User Account

All Pages

Which project has a shorter payback period

Assignment Help Financial Accounting
Reference no: EM132539547

Investment 1: Delivery Truck

Acquisition Cost P570,000

Useful Life 6 years

The truck can deliver an additional 150,000 bottles of water per year. The contribution margin per bottle is P2.00. The acquisition of the new truck will cause an increase in fixed operating costs, excluding depreciation of P5 per kilometer. The truck is expected to run at 20,000 kilometers per year.

Investment 2: Bottling Machine

Acquisition Cost P450,000

Useful Life 6 years

The use of the new bottling machine would enable the company to save labor time by 20 hours per day. The labor rate per hour is P40 and there are 280 operating days in a year.

For capital investment projects, the company's minimum desired rate of return is 10%. The company pays income tax at 32% of income before tax.

Question 1: Which project has a shorter payback period?

a. Delivery Truck, by 0.87 year

b. Bottling Machine, by 0.87 year

c. Deliver Truck, by 2.55 years

d. Bottling Machine, by 3.42 years

Reference no: EM132539547

Questions Cloud

Describe john stuart mill concept of utilitarianism : Do you think that there should be equal opportunity in a just society? What would you mean by this phrase? Do you think that it is a realizable ideal?
What are the four different types of market structures : What are the four different types of market structures? In two or more sentences provide at least 3 or more characteristics that separate a perfectly.
Common labor union issues : What are the common labor union issues for nursing staff in an acute care organization? How can these issues be addressed by HRM?
What ideals and consequences are at stake : Analyze the following questions associated with your chosen article and discuss them using concepts you learned in this course. What ideals, effects.
Which project has a shorter payback period : Which project has a shorter payback period? The truck can deliver an additional 150,000 bottles of water per year. The contribution margin per bottle
How might the changes impact your business : What are some of the changes we can expect related to the transportation industry in the future? How might these changes impact your business?
Outputs derived from a business policy : With one (1) example each, state and explain five (5) outputs derived from a business policy
What are principal differences between financial statements : What are the principal differences between the financial statements of the governmental unit's general fund and the financial statements of a business
What is the firm eps given that it pays tax : What is the firm's EPS, given that it pays tax at 30%? Decillion Technologies has 60 million shares outstanding and pays interest of $75 million per year.

Reviews

Write a Review

Financial Accounting Questions & Answers

  Financial statement analysis and preparation

Financial Statement Analysis and Preparation

  Shareholder of a company

Describe the ways that a person can become a shareholder of a company. Why Wal-Mart would split its stock?

  Financial and accounting principles

An understanding of financial and accounting principles can be a valuable tool for managers. While not all managers will find themselves calculating financial ratios or preparing annual financial data.

  Prepare a statement of cash flow using the direct method

Prepare a Statement of Cash Flow using the Direct Method and Prepare the Operations section of the Statement of Cash Flow using the Indirect Method.

  Financial accounting assignment

This assignment has one case study and two question apart from case study. Questions related to document Liquidation question and Company financial statements question - Torquay Limited

  Prepare general journal entries for goela

Prepare general journal entries for Goela Ltd

  Principles of financial accounting

Prepare the journal entry to record the acquisition of the assets.

  Prepare general journal entries to record the transactions

Prepare general journal entries to record the transactions, assuming use of the periodic inventory system

  Global reporting initiative

Compare the view espoused by the economist Milton Friedman about the social responsibilities of business with the views express by Stigler.

  Explain the iasb conceptual frameworks

Explain the IASB Conceptual Framework's perspective of users and their decisions.

  Determine the company''s financial statements

T he focus of the report is to determine the extent to which you are comfortable relying on the financial statements as presented by management .

  Computation of free cash flow

Computation of Free Cash Flow

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd