Question
In: Accounting
Develop a spreadsheet to determine the net present value or present worth of the following project:...
Develop a spreadsheet to determine the net present value or
present worth of the following project:
Bonus Depreciation: 0%
Investment: 140,000
Revenue/Savings: 25,000
Incremental Expense/Cost: 5,000
Salvage Value: 25,000
Project Life: 10 years
MACRS Schedule: 7 years
Tax Rate: 25%
MARR: 12%
Inflation: 3%
Is this a good investment to make?
Rework the problem with Bonus Depreciation of 50% and
100%
Determine the internal rate of return for the project in the
previous problem with all three levels of Bonus Depreciation.
What is the project’s payback period for all three cases (0%
bonus depreciation, 50% bonus depreciation, and 100% bonus
depreciation)?
Solutions
ekkarill92 answered 5 months agoRelated Solutions
Determine the breakeven (based on net present worth) initial cost for a project with an interest...
Determine the breakeven (based on net present worth) initial
cost for a project with an interest rate of 6% and a useful life of
14 years with the following data:
Annual Cost (O&M): $7,500/ year with an annual increase of
$800/ year
Annual Revenue = $9,000/ year with an annual increase of $1,000/
year
Salvage Value: $50,000
If the net present value of a project is positive, which of the following statements is...
If the net present value of a project is positive, which of the
following statements is (are) true? Explain why?
i) Its payback period is less than or equal to the cut-off
point
ii) Its payback period is more than the cut-off point
iii) Its internal rate of return is less than the cost of
capital
iv) Its internal rate of return is more than the required rate
of return
Which of the following amounts is closest to the net present value of a project that...
Which of the following amounts is closest to the net present
value of a project that contributes $5,000 at the end of the first
year and $8,000 at the end of the second year? The initial cost is
$3,000. The appropriate interest rate is 8% for the first year and
9% for the second year.
A. $8,585
B. $8,426
C. $8,363
1. If the net present value of project A is +$70, and of project B is...
1.
If the net present value of project A is +$70, and of project B
is +$50, then the net present value of the combined project is:
Group of answer choices
+$80
+$140
None of the above
+$60
+$120
+$20
2.
Are there problems with using the payback rule? The following
are disadvantages of using the payback rule
except:
Group of answer choices
The payback rule does not have the value additive property
The payback rule does not use the...
Determine the net present value for a project that costs $229,000 and would yield after-tax cash...
Determine the net present value for a project that costs
$229,000 and would yield after-tax cash flows of $21,000 per year
for the first 14 years, $29,000 per year for the next 18 years, and
$42,000 per year for the following 12 years. Your firm's cost of
capital is 10.00%.
Question 16 options:
$2,488.65
$1,345.00
$1,588.16
$1,885.34
$2,714.89
33. Determine the net present value for a project that costs $286,000 and would yield after-tax...
33. Determine the net present value for a project that costs
$286,000 and would yield after-tax cash flows of $21,000 per year
for the first 13 years, $29,000 per year for the next 12 years, and
$42,000 per year for the following 12 years. Your firm's cost of
capital is 8.00%.
Determine the net present worth (NPW) of the cash flows given in table below for an...
Determine the net present worth (NPW) of the cash flows given in
table below for an investment opportunity being presented to a
company. MARR =10%. Year 0 1-10 11-15 16-25 26-30 Cash Flow -$100K
10K 20K -5K 30K
Determine the Payback Period, the Discounted Payback Period, and the Net Present Value for the following...
Determine the Payback Period, the Discounted Payback Period, and
the Net Present Value for the following after-tax cash flow
projections. Also tell me whether the IRR is greater or less then
the RRR.
A. Year ATCF
0 $(60,000)
1 21,000
2 27,000
3 24,000
4 16,000
Assume a 16% required rate of return
Determine the Payback Period, the Discounted Payback Period, and the Net Present Value for the following...
Determine the Payback Period, the Discounted Payback Period, and
the Net Present Value for the following after-tax cash flow
projections. Also tell me whether the IRR is greater or less then
the RRR
B. Year ATCF
0 (100,000)
1 (320,000)
2 130,000
3 185,000
4 200,000
5 195,000
6 150,000
Assume a 20% required rate of return
If a project has a positive net present value, which of the following must be true?...
If a project has a positive net present value, which of the
following must be true?
a) the internal rate of return is less than the cost of
capital
b) the profitability index is less than one
c) the profitability index is greater than one
d) the internal rate of return equals the cost of capital
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