Compute the accounting rate of return for this investment; assume the company uses straight-line depreciation. The net cash flows are estimated to be $7,610 per year for the next 5 years and no salvage value is anticipated. Present value of an annuity of 1 $ $ Accounting Rate of Return Choose . copyright 2003-2023 Homework.Study.com. Compute the accounting rate of return for this investment; assume the company uses straight-line depreciation. A company is deciding to invest in a new project at a cost of $2 million dollars. Compute the accounting rate of return for this investment; assume the company uses straight-line depreciation. What are the investment's net present value and inte. (Round your computations and answers to 0 decimal p, BAP Corporation is reviewing an investment proposal. The machine will cost $1,796,000 and is expected to produce a $199,000 after-tax net income to be received at the end of each year. The investment costs $51,900 and has an estimated $10,800 salvage value. The investment costs $54,000 and has an estimated $7,200 salvage value. Capital investment - $15,000 Estimated useful life - 3 years Estimated salvage value - zero Estimated net cash inflow: -Year 1 - $7,00, Compute the net present value of each potential investment. To help in this, compute the cost of capital for the firm for the following: a. The approximate net present value of this project, The Zinger Corporation is considering an investment that has the following data: Year 1 Year 2 Year 3 Year 4 Year 5 Investment $17,500 $4,900 Cash inflow $3,900 $3,900 $10,000 $5,900 $5,900 Cash inflows occur evenly throughout the year. The present value of an annuity due for five years is 6.109. These assets contribute $28,000 to annual net income when depreciation is computed on a straight-line basis. The investment costs$45,000 and has an estimated $6,000 salvage value. A novel dynamic modeling method for a multi-product production line is developed to investigate dynamic properties of the system under random disruptions such as machine failures and market demand . The current value of the building is estimated to be $300,000. Cullumber Company is considering an investment that will return a lump sum of $942,800, 3 years from now. What is the present value, Strauss Corporation is making a $91,800 investment in equipment with a 5-year life. Assume Peng requires a 5% return on its investments. Compute the payback period. Peng Company is considering an investment expected to generate an This site is using cookies under cookie policy . Compute the net present value of this investment. Compute the net present value of this investment. Acc 212 Flashcards | Quizlet Assume Peng requires a 10% return on its investments. Peng Company is considering an investment expected to generate an average net income after taxes of $1,950 for three years. criteria in order to generate long-term competitive financial returns and . The investment costs $47,400 and has an estimated $8,400 salvage value. Yearly cash inflows = 3,300 + 16,200 = Our experts can answer your tough homework and study questions. Compute the net present value of this investment. Compute the accounting rate of return for this. Get access to this video and our entire Q&A library, How to Calculate Net Present Value: Definition, Formula & Analysis. , ided by total investment.. total investment is current assets (inventories, accounts receivables and cash) plus fixed assets. [SOLVED] Peng Company is considering an investment expected 76,000 b. investment costs $51,600 and has an estimated $10,800 salvage There is a 77 percent chance that an airline passenger will The company anticipates a yearly after-tax net income of $1,805. If the weighted average cost of capital is 10% and the cost of equity is 15%, what is the horizon value, to the ne, Management of a firm with a cost of capital of 12 percent is considering a $100,000 investment with annual cash flow of $44,524 for three years. What is the present valu, Your firm is considering a new investment proposal and would like to calculate its weighted average cost of capital. Ass, Peng Company is considering an Investment expected to generate an average net income after taxes of $3,000 for three years. Determine the net present value, and ind. A negative NPV would suggest that the project is not worth investing since it will probably yield to a loss while a positive NPV would suggest otherwise. Apex Industries expects