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= Compute this machine's accoun, A machine costs $505,000 and is expected to yield an after-tax net income of $20,000 each year. Peng Company is considering an investment expected to generate an average net income after taxes of $1,950 for three years. The company pays an operating tax rate of 30%. Compute the payback period. The facts on the project are as tabulated. The investment costs $45,300 and has an estimated $7,500 salvage value. What is the accounti, A company buys a machine for $70,000 that has an expected life of 6 years and no salvage value. Assu, Peng Company is considering an investment expected to generate an average net income after taxes of $3,000 for three years. Assume Peng requires a 5% return on its investments. The lease term is five years. using C++ The company s required rate of return is 13 percent. Assume the company uses straight-line depreciation. The net present value (NPV) is a capital budgeting tool. Required information Use the following information for the Quick Study below. You can expect revenues net of any expense, except machine costs, of $150,000 at the end of each year for five years. A machine costs $700,000 and is expected to yield an after-tax net income of $52,000 each year. The investment costs $57.600 and has an estimated $8,400 salvage value. The machine will cost $1,764,000 and is expected to produce a $191,000 after-tax net income to be received at the end of each year. Stop procrastinating with our smart planner features. Peng Company is considering an investment expected to generate an average net income after taxes of $2,900 for three years. Calculate its book value at the end of year 10. Peng Company is considering an investment expected to generate an average net income after taxes of $1,950 for three years. (Round each present value calculation to the nearest dollar. Answered: Peng Company is considering an | bartleby 2. Management predicts this machine has a 10-year service life and a $100,000 salvage value, and it uses st, A machine costs $700,000 and is expected to yield an after-tax net income of $30,000 each year. Compute the net present value of this investment. What is the current value of the company? What is the annual depreciation expense using the straight line method? 2.72. The company is considering an investment that would yield a cash flow of $12,000 per year for five years. Park Co. is considering an investment that requires immediate payment of $27,000 and provides expected cash inflows of $9,000 annually for four years. The company's required rate of return is 12 percent. Reverse innovations bridging the gap between entrepreneurial PVA of $1. projected GROSS cash flows from the investment are $150,000 per year. Peng Company is considering an investment expected to generate an average net income after taxes of $3,100 for three years. What investment(s) should the firm make according to net present v, Unrealized gains or losses on available-for-sale investments occur when a company adjusts the investment to : A) average value when an asset is disposed B) average value but has not yet disposed of the asset C) fair value when an asset is disposed D) f, Finnegan Company plans to invest in a new operating plant that is expected to cost $500,000. Coins can be redeemed for fabulous The equipment has a five-year life and an estimated salvage value of $50,000. Choose Numerator: Accounting Rate of Return Choose Denominator: = Accounting Rate of Return = Accounting rate of return, Required information [The following information applies to the questions displayed below.) What is the accountin, A company buys a machine for $77,000 that has an expected life of 6 years and no salvage value. Experts are tested by Chegg as specialists in their subject area. Get access to this video and our entire Q&A library, How to Calculate Net Present Value: Definition, Formula & Analysis. A machine costs $210,000, has a $16,000 salvage value, is expected to last nine years, and will generate an after-tax income of $47,000 per year after straight-line depreciation. criteria in order to generate long-term competitive financial returns and . Assume the company uses straight-line depreciation. Assume the company uses straight-line depreciation (PV of $1. What is the internal rate of return if the company buys this machine? 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. The company currently has no debt, and its cost of equity is 15 percent. The investment costs $49,500 and has an estimated $10,800 salvage value. Assume Peng requires a 10% return on its investments. The investment costs $48,600 and has an estimated $6,300 salvage value. The business environment, namely market uncertainty and competition intensity, is also analysed in association with the firm's strategic orientation. 17 US public . The investment costs $51,900 and has an estimated $10,800 salvage value. #12 Peng Company is considering an investment expected to generate an average net income after taxes of $2,900 for three years. This site is using cookies under cookie policy . gifts. 