What would be the net present value

Assignment Help Financial Accounting
Reference no: EM132492575

Point 1: Michaels, Inc., purchased a machine for $75,000. The machine has a useful life of five years and no salvage value. Straight-line depreciation is to be used. The machine is expected to generate cash flow from operations, net of income taxes, of $30,000 in each of the five years. Michaels' expected rate of return is 10%. Information on present value factors is as follows:

PeriodPresent value of $1 at 10%Present value of ordinary annuity of $1 at 10%

10.909090.909092

0.826451.735543

0.751322.486854

0.683013.169865

0.620923.79079

Question 1: What would be the net present value?

Select one:

a. $113,724

b. $38,724

c. $284,318

d. $93,138

Reference no: EM132492575

Questions Cloud

Calculate the amount of Subpart F income : Wolf, Inc.'s Subpart F income for the current tax year is $1,100,000, the Current E&P is $3,100,000, Calculate the amount of Subpart F income
What is the npv of projects x and y at discount rates : What is the NPV of Projects X and Y at discount rates of 0 percent, 15 percent, and 25 percent? (A negative answer should be indicated by a minus sign)
What is humanitarian intervention : What is humanitarian intervention? Theoretically, when and where there are governments that cannot protect their own people, the international community
Prepare the adjusting journal entry for bad debt expense : If allowance for doubtful accounts had a debit balance of $827 instead of a credit balance of $2,903, prepare the adjusting journal entry for bad debt expense
What would be the net present value : What would be the net present value? Michaels, Inc., purchased a machine for $75,000. The machine has a useful life of five years
Prepare the Balance Sheet for the fiscal year : Retained Earnings- credit 101,145 and Depreciation Expense- debit 145,840. Use this information to prepare the Balance Sheet for the fiscal year
What is the equivalent annual cost of owning : What is the equivalent annual cost of owning and operating the truck?
Prepare the journal entry to record the issuance of the bond : On January 2, 2019, Lindsay Corporation issued $800,000 of 8% convertible. Prepare the journal entry to record the issuance of the bonds.
Interest rate compounding yearly : How much do you need to deposit yearly with 10% interest rate compounding yearly next 18 years to cover her education cost?

Reviews

Write a Review

Financial Accounting Questions & Answers

  What are jumbos total cash disbursements

Jumbo, Inc. had sales of $8,000 in November, $14,000 in December, and projects sales of $10,000 in January, $12,000 in February, and $8,000 in March. The firm's COGS in any given month is equal to 70 percent of the next month's sales. What are Jumbo'..

  Actual amounts paid out as a result of warranty claims

Buffalo Inc reported sales revenue for 2017 and $906,000 their products are sold within nine months warranty .Members of Buffalos management estimate that the cost of the warranty will equal up to 6% of sales revenue entry to record the actual amount..

  What is the overall tax rate on crocker and companys pre-tax

Crocker and Company (CC) is a C corporation. For the year, CC reported taxable income of $566,500. At the end of the year, CC distributed all its after-tax.

  Evaluate the earnings per share of common stock

Evaluate the earnings per share of common stock under each of the two plans, suppose income before bond interest and income tax is $600,000.

  Determine how explore the valuation of common stock

Determine how Explore the Valuation of Common Stock. How to Determine how diversification is important in the formation of the CAPM.

  What was bala industries cash flow from financing

Using the information what was Bala Industries' Cash Flow from Financing for the year ending 6/30/2011? Round to the nearest cent.

  Tax drill-deferred taxes

Ovate, Inc., earns $140,000 in book income before tax and is subject to a 35% marginal Federal income tax rate. Ovate's records a single temporary difference. Warranty expenses deducted for book purposes are $8,000 of which only $2,000 are deductible..

  Describe the value and non value added in the activities of

describe the value and non value added in the activities of insurance business.prince insurance company is reviewing

  Preparing companys leading antibiotic drug-basic wage rate

Helena Montana is employed by Northern Laboratories and is directly involved in preparing the company's leading antibiotic drug. Helena's basic wage rate is $22 per hour. The company pays its employees time and a half (i.e. 150%) for any work in exce..

  What is the price paid to the bondholder

What is the price paid to the bondholderif the issuer calls the bond? A 6.50 percent corporate coupon bond is callable in ten years for a call premium

  How much should be in firm interest payable account

Martin & Associates borrowed $5,000 on April 1, 2010 at 8% interest with both principal and interest due on March 31, 2011 How much should be in the firm's interest payable account at December 31, 2010?

  Time value of money calculations

1. A deposit of $7,000 is made on January 1, 2014. The deposit will earn interest at a rate of 8%. How much will be accumulated on January 1, 2019, assuming that interest is com- pounded (a) annually, (b) semiannually, and (c) quarterly?

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