to earn $25 million in operating profit next year. Input the cash flow values by pressing the CF button. Experts are tested by Chegg as specialists in their subject area. The cost of capital is 6%. (Get Answer) - Peng Company is considering buying a machine that will Securities Cost Fair Value Trading 120,000 124,000 Non-trading 100,000 94,000 The non-trading securities are held as long-term investments. Peng Company is considering an investment expected to generate an average net income after taxes of $1,950 for three years. The investment costs $48,600 and has an estimated $6,300 salvage value. Peng Company is considering an investment expected to generate an (FV of $1, PV of $1, FVA of $1 and PVA of $1) (Use appropriate factor(s) from the tables provided.) Solved Peng Company is considering an investment expected to - Chegg $2,000 per year for 10 years is the equivalent of $12,835 today ($2,000 6.4177) It is considering investing in a project which costs $350,000 and is expected to generate cash inflows of $140,000 at the end of each year for three years. The investment costs $56,100 and has an estimated $7,500 salvage value. Peng Company is considering an investment expected to generate an average net income after taxes of $2,500 for three years. Required information The following information applies to the questions displayed below] Peng Company is considering an investment expected to generate an average net income after taxes of $3,500 for three years. Corresponding with the IRS in writing Peng Company is considering an investment expected to generate an average net income after taxes of $2,000 for three years. It generates annual net cash inflows of $10,000 each year. The investment costs $48,900 and has an estimated $12,000 salvage value. S4 000 per year for 6 years accumulates to $29,343.60 ($4,000 7.3359). The investment costs $45,000 and has an estimated $6,000 salvage value. Compu, Lanyard Company is considering an investment that will generate $600,000 in cash inflows per year for 7-years and has $240,000 of cash outflows for the same period (before income taxes). The company uses straight-line depreciation. Assume Peng requires a 5% return on its investments. Generation planning for power companies with hybrid production A machine costs $210,000, has a $14,000 salvage value, is expected to last ten years, and will generate an after-tax income of $43,000 per year after straight-line depreciation. 200,000. The fair value. TABLE B.3 Present Value of an Annuity of 1 Rat Periods 1% 2% 4% 5% 6% 7% 5% 10% 12% 15% 0.9901 0.9804 0.9709 0.9615 0.9524 0.9434 0.9346 0.9259 0.9174 0.9091 0.8929 0.8696 1.9704 1.9416 1.9135 1.88611.8594 1.8334 8080 1.7833 1.759 .7355 16901 1.6257 2.9410 2.8839 2.8286 2.7751 2.7232 2.6730 2.6243 2.5771 2.5313 2.4869 2.4018 2.2832 3.9020 3.8077 3.7171 3.6299 3.5460 3.4651 3.3872 3.3121 3.2397 3.1699 3.0373 2.8550 3.9927 3.8897 3.7908 3.6048 3.3522 5.7955 5.6014 5.4172 5.2421 5.0757 4.9173 4.7665 4.6229 4.4859 4.3553 4.1114 3.7845 5.3893 5.2064 5.0330 4.8684 4.5638 4.1604 7.6517 7.3255 7.0197 6.73276.4632 6.2098 5.9713 5.7466 5.5348 5.3349 4.9676 4.4873 8.5660 8.1622 7.7861 7.4353 7.1078 6.8017 6.5152 6.2469 5.9952 5.7590 5.3282 4.7716 9.4713 8.9826 8.5302 8.1109 7.7217 7.3601 7.0236 6.7101 6.4177 6.1446 5.6502 5.0188 7.1390 6.8052 6.4951 5.93775.2337 11.255 10.5753 9.95409.3851 8.8633 8.3838 7.9427 7.5361 7.1607 6.8137 6.1944 5.4206 12.1337 11.3484 10.6350 9.9856 9.3936 8.8527 8.3577 7.9038 7.4869 7.1034 6.4235 5.5831 13.0037 12.1062 11.2961 10.5631 9.8986 9.2950 8.7455 8.2442 7.7862 7.3667 6.6282 5.7245 13.8651 .8493 11.9379 11.1184 10.3797 9.7122 9.1079 8.5595 8.0607 7.6061 6.8109 5.8474 14.7179 13.5777 12.5611 11.6523 10.8378 10.1059 9.4466 8.8514 8.3126 7.8237 6.9740 5.9542 15.5623 14.2919 13.1661 12.1657 11.2741 10.4773 9.7632 9.1216 8.5436 8.0216 7.1196 6.0472 16.3983 14.9920 13.7535 12.6593 11.6896 10.8276 10.0591 9.3719 8.7556 8.2014 7.2497 6.1280 17.2260 15.6785 14.3238 13.1339 12.0853 11.1581 10.3356 9.6036 8.9501 8.3649 7.3658 6.1982 18.0456 16.3514 14.8775 13.5903 12.4622 11.4699 10.5940 9.8181 9.1285 8.5136 7.4694 6.2593 22.0232 19.5235 17.4131 15.6221 14.0939 12.7834 11.6536 10.6748 9.8226 9.0770 7.8431 6.4641 25.8077 22.3965 19.6004 17.2920 5.3725 13.7648 12.4090 11.2578 10.2737 9.4269 8.0552 6.5660 29.4086 24.9986 21.4872 18.6646 16.3742 14.4982 12.9477 11.6546 10.5668 9.6442 8.1755 6.6166 32.8347 27.3555 23.1148 19.7928 17.1591 15.0463 