What would be the total annual cash inflows associated with

Assignment Help Finance Basics
Reference no: EM13571975

Pisa Pizza Parlor is investigating the purchase of a new $45,000 delivery truck that would contain specially designed warming racks. The new truck would have a six-year useful life. It would save $5,400 per year over the present method of delivering pizzas. In addition, it would result in the sale of 1,800 more pizzas each year. The company realizes a contribution margin of $2 per pizza.

Required:

(Ignore income taxes.)

1. What would be the total annual cash inflows associated with the new truck for capital budgeting purposes?

2. Find the internal rate of return promised by the new truck to the nearest whole percent.

3. In addition to the data above, assume that due to the unique warming racks, the truck will have a $13,000 salvage value at the end of six years. Under these conditions, compute the internal rate of return to the nearest whole percent.

Reference no: EM13571975

Questions Cloud

Excel learning systems inc was organized on may 31 2010 : excel learning systems inc. was organized on may 31 2010. projected selling and administrative expenses for each of the
Straight forward net present value and payback : straight forward net present value and payback computations.the calgary eskimos play in the canadian hockey league.
The total factory overhead for big light company is : the total factory overhead for big light company is budgeted for the year at 403750. big light manufactures two
At december 31 2012 trafalgar corporation had a defined : 1. zephyr plc amends its defined pension plan on january 1 2012 resulting in pound420000 of past service cost. the
What would be the total annual cash inflows associated with : pisa pizza parlor is investigating the purchase of a new 45000 delivery truck that would contain specially designed
The phoenix kings of the united basketball league have a : the phoenix kings of the united basketball league have a moody center by the name of orlando dawkins. dawkins is under
Prepare a paper to document your analysis has it assess the : prepare a paper to document your analysis has it assess the future challenges and opportunities for emergency
The following data are for the month of january for the : the following data are for the month of january for the soloway company. assume the cost driver is the number of units
How an organization can use organizational commitment to : how an organization can use organizational commitment to positively impact job satisfaction. support your reading 300

Reviews

Write a Review

Finance Basics Questions & Answers

  Financial reporting and analysis

Finance is about Gunns Ltd, a company in dealing with forestry products in Australia. The company has also been listed in Australian Stock Exchange. As many companies producing forestry products, even Gunns Ltd is facing various problems. Due to the ..

  A report on financial accounting

This report is specific for a core understanding for Financial Accounting and its relevant factors.

  Describe the types of financial ratios

Describe the types of financial ratios and other financial performance measures that are used during venture's successful life cycle.

  Differences between sole proprietorship and corporation

Briefly describe the major differences between a sole proprietorship and a corporation

  Prepare a cash budget statement

Calculate the expected value of the apartment in 20 years' time. What is the mortgage loan repayment at the beginning of each month

  What are the implied interest rates

What are the implied interest rates in Europe and the U.S.?

  State pricing theory and no-arbitrage pricing theory

State pricing theory and no-arbitrage pricing theory

  Small business administration

Identify the likely stage for each venture and describe the type of financing each venture is likely to be seeking and identify potential sources for that financing.

  Effect of financial leverage

The Effect of Financial Leverage and working capital management

  Evaluate the basis for the payment to the lender

Evaluate the basis for the payment to the lender and basis for the payment to the company-counterparty.

  Importance of opps, ipps, mpfs and dmepos

Research and discuss the differences and importance of : OPPS, IPPS, MPFS and DMEPOS.

  Time value of money

Time Value of Money project

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