov 30 is 200 what is the amount of cash dividend paid in December.Of the cash dividends paid, how much related to the current period?

  What is the predetermined manufacturng overhead rate

Actual machine hours are 90,000. If Lisa Inc. allocates overhead based on direct labor hours, what is the predetermined manufacturng overhead rate

  Computing the variable cost per unit

Compute the variable cost per unit. Compute how many CDs Spears Music will have to sell in order to break even. Compute how many CDs Spears Music will have to sell in order to make a target net income of $16,200.

  Heather and terry have a mortgage on their primary residence

Heather & Terry have a mortgage on their primary residence of $750,000 and a mortgage on their vacation home of $410,000. In 2013, they incurred $46,400 of mortgage interest expense. How much, if any, of that interest is deductible on Schedule A?

  What is the amount of the income from operations

A business operated at 100% of capacity during its first month, What is the amount of the income from operations that would be reported

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