13.3317 11.9246 10.7574 9.7791 8.2438 6.6418 4.8534 4.7135 4.57974.4518 4.3295 4.2124 4.1002 6.7282 6.4720 6.2303 6.0021 5.7864 5.5824 10.3676 9.7868 26 8.7605 8.3064 7.8869 7.4987 12 13 14 15 16 19 20 25 30 35 40 Used to calculate the present value of a series of equal payments made at the end of each period. Assume Peng requires a 5% return on its investments. = Peng Company is considering an investment expected to generate an What is the minimum salvage value that would make the investment attractive assuming a discount rate of 12%? PV factor Avocado Company has an operating income of $100,000 on revenues of $1,000,000. The excess cost over the book value of an investment that is due to expected above-average earnings is labeled on the consolidated balance sheet as: a. The net present value of the investment is $-1,341.55. Assume Peng requires a 5% return on its investments. 8. Peng Company is considering an investment expected to generate an average net income after taxes of. Explain. View some examples on NPV. The company is considering an investment that would yield a cash flow of $20,000 in 5 years. The company's required rate of return is 11 percent. Amount x PV Factor = Present Value Cash Flow Annual cash flow Select Chart Present Value of an Annuity of 1 II Residual value II Net present value. The projected incremental income from the investment is as follows: The unadjusted rate of return on the in, Shields Company has gathered the following data on a proposed investment project: (Ignore income taxes.) Use the following table: | | Present Value o. TABLE B.1 Present Value of 1 Rate Perlods 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 12% 15% 0.9901 0.9804 0.9709 0.9615 0.9524 0.9434 0.9346 0.9259 0.9174 0.9091 0.8929 0.8696 0.9803 0.9612 0.9426 0.9246 0.9070 0.8900 0.8734 0.8573 0.8417 0.8264 0.7972 0.7561 0.9706 0.9423 0.9151 0.8890 0.8638 0.8396 08163 .793 0.7722 7513 7118 06575 0.9610 0.9238 0.8885 0.8548 0.8227 0.7921 0.7629 0.7350 0.7084 0.6830 0.6355 0.5718 0.9515 0.9057 0.8626 0.8219 0.7835 0.7473 0.7130 0.6806 0.6499 0.6209 0.5674 0.4972 0.9420 0.8880 0.8375 0.7903 0.7462 0.7050 0.6663 0.6302 0.5963 0.5645 0.5066 0.4323 0.9327 0.8706 0.8131 0.7599 0.7107 0.6651 0.6227 0.5835 0.5470 0.5132 0.4523 0.3759 0.9235 0.8535 0.7894 0.7307 0.6768 0.6274 0.5820 0.5403 0.5019 0.4665 0.4039 0.3269 0.9143 0.8368 0.7664 0.7026 0.6446 0.5919 0.5439 0.5002 0.4604 0.4241 0.3606 0.2843 0.9053 0.8203 0.7441 0.6756 0.6139 0.5584 0.5083 0.4632 0.4224 0.3855 0.3220 0.2472 0.8963 0.8043 0.7224 0.6496 0.5847 0.5268 0.4751 0.4289 0.3875 0.3505 0.2875 0.2149 0.8874 0.7885 0.7014 0.6246 0.5568 0.4970 0.4440 0.3971 0.3555 0.3186 0.2567 0.1869 0.8787 0.7730 0.6810 0.6006 0.5303 0.4688 0.4150 0.3677 0.3262 0.2897 0.2292 0.1625 0.8700 0.7579 0.6611 0.5775 0.5051 0.4423 0.3878 0.3405 0.2992 0.2633 0.2046 0.1413 0.8613 0.7430 0.6419 0.5553 0.4810 0.4173 0.3624 0.3152 0.2745 0.2394 0.1827 0.1229 0.8528 0.7284 0.6232 0.5339 0.4581 0.3936 0.3387 0.2919 0.2519 0.2176 0.1631 0.1069 0.8444 0.7142 0.6050 0.5134 0.4363 0.3714 0.3166 0.2703 0.2311 0.1978 0.1456 0.0929 0.8360 0.7002 0.5874 0.4936 0.4155 0.3503 0.2959 0.2502 0.2120 0.1799 0.1300 0.0808 0.8277 0.6864 0.5703 0.4746 0.3957 0.3305 0.2765 0.2317 0.1945 0.1635 0.1161 0.0703 0.8195 0.6730 0.5537 0.4564 0.3769 0.3118 0.2584 0.2145 0.1784 0.1486 0.1037 0.0611 0.7798 0.6095 0.4776 0.3751 0.2953 0.2330 0.1842 0.1460 0.1160 0.0923 0.0588 0.0304 0.7419 0.5521 0.4120 0.3083 0.2314 0.174 0.1314 0.0994 0.0754 0.0573 0.0334 0.0151 0.7059 0.5000 0.3554 0.2534 0.1813 0.1301 0.0937 0.0676 0.0490 0.0356 0.0189 0.0075 0.6717 0.4529 0.3066 0.2083 0.1420 0.0972 0.0668 0.0460 0.0318 0.0221 0.0107 0.0037 9 10 12 13 14 15 16 18 19 20 25 30 35 40 * Used to compute the present value of a known future amount. a. Required information Use the following information for the Quick Study below. The company uses a discount rate of 16% in its capital budgeting. should purchase a used Caterpillar mini excavator, A) The distribution of exam scores for Statistics is normally The estimated cash flow for the investment are as follows: N Description Cash flow ($) 0 price of the system Fo 1-4 revenue per, Joe Sixpack Inc. is considering an investment that will cost is $400,000. Zhang et al. Assume the company uses straight-line . Yearly net cash inflows (before taxes) from the machine are estimated at $140,000. Assume Peng requires a 10% return on its investments. 