Question
In: Accounting
The following data pertain to an investment proposal (ignore income taxes): cost of the investment $34,000...
The following data pertain to an investment proposal (ignore income taxes): cost of the investment $34,000 Annual Cost savings $10,000 Estimated salvage value $5,000 life of the project 5 years Discount rate 11%
Solutions
Expert Solution
| Project | ||||
| Years | Net cash Inflow | PV Factor11% | Present value | |
| 1 | Annual Cost savings | 10,000 | 0.90090 | 9,009 |
| 2 | Annual Cost savings | 10,000 | 0.81162 | 8,116 |
| 3 | Annual Cost savings | 10,000 | 0.73119 | 7,312 |
| 4 | Annual Cost savings | 10,000 | 0.65873 | 6,587 |
| 5 | Annual Cost savings | 10,000 | 0.59345 | 5,935 |
| 5 | Salvage value | 5,000 | 0.59345 | 2,967 |
| Total PV of Inflows | 39,926 | |||
| 0 | Initial Investment | 34,000 | ||
| Net Present value on the Project | 5,926 | |||
ekkarill92 answered 2 years agoRelated Solutions
The following data pertain to an investment proposal Cost of investment 45,000 annual Cost savings 10,000...
The following data pertain to an investment proposal
Cost of investment 45,000
annual Cost savings 10,000
Estimated salvage value 0
Expected life of investemnt 5 years
discount Rate 10%
What is the net present Value of the proposed investment
Joetz Corporation has gathered the following data on a proposed investment project (Ignore income taxes.): Investment...
Joetz Corporation has gathered the following data on a proposed
investment project (Ignore income taxes.):
Investment required in equipment
$
37,000
Annual cash inflows
$
8,800
Salvage value of equipment
$
0
Life of the investment
15
years
Required rate of return
10
%
The company uses straight-line depreciation on all equipment.
Assume cash flows occur uniformly throughout a year except for the
initial investment.
The simple rate of return for the investment (rounded to the
nearest tenth of a...
Joetz Corporation has gathered the following data on a proposed investment project (Ignore income taxes.): Investment...
Joetz Corporation has gathered the following data on a proposed
investment project (Ignore income taxes.):
Investment required in equipment
$
35,500
Annual cash inflows
$
8,200
Salvage value of equipment
$
0
Life of the investment
15
years
Required rate of return
10
%
The company uses straight-line depreciation on all equipment.
Assume cash flows occur uniformly throughout a year except for the
initial investment.
Click here to view Exhibit 13B-1 and Exhibit 13B-2, to determine
the appropriate discount factor(s)...
Joetz Corporation has gathered the following data on a proposed investment project (Ignore income taxes.): Investment...
Joetz Corporation has gathered the following data on a proposed
investment project (Ignore income taxes.):
Investment required in equipment
$
31,000
Annual cash inflows
$
6,400
Salvage value of equipment
$
0
Life of the investment
15
years
Required rate of return
10
%
The company uses straight-line depreciation on all equipment.
Assume cash flows occur uniformly throughout a year except for the
initial investment.
Click here to view Exhibit 13B-1 and Exhibit 13B-2, to determine
the appropriate discount factor(s)...
Joetz Corporation has gathered the following data on a proposed investment project (Ignore income taxes.): Investment...
Joetz Corporation has gathered the following data on a proposed
investment project (Ignore income taxes.):
Investment required
in equipment
$
30,500
Annual cash inflows
$
6,200
Salvage value of equipment
$
0
Life of the investment
15
years
Required rate of return
10
%
The company uses straight-line depreciation on all equipment.
Assume cash flows occur uniformly throughout a year except for the
initial investment.
Click here to view Exhibit 13B-1 and Exhibit 13B-2, to determine
the appropriate discount factor(s)...
Joetz Corporation has gathered the following data on a proposed investment project (Ignore income taxes.): Investment...
Joetz Corporation has
gathered the following data on a proposed investment project
(Ignore income taxes.):
Investment required
in equipment
$
33,500
Annual cash inflows
$
7,400
Salvage value of equipment
$
0
Life of the investment
15
years
Required rate of return
10
%
The company uses
straight-line depreciation on all equipment. Assume cash flows
occur uniformly throughout a year except for the initial
investment.
Click here to view
Exhibit 13B-1 and Exhibit 13B-2, to determine the appropriate
discount factor(s)...
Ignore income taxes in this problem.) The Zinger Corporation is considering an investment that has the...
Ignore income taxes in this problem.) The Zinger
Corporation is considering an investment that has the following
data:
Year 1Year 2Year 3Year 4Year 5
Investment$13,500$4,100Cash
inflow$3,100$3,100$8,000$5,100$5,100
Cash inflows occur evenly throughout the year. The
payback period for this investment is: (Round your
answer
3 years
4 years
3.7 years
4.7 years
(Ignore income taxes in this problem.) Overland Corporation has gathered the following data on a proposed...
(Ignore income taxes in this problem.) Overland Corporation has
gathered the following data on a proposed investment project:
Click here to view Exhibit 8B-1 and Exhibit 8B-2 to determine
the appropriate discount factor(s) using tables.
Investment required in equipment
$
410,000
Annual cash inflows
$
60,000
Salvage value of equipment
$
0
Life of the investment
16
years
Discount rate
9
%
The company uses straight-line depreciation on all equipment.
Assume cash flows occur uniformly throughout a year except for...
(Ignore income taxes in this problem.) Overland Corporation has gathered the following data on a proposed...
(Ignore income taxes in this problem.) Overland Corporation has
gathered the following data on a proposed investment project:
Click here to view Exhibit 8B-1 and Exhibit 8B-2 to determine
the appropriate discount factor(s) using tables.
Investment required in equipment
$
560,000
Annual cash inflows
$
82,000
Salvage value of equipment
$
0
Life of the investment
16
years
Discount rate
9
%
The company uses straight-line depreciation on all equipment.
Assume cash flows occur uniformly throughout a year except for...
Welch Corporation is planning an investment with the following characteristics (Ignore income taxes.): Useful life 6...
Welch Corporation is planning an investment with the following
characteristics (Ignore income taxes.): Useful life 6 years Yearly
net cash inflow $ 80,000 Salvage value $ 0 Internal rate of return
17 % Required rate of return 13 %
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