Solution-Would granite company accept the project

Would granite company accept the project

Assignment Help Accounting Basics

Reference no: EM132687915

Granite Company has accepted a proposal only if the payback period is less than 50 percent of the asset's useful life. Peggy Casteel is the new accounting manager. She suggested to management that capital budgeting decisions should not be made based solely on the payback perlod. Granite Company is currently considering purchasing a new machine for the factory that would 1.4 cost $112,000 and would be sold after 8 years for $50,000. The new machine will generate annual cash flows of $30,000 In Its first points year of use, $24.000 in its second year of use, $20,000 In the third year, and $14,800 each year thereafter. The company's cost of capital Is 12 percent.

Problem 1: Calculate the payback period.

Problem 2: Would Granite Company accept this project based solely on the payback period

Reference no: EM132687915

Questions Cloud

What a primary purpose of using a standard cost system is : In a standard cost system, Work in Process Inventory is ordinarily debited with? What A primary purpose of using a standard cost system is

Discuss the alternatives that face : Discuss the alternatives that you face, the related ethical and real implications, and, in your opinion, your preferred course of action.

What concept does the action describe : Would you as the auditor of F&C regard the scenario, as whole, differently if a regular employee knew of the irregularities instead of one of the key individual

Identify key responsibilities associated with professional : Identify the key responsibilities associated with the professional role of Craig Schuster (CFO). Briefly describe the type and extent of interaction Craig

Would granite company accept the project : Granite Company has accepted a proposal only if the payback period. Would Granite Company accept this project based solely on the payback period

Explain the potential impact of audit risk on company : Explain the potential impact of audit risk on company financial statement and detail the auditing procedures to verify the account balances impacted by the risk

Find how many sweatshirts would hooper need to sell to earn : Find How many sweatshirts would Hooper need to sell to earn a target profit of $10,500? (Round your final answer to the nearest whole number.)

How the built in loss exception works : How the built in loss exception works in regards to liquidating distributions. Be thorough in your explanation and provide an example to illustrate analysis

Write the journal entry to record carbae ltd share buyback : As of 30 June 2019,Carbae Ltd buys back the shares for a price of $0.75 per share. Write the journal entry to record Carbae Ltd's share buyback

User Account

All Pages

Would granite company accept the project

Reference no: EM132687915

Reference no: EM132687915

Questions Cloud

Reviews

Write a Review

Accounting Basics Questions & Answers

How much control does fed have over this longer real rate

Coures:- fundamental accounting principles

Accounting problems

Theory of interest - term structure of interest rates

Write a report on internal controls

Prepare the bank reconciliation for company

Cost-benefit analysis

Theory of interest

Liquidity and profitability

What is the expected risk premium on the portfolio

Simple interest and compound interest

Capm and venture capital

Assured A++ Grade

Academics

Major Subjects

Majors

Get In Touch

TERMS & POLICIES

HELP & SUPPORT