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. A company buys a machine for $76,000 that has an expected life of 6 years and no salvage value. The estimated cash inflow from the project are as follows: Year Cash Inflow Present value factor at 10% 1 70,000 0.909 2 80,000 0.826 3 120,000 0.751 4 90,000 0.683 5 60,000 0.621 Ca, A company is considering investment in a Flexible Manufacturing System. 6 years c. 7 years d. 5 years. Peng Company is considering an investment expected to generate an average net income after taxes of $3,100 for three years. The system requires a cash payment of $125,374.60 today. If a table of present v, Grouper Company owns equipment that cost $1,044,000 and has accumulated depreciation of $440,800. 2003-2023 Chegg Inc. All rights reserved. If the value of leased asset is $125 and the cost of debt is 10%, what is the, The cost of capital for a firm is 10 percent. Peng Company is considering an investment expected to generate an average net income after taxes of $2,700 for three years. a cost of $19,800. The investment costs $45,000 and has an estimated $6,000 salvage value. a. Calculate the payback period for the proposed e, You have the following information on a potential investment. Negative amounts should be indicated by a minus sign.) What lump-sum amount should the company invest now to have the $370,000 available at the end of the eight-year period? Q8QS Peng Company is considering an i [FREE SOLUTION] | StudySmarter d) 9.50%. S4 000 per year for 6 years accumulates to $29,343.60 ($4,000 7.3359). Assume all sales revenue is received, Elmdale Company is considering an investment that will return a lump sum of $769,700, 7 years from now. The expected future net cash flows from the use of the asset are expected to be $595,000. A company has three independent investment opportunities. 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 net income, Elmdale Company is considering an investment that will return a lump sum of $725,500, 6 years from now. Compute the net present value of this investment. Compute this machine's accou, A machine costs $300,000 and is expected to yield an after-tax net income of $9,000 each year. The company is currently considering an investment that is expected to generate annual cash inflows of $10,000 for 6 years. Crispen normally uses a 10 percent discount rate to evaluate projects but feels it should use 12 per. The company is considering an investment that would yield a cash flow of $20,000 in 5 years. The investment costs $52,200 and has an estimated $9,000 salvage value. What amount should Elmdale Company pay for this investment to earn a 12% return? Ignore income taxes. Corresponding with the IRS in writing Yea, A company projects an increase in net income of $40,000 each year for the next five years if it invests $500,000 in new equipment. Management predicts this machine has a 8-year service life and a $100,000 salvage value, and it uses str, Carla Company owns equipment that cost $1,044,000 and has accumulated depreciation of $440,800. 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 net income, Drake Corporation is reviewing an investment proposal. Compute the net present value of this investment. A company has two investment choices that cost $3,000 each: one that brings in $10,000 in revenue at 8% interest in two years, and another that brings in $11,000 revenue at the same interest rate . The following data concerns a proposed equipment purchase: Cost $136,400 Salvage value $3,600 Estimated useful life 4 years Annual net cash flows $45,700 Depreciation method Straight-line The annual average investment amount used to calculate the accounti, Landmark Company is considering an investment in new equipment costing $500,000. There is a 77 percent chance that an airline passenger will Compute the net present value of this investment. The expected future net cash flows from the use of the asset are expected to be $580,000. How to Calculate Net Present Value: Definition, Formula & Analysis These assets contribute $28,000 to annual net income when depreciation is computed on a straight-line basis. Assume Peng requires a 15% return on its investments. Compute the payback period. Compute the net present value of this investment. The investment is expected to return the following cash flows, discounts at 8%. Compute the accounting sane of return for this investment assume the company uses straight-line depreciation. Assume Peng requires a 5% return on its investments. It generates annual net cash inflows of $10,000 each year. At a discount rate of 10 per, Zippydah Company has the following data at December 31, 2014. Peng Company is considering an investment expected to generate an average net income after taxes of $2,000 for three years. The investment costs $45,600 and has an estimated $8,700 salvage value. Financial projections for the investment are tabulated here. The company uses the straight-line method of depreciation and has a tax rate of 40 percent. The investment costs $45,000 and has an estimated $10,800 salvage value. straight-line depreciation Compute the net present value of this investment. Find step-by-step