1,950/25,500=7.65. Since bond yields are expected to stay low and public equity returns are likely to be below historical annualized returns over the next 10 years, institutional investorspension funds, insurance companies, endowments, foundations, investment companies, banks, and family officesare increasing allocation to private capital. The investment costs $51,900 and has an estimated $10,800 salvage value. (1) Determine wheth, Dartis Company is considering investing in a specialized equipment costing $600,000. a) construct an influence diagram that relates these variables An asset costs $70,000 and is expected to have a $10,000 salvage value at the end of its 10-year life. Which option should the company choose to invest in? Carmino Company is considering an investment in equipment that is expected to generate an after-tax income of $5,000 for each year of its four-year life. Management predicts this machine has an 11-year service life and a $60,000 salvage value, and it uses straight-line depreciation. d) Provides an, Dango Corporation is reviewing an investment proposal. Management predicts this machine has a 9-year service life and a $140,000 salvage value, and it uses str, A machine costs $500,000 and is expected to yield an after-tax net income of $19,000 each year. The system requires a cash payment of $125,374.60 today. The company anticipates a yearly net income of $3,700 after taxes of 20%, with the cash flows to be received evenly throughout each year. 2003-2023 Chegg Inc. All rights reserved. Axe anticipates annual net income after taxes of $1,500 from selling the product produced by the new machin, A company can buy a machine that is expected to have a three-year life and a $21,000 salvage value. Assume Peng requires a 10% return on its investments. Assume Peng requires a 5% return on its investments. The facts on the project are as tabulated. Answered: Peng Company is considering an | bartleby What is the NPV of the investment, The Zinger Corporation is considering an investment that has the following data: Year 1 Year 2 Year 3 Year 4 Year 5 Investment $8,000 $3,000 Cash inflow $2,000 $2,000 $5,000 $4,000 $4,000 Cash inflows occur evenly throughout the year. Equity method b. Assume Peng requires a 15% return on its investments. an average net income after taxes of $3,200 for three years. Compute the net present value of this investment. The management of Bischke Corporation is investigating an investment in equipment that would have a useful life of 8 years. Assume the company uses straight-line depreciation. Cash flow The investment costs $59,400 and has an estimated $7,200 salvage value. A company's required rate of return on capital budgeting is 15%. Assume the company uses straight-line depreciation. 8 years b. 94% of StudySmarter users get better grades. Using straight-line, Wildhorse Company owns equipment that costs $1,071,000 and has accumulated depreciation of $452,200. Assume Peng requires a 10% return on its investments. The initial cost and estimates of the book value of the investment at the end of each year, the net cash flows for each year, and, The Zinger Corporation is considering an investment that has the following data: Cash inflows occur evenly throughout the year. The investment costs $59.100 and has an estimated $6.900 salvage value. Accounting Rate of Return Choose Denominator: Choose Numerator: - Accounting Rate of Return Accounting rate of return. Peng Company is considering an investment expected to generate an average net income after taxes of $2,100 for three years. The expected average rate of return, giving effect to depreciation on investment is 15%. The role of buyers justice in achieving socially sustainable global The average stock currently returns 15% and short-term treasury bills are offering 6%. Peng Company is considering an investment expected to generate an CO2 aquifer storage site evaluation and monitoring: understanding the Everything you need for your studies in one place. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided. The project would require a $28,000 initial investment and has a salvage value of $2,000, A company has a minimum required rate of return of 9%. Experts are tested by Chegg as specialists in their subject area. After inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction. The company anticipates a yearly net income of $2,950 after taxes of 34%, with the cash flows to be received evenly throughout each year.