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Your company is deciding whether to invest in a new machine. The new machine will increase cash flow by $316,000 per year. You believe the technology used in the machine has a 10-year life; in other words, no matter when you purchase the machine, it will be obsolete 10 years from today. The machine is currently priced at $1,690,000. The cost of the machine will decline by $106,000 per year until it reaches $1,160,000, where it will remain. |
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If your required return is 13 percent, calculate the NPV today. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) |
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NPV |
$ |
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If your required return is 13 percent, calculate the NPV if you wait to purchase the machine until the indicated year. (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) |
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NPV |
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Year 1 |
$ |
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Year 2 |
$ |
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Year 3 |
$ |
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Year 4 |
$ |
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Year 5 |
$ |
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Year 6 |
$ |
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Should you purchase the machine? |
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If so, when should you purchase it? |
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In: Finance
The following information relates to a company's accounts receivable: gross accounts receivable balance at the beginning of the year, $300,000; allowance for uncollectible accounts at the beginning of the year, $25,000 (credit balance); credit sales during the year, $1,500,000; accounts receivable written off during the year, $16,000; cash collections from customers, $1,450,000. Assuming the company estimates bad debts at an amount equal to 2% of credit sales.
1. Calculate bad debt expenses for the year.
2. Calculate the year-end balance in the allowance for uncollectible accounts.
In: Accounting
The following information relates to a company's accounts receivable: gross accounts receivable balance at the beginning of the year, $420,000; allowance for uncollectible accounts at the beginning of the year, $31,000 (credit balance); credit sales during the year, $1,550,000; accounts receivable written off during the year, $22,000; cash collections from customers, $1,600,000. Assuming the company estimates bad debts at an amount equal to 2% of credit sales.
1. Calculate bad debt expense for the year.
2. Calculate the year-end balance in the allowance for uncollectible accounts.
In: Accounting
you need to have $250,000 per year to live comfortable in retirement to allow for your passion for travel. You feel you will live to your 100th year (35 years after retirement). You believe that the rate of return on your investments will be 5% per year. How much of a retirement fund must you have in order to start paying yourself 250,000 per year on the first day of retirement and the beginning of each year thereafter until your 100th year? show work
In: Finance
Your roommate decides to buy an awesome computer for $10,000 at the end of the year. He/she thinks the computer will last for 5 years. At the end of the first year, he/she upgrades the RAM (a component inside the computer) for $1,000 but it is only expected to last 3 years. At the end of the second year, he/she adds a new cooling system to the computer for $2,000 and it is expected to last for the remaining life of the computer.
What is depreciation in year 1?
What is depreciation in year 3?
What is depreciation in the final year?
In: Finance
Alpha Corporation has been in business for two years. It incurred the following items last year (Year 1): Gross profits on sales 240000 Operating expenses 100000 Long-term capital gain 8000 Short-term capital loss 12000 Alpha reported the following items this year (Year 2): Gross profits on sales 600,000 Operating expenses 165,000 Long term capital gain 10000 Compute Alpha’s taxable income and tax liability for Year 1 and Year 2.
In: Accounting
Answer:
(i) $263.80
(ii) year 1 = $100; year 2 = $83.62; year 3 = $65.60; year 4 = $45.78; year 5 = $23.98
I need to know the process to solve it.
In: Economics
Please do it by type not pics.
1.$2,000,000 ten year note with 10% interest. The market rate is 8.5%. The interest payments are made monthly and interest compounds monthly.
· How much cash was received in year 1?
· What was the amortized amount of the premium in year 2 - month 3?
· How much interest revenue was recognized in year 3 - month 4?
· What is the carrying value of the note at the end of year 4?
· What is the balance of the discount account correlated with this note at the end of year 3?
In: Accounting
Spencer Company's inventory records for the most recent year contain the following data:
Spencer Company sold a total of 19,200 units during the year.
Beginning Inventory 4,000 $ 8.00
Purchases during year 16,000 $ 12.00
1. Using the average-cost method, compute the cost of goods sold and ending inventory for the year.
2. Using the FIFO method, compute the cost of goods sold and ending inventory for the year.
3. Using the LIFO method, compute the cost of goods sold and ending inventory for the year.
In: Accounting
Nobel Tech Inc. is building a new production line. The cost of the production line is $3 million in the current year and $2 million in the following year. The production line is expected to bring in cash inflows of $1.6 million in year 2, and $2 million each year from year 3 to year 7. The company uses a cost of capital of 10% on all the projects.
The discounted payback period of this project is ____________.
Group of answer choices
a. 4.5 years
b. 6.5 years
c. 3.7 years
d. 5.5 years
In: Finance