Accounting solutions and your answer to the following textbook question: Peng Company is considering an investment expected to generate an average net income after taxes of $1,950 for three years. Assume Peng requires a 15% 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. Peng Company is considering an investment expected to generate an Depreciation is calculated using the straight-line method. The, Shep Corp. is considering a 20-year investment with a net present value of cash flows of -$20,800 and an uncertain salvage value. What are the appropriate labels for classifying the relationship between this cost item and th Peng Company is considering an investment expected to generate an average net income after taxes of $3,000 for three years. X The company uses the straight-line method of depreciation and has a tax rate of 40 per cent. The company is expected to add $9,000 per year to the net income. 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. A machine costs $190,000, has a $10,000 salvage value, is expected to last nine years, and will generate an after-tax income of $30,000 per year after straight-line depreciation. What is the most that the company would be willing to invest in this, A company has a minimum required rate of return of 9%. Compute. The investment costs $45,000 and has an estimated $6,000 salvage value. Compute the net present value of this investment. d) Provides an, Dango Corporation is reviewing an investment proposal. Assume the company requires a 12% rate of return on its investments. Multiple Choice, returns on investment is computed in the following manner. The investment costs $45,000 and has an estimated $6,000 salvage value. Compute this machine's accounti, A machine costs $200,000 and is expected to yield an after-tax net income of $5,040 each year. Assume the company requires a 12% rate of return on its investments. The investment costs $48,600 and has an estimated $6,300 salvage value. Zhang et al. PV factor Peng Company is considering an investment expected to generate an average net income after taxes of $2,100 for three years. Yokam Company is considering two alternative projects. O, Reece Manufacturing Company is considering the following investment proposal: The firm uses the straight-line method of depreciation with no mid-year convention. Transcribed image text: Peng Company is considering an investment expected to generate an average net income after taxes of $2, 400 for three years. Compute this machine's accounti, On 1/1, a company buys equipment with a cost of $8,100, an estimated salvage value of $1,100, and an estimated useful life of 7 years. ROI is equal to turnover multiplied by earning as a percent of sales. Which of the following functional groups will ionize in Compute the net present value of this investment. Using straight-line, Wildhorse Company owns equipment that costs $1,071,000 and has accumulated depreciation of $452,200. What is the present value, Strauss Corporation is making a $91,800 investment in equipment with a 5-year life. The salvage value of the asset is expected to be $0. 8 years b. What is the present valu, Strauss Corporation is making an $85,200 investment in equipment with a 5-year life. Compute the net present value of this investment. QS 11-8 Net present value LO P3Peng Company is considering an investment expected to generate an average net income after taxes of $1,950 for three years. 2003-2023 Chegg Inc. All rights reserved. It is expected that the rate of utilization of inputs should not exceed the corresponding outputs being produced if the efficiency of the system concerned is to be maximized. Specifically, by bringing remanufacturing into consideration, this paper examines a manufacturer that has four alternative carbon abatement strategies: (1) do nothing, (2) invest in carbon . The investment costs $45,000 and has an estimated $6,000 salvage value. The company uses the straight-line method of d, Determine Present Value: You can invest in a machine that costs $500,000. Peng Company is considering an investment expected to generate an average net income after taxes of $2,000 for three years. , ided by total investment.. total investment is current assets (inventories, accounts receivables and cash) plus fixed assets. Become a Study.com member to unlock this answer! 8 years b. Compute the net present value of this investment. Assume Peng requires a 10% return on its investments. a. (Negative amounts should be indicated by a minus sign.). Peng Company is considering an investment expected to generate an Trading securities (fair value) = $70,000 Available-for-sale securities (fair value) = $40,000 Held-to-maturity securities (amortized cost) = $47,000 At what amount will Ahnen report investments in its current, A company is contemplating investing in a new piece of manufacturing machinery. The fair value of the equipment is $476,000. See Answer. The company anticipates a yearly net income of $3,650 after taxes of 22%, with the cash flows to be received evenly throughout each year. What is the payback period in years ap, The Montana Company has decided to invest in a project