What the net present value of the new tank is

Assignment Help Accounting Basics
Reference no: EM132698042

Pooh's Corner is a not for profit day care centre run by the parents. The centre uses tank water as it is not on the mains water. The tank water became contaminated as a number of birds died in the tank. Currently the centre is purchasing large water containers delivered weekly to provide drinking and washing water. The management committee is considering building a lager more modern water storage tank. The committee estimate that this will cost $22,500 and save the centre $3,500 annually for 10 years. The centre's required rate of return is 8 per cent. Income tax is not relevant.

Problem 1: The net present value of the new tank is:

Option 1: $28,205

Option 2: -$14,944

Option 3: $1,985

Option 4: $985

Reference no: EM132698042

Questions Cloud

Calculate Lawrence ending inventory and cost of goods sold : Lawrence owns a small candy store that sells one type of candy. Calculate Lawrence's ending inventory and cost of goods sold using the FIFO inventory valuation
Outline a strength from using transfer prices : Outline a weakness and a strength from using transfer prices. How might this have occurred and outline a potential risk from using this price
Describe strength and weakness of evapolar product : Who are the major competitors in evapolar product category? describe strength and weakness of evapolar product. describe price of evapolar product.
What is the effective interest cost : Petrol? Ibérico, a European gas? company, is borrowing ?$550,000,000 via a syndicated eurocredit for six years at 90 basis points over LIBOR. LIBOR
What the net present value of the new tank is : What the net present value of the new tank is? The centre uses tank water as it is not on the mains water. The tank water became contaminated
BIO410 Scientific Skills Assignment : BIO410 Scientific Skills Assignment Help and Solution, Solent University - Assessment Writing Service - The Obesity Epidemic - How does childhood obesity impact
Recommend for the total value of the food division : Wild Corporation is in the process of acquiring Tamed Inc. Tamed Inc. has two divisions:
Discuss the correct recognition and measurement : Discuss the correct recognition and measurement of this business combination in the consolidated financial statements of Bogart, showing calculations
What is the dollar cost of debt : The Copper Mountain? Group, a private equity firm headquartered in? Boulder, Colorado, borrows ?£4,600,000 for one year at 8.375?% interest.

Reviews

Write a Review

Accounting Basics Questions & Answers

  Prepare cogent arguments for and against david actions

Prepare cogent arguments for and against David Walker's actions as a government employee and later as a concerned citizen

  What does effect have on the statement of retained earnings

Stockholders in the amount of one million dollars (half of the net income amount), what effect does this have on the statement of retained earnings?

  Prepare a cost reconciliation report for baking department

Maria Am Corporation uses a process costing system. Prepare a cost reconciliation report for the Baking Department for June.

  Discuss the position edward is in and support the position

Is Edward wrong? Is there an ethical concern? Is Edward a savvy business person? Discuss the position Edward is in and support or defend the position

  What is the budgeted indirect cost allocation rate

Dalyrymple Company produces a special spray nozzle. The budgeted indirect total cost of inserting the spray nozzle is $80,000. The budgeted number of nozzles to be inserted is 40,000. What is the budgeted indirect cost allocation rate for this act..

  Prepare target income statement for the year ending

Prepare Target's income statement for the year ending January 28, 20Y2. Prepare Target's retained earnings statement for the year ending January 29, 20Y2

  Designing value-based service

As the rate of innovation increases, companies face expanding product/service lines, shorter product and service lifecycles, and more frequent product/service transitions. All of these can bring tremendous value but also pose enormous challenges a..

  Accounting for uncollectible accounts-allowance method

Open the Allowance for uncollectible accounts T-account, and post entries affecting that account. Keep a running balance. Show how Mountain Terrace Medical Center should report net accounts receivable on its December 31, 2012 balance sheet. Use the ..

  Submit the Profit and Loss Statement report

MYOB Case Study Assignment - Submit the following reports - Balance Sheet, Profit and Loss Statement and Cash Receipts journal

  List the five basic steps in financial analysis

List the five (5) basic steps in financial analysis. Why do you believe these steps would be important when conducting a financial analysis

  Find the best estimate of the stock price per share

If the company has 30 million shares of stock outstanding, what is the best estimate of the stock's price per share

  What are the two primary benefits of integrated reporting

What are the two primary benefits of integrated reporting? What are three ways of standardizing and securing shadow data spreadsheets within an organization

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