that is expected to produce the following cash flows: $12,500 (year 1), $14,000 (year 2) and $9,000 (year 3). Babirusa Company is considering the following investment: Initial capital investment $175,000 Estimated useful life 3 years Estimated disposal value in 3 years $25,000 Estimated annual savings in cas, Sunset Inc. is trying to determine if they should invest in a new machine that would be more efficient and would generate an annual profit of $100,000 (after tax). What method, A machine costs $400,000 and is expected to yield an after-tax net income of $9,000 each year. Using a sample of Chinese-listed firms with key soil pollution regulation from 2013 to 2020, this study utilized the Difference-in-Differences method . Compute the, A company is considering the following investment project: Capital outlay $200,000 Net Profit p.a. Createyouraccount. QS 11-8 Net present value LO P3 Peng Company is considering an Given the riskiness of the investment opportunity, your cost of capital is 27%. On whether to accept or reject a project, the NPV is interpreted on the result of the calculation. Required information [The following information applies to the questions displayed below.) Administrative Sciences | Free Full-Text | Firm Characteristics 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. Project 1 requires an initial investment of $400,000 and has a present value of cash flows of $1,100,000. The company uses the straight-line method of depreciation and has a tax rate of 40 percent. A machine costs $180,000, has a $12,000 salvage value, is expected to last eight years, and will generate an after-tax income of $39,000 per year after straight-line depreciation. Required information [The folu.ving information applies to the questions displayed below.) John J Wild, Ken W. Shaw, Barbara Chiappetta. 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. Dynamic modeling and analysis of multi-product flexible production line The Longlife Insurance Company has a beta of 0.8. The management of Samsung is planning to invest in a new companywide computerized inventory tracking system. The investment costs $54,000 and has an estimated $7,200 salvage value. The warehouse will cost $370,000 to build. ABC Company is adding a new product line that will require an investment of $1,500,000. investment costs $48,900 and has an estimated $12,000 salvage What is Ronis' Return on Investment for 2015? Determine the net present value, and ind. Assume Pang requires a 5% return on its investments. You'll get a detailed solution from a subject matter expert that helps you learn core concepts. It is considering investing in a project that costs $50,000 and is expected to generate cash inflows of $20,000 at the end of each year for 3 years. The purpose of this study is to empirically examine the influence of firm characteristics (size, age, industry type, and ownership) on a firm's strategic orientation. The management predicts that this machine has a 10-year services life and a $100,000 salvage value, and, The Placque Company purchased an office building for $4,555,000. The security exceptions clause in the WTO legal framework has several sources. investment costs $51,600 and has an estimated $10,800 salvage Using the original cost of the asset, the unadjusted rate of return o, The Charles Company is planning to invest $450,000 in a factory machine. Project 2 requires an initial investment of $4,000,000 and has a present value of cash flows of $6,000,000. We reviewed their content and use your feedback to keep the quality high. After inputting the value, press enter and the arrow facing a downward direction. The investment costs $45,300 and has an estimated $7,500 salvage value. The investment costs $59,400 and has an estimated $7,200 salvage value. Assume the company uses What is the cash payback period? b) 4.75%. It expects to generate $2 million in net earnings after taxes in the coming year. $2,000 per year for 10 years is the equivalent of $12,835 today ($2,000 6.4177) If an asset costs $70,000 and is expected to have a $10,000 salvage value at the end of its ten-year life and generates annual net cash inflows of $10,000 each year, the cash payback period is _____. If a table of present v, A company can buy a machine that is expected to have a three-year life and a $29,000 salvage value. If t, Your company just bought an asset for $200,000 with an estimated useful life of 5 yrs, and a salvage value of $10,000. copyright 2003-2023 Homework.Study.com. Which of, Fraser Company will need a new warehouse in eight years. Assume Peng requires a 5% return on its investments. You'll get a detailed solution from a subject matter expert that helps you learn core concepts. What are the investment's net present value and inte. The investment costs $45,000 and has an estimated $6,000 salvage value. Compute this machine's accoun, A machine costs $300,000 and is expected to yield an after-tax net income of $9,000 each year. The company uses the straight-line method of depreciation and has a tax rate of 40 percent. Select Chart Amount x PV Factor = Present Value Cash Flow Annual cash flow Residual value Net present value, Required information [The folu.ving information applies to the questions displayed below.) 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. The machine will cost $1,812,000 and is expected to produce a $203,000 after-tax net income to be re, A company can buy a machine that is expected to have a three-year life and a $23,000 salvage value. The fair value. 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. 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= Compute this machine's accoun, A machine costs $505,000 and is expected to yield an after-tax net income of $20,000 each year. Peng Company is considering an investment expected to generate an average net income after taxes of $1,950 for three years. The company pays an operating tax rate of 30%. Compute the payback period. The facts on the project are as tabulated. The investment costs $45,300 and has an estimated $7,500 salvage value. What is the accounti, A company buys a machine for $70,000 that has an expected life of 6 years and no salvage value. Assu, Peng Company is considering an investment expected to generate an average net income after taxes of $3,000 for three years. Assume Peng requires a 5% return on its investments. The lease term is five years. using C++ The company s required rate of return is 13 percent. Assume the company uses straight-line depreciation. The net present value (NPV) is a capital budgeting tool. Required information Use the following information for the Quick Study below. You can expect revenues net of any expense, except machine costs, of $150,000 at the end of each year for five years. A machine costs $700,000 and is expected to yield an after-tax net income of $52,000 each year. The investment costs $57.600 and has an estimated $8,400 salvage value. The machine will cost $1,764,000 and is expected to produce a $191,000 after-tax net income to be received at the end of each year. Stop procrastinating with our smart planner features. Peng Company is considering an investment expected to generate an average net income after taxes of $2,900 for three years. Calculate its book value at the end of year 10. Peng Company is considering an investment expected to generate an average net income after taxes of $1,950 for three years. (Round each present value calculation to the nearest dollar. Answered: Peng Company is considering an | bartleby 2. Management predicts this machine has a 10-year service life and a $100,000 salvage value, and it uses st, A machine costs $700,000 and is expected to yield an after-tax net income of $30,000 each year. Compute the net present value of this investment. What is the current value of the company? What is the annual depreciation expense using the straight line method? 2.72. The company is considering an investment that would yield a cash flow of $12,000 per year for five years. Park Co. is considering an investment that requires immediate payment of $27,000 and provides expected cash inflows of $9,000 annually for four years. The company's required rate of return is 12 percent. Reverse innovations bridging the gap between entrepreneurial PVA of $1. projected GROSS cash flows from the investment are $150,000 per year. Peng Company is considering an investment expected to generate an average net income after taxes of $3,100 for three years. What investment(s) should the firm make according to net present v, Unrealized gains or losses on available-for-sale investments occur when a company adjusts the investment to : A) average value when an asset is disposed B) average value but has not yet disposed of the asset C) fair value when an asset is disposed D) f, Finnegan Company plans to invest in a new operating plant that is expected to cost $500,000. Coins can be redeemed for fabulous The equipment has a five-year life and an estimated salvage value of $50,000. Choose Numerator: Accounting Rate of Return Choose Denominator: = Accounting Rate of Return = Accounting rate of return, Required information [The following information applies to the questions displayed below.) What is the accountin, A company buys a machine for $77,000 that has an expected life of 6 years and no salvage value. Experts are tested by Chegg as specialists in their subject area. Get access to this video and our entire Q&A library, How to Calculate Net Present Value: Definition, Formula & Analysis. A machine costs $210,000, has a $16,000 salvage value, is expected to last nine years, and will generate an after-tax income of $47,000 per year after straight-line depreciation. criteria in order to generate long-term competitive financial returns and . Assume the company uses straight-line depreciation. Assume the company uses straight-line depreciation (PV of $1. What is the internal rate of return if the company buys this machine? 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. The company currently has no debt, and its cost of equity is 15 percent. The investment costs $49,500 and has an estimated $10,800 salvage value. Assume Peng requires a 10% return on its investments. The investment costs $48,600 and has an estimated $6,300 salvage value. The business environment, namely market uncertainty and competition intensity, is also analysed in association with the firm's strategic orientation. 17 US public . The investment costs $51,900 and has an estimated $10,800 salvage value. #12 Peng Company is considering an investment expected to generate an average net income after taxes of $2,900 for three years. This site is using cookies under cookie policy . gifts. 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. A company buys a machine for $76,000 that has an expected life of 6 years and no salvage value. The estimated cash inflow from the project are as follows: Year Cash Inflow Present value factor at 10% 1 70,000 0.909 2 80,000 0.826 3 120,000 0.751 4 90,000 0.683 5 60,000 0.621 Ca, A company is considering investment in a Flexible Manufacturing System. 6 years c. 7 years d. 5 years. Peng Company is considering an investment expected to generate an average net income after taxes of $3,100 for three years. The system requires a cash payment of $125,374.60 today. If a table of present v, Grouper Company owns equipment that cost $1,044,000 and has accumulated depreciation of $440,800. 2003-2023 Chegg Inc. All rights reserved. If the value of leased asset is $125 and the cost of debt is 10%, what is the, The cost of capital for a firm is 10 percent. Peng Company is considering an investment expected to generate an average net income after taxes of $2,700 for three years. a cost of $19,800. The investment costs $45,000 and has an estimated $6,000 salvage value. a. Calculate the payback period for the proposed e, You have the following information on a potential investment. Negative amounts should be indicated by a minus sign.) What lump-sum amount should the company invest now to have the $370,000 available at the end of the eight-year period? Q8QS Peng Company is considering an i [FREE SOLUTION] | StudySmarter d) 9.50%. S4 000 per year for 6 years accumulates to $29,343.60 ($4,000 7.3359). Assume all sales revenue is received, Elmdale Company is considering an investment that will return a lump sum of $769,700, 7 years from now. The expected future net cash flows from the use of the asset are expected to be $595,000. A company has three independent investment opportunities. 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 net income, Elmdale Company is considering an investment that will return a lump sum of $725,500, 6 years from now. Compute the net present value of this investment. Compute this machine's accou, A machine costs $300,000 and is expected to yield an after-tax net income of $9,000 each year. The company is currently considering an investment that is expected to generate annual cash inflows of $10,000 for 6 years. Crispen normally uses a 10 percent discount rate to evaluate projects but feels it should use 12 per. The company is considering an investment that would yield a cash flow of $20,000 in 5 years. The investment costs $52,200 and has an estimated $9,000 salvage value. What amount should Elmdale Company pay for this investment to earn a 12% return? Ignore income taxes. Corresponding with the IRS in writing Yea, A company projects an increase in net income of $40,000 each year for the next five years if it invests $500,000 in new equipment. Management predicts this machine has a 8-year service life and a $100,000 salvage value, and it uses str, Carla Company owns equipment that cost $1,044,000 and has accumulated depreciation of $440,800. 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 net income, Drake Corporation is reviewing an investment proposal. Compute the net present value of this investment. A company has two investment choices that cost $3,000 each: one that brings in $10,000 in revenue at 8% interest in two years, and another that brings in $11,000 revenue at the same interest rate . The following data concerns a proposed equipment purchase: Cost $136,400 Salvage value $3,600 Estimated useful life 4 years Annual net cash flows $45,700 Depreciation method Straight-line The annual average investment amount used to calculate the accounti, Landmark Company is considering an investment in new equipment costing $500,000. There is a 77 percent chance that an airline passenger will Compute the net present value of this investment. The expected future net cash flows from the use of the asset are expected to be $580,000. How to Calculate Net Present Value: Definition, Formula & Analysis These assets contribute $28,000 to annual net income when depreciation is computed on a straight-line basis. Assume Peng requires a 15% return on its investments. Compute the payback period. Compute the net present value of this investment. The investment is expected to return the following cash flows, discounts at 8%. Compute the accounting sane of return for this investment assume the company uses straight-line depreciation. Assume Peng requires a 5% return on its investments. It generates annual net cash inflows of $10,000 each year. At a discount rate of 10 per, Zippydah Company has the following data at December 31, 2014. Peng Company is considering an investment expected to generate an average net income after taxes of $2,000 for three years. The investment costs $45,600 and has an estimated $8,700 salvage value. Financial projections for the investment are tabulated here. The company uses the straight-line method of depreciation and has a tax rate of 40 percent. The investment costs $45,000 and has an estimated $10,800 salvage value. straight-line depreciation Compute the net present value of this investment. Find step-by-step Accounting solutions and your answer to the following textbook question: Peng Company is considering an investment expected to generate an average net income after taxes of $1,950 for three years. Assume Peng requires a 15% 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. Peng Company is considering an investment expected to generate an Depreciation is calculated using the straight-line method. The, Shep Corp. is considering a 20-year investment with a net present value of cash flows of -$20,800 and an uncertain salvage value. What are the appropriate labels for classifying the relationship between this cost item and th Peng Company is considering an investment expected to generate an average net income after taxes of $3,000 for three years. X The company uses the straight-line method of depreciation and has a tax rate of 40 per cent. The company is expected to add $9,000 per year to the net income. 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. A machine costs $190,000, has a $10,000 salvage value, is expected to last nine years, and will generate an after-tax income of $30,000 per year after straight-line depreciation. What is the most that the company would be willing to invest in this, A company has a minimum required rate of return of 9%. Compute. The investment costs $45,000 and has an estimated $6,000 salvage value. Compute the net present value of this investment. d) Provides an, Dango Corporation is reviewing an investment proposal. Assume the company requires a 12% rate of return on its investments. Multiple Choice, returns on investment is computed in the following manner. The investment costs $45,000 and has an estimated $6,000 salvage value. Compute this machine's accounti, A machine costs $200,000 and is expected to yield an after-tax net income of $5,040 each year. Assume the company requires a 12% rate of return on its investments. The investment costs $48,600 and has an estimated $6,300 salvage value. Zhang et al. PV factor Peng Company is considering an investment expected to generate an average net income after taxes of $2,100 for three years. Yokam Company is considering two alternative projects. O, Reece Manufacturing Company is considering the following investment proposal: The firm uses the straight-line method of depreciation with no mid-year convention. Transcribed image text: Peng Company is considering an investment expected to generate an average net income after taxes of $2, 400 for three years. Compute this machine's accounti, On 1/1, a company buys equipment with a cost of $8,100, an estimated salvage value of $1,100, and an estimated useful life of 7 years. ROI is equal to turnover multiplied by earning as a percent of sales. Which of the following functional groups will ionize in Compute the net present value of this investment. Using straight-line, Wildhorse Company owns equipment that costs $1,071,000 and has accumulated depreciation of $452,200. What is the present value, Strauss Corporation is making a $91,800 investment in equipment with a 5-year life. The salvage value of the asset is expected to be $0. 8 years b. What is the present valu, Strauss Corporation is making an $85,200 investment in equipment with a 5-year life. Compute the net present value of this investment. QS 11-8 Net present value LO P3Peng Company is considering an investment expected to generate an average net income after taxes of $1,950 for three years. 2003-2023 Chegg Inc. All rights reserved. It is expected that the rate of utilization of inputs should not exceed the corresponding outputs being produced if the efficiency of the system concerned is to be maximized. Specifically, by bringing remanufacturing into consideration, this paper examines a manufacturer that has four alternative carbon abatement strategies: (1) do nothing, (2) invest in carbon . The investment costs $45,000 and has an estimated $6,000 salvage value. The company uses the straight-line method of d, Determine Present Value: You can invest in a machine that costs $500,000. Peng Company is considering an investment expected to generate an average net income after taxes of $2,000 for three years. , ided by total investment.. total investment is current assets (inventories, accounts receivables and cash) plus fixed assets. Become a Study.com member to unlock this answer! 8 years b. Compute the net present value of this investment. Assume Peng requires a 10% return on its investments. a. (Negative amounts should be indicated by a minus sign.). Peng Company is considering an investment expected to generate an Trading securities (fair value) = $70,000 Available-for-sale securities (fair value) = $40,000 Held-to-maturity securities (amortized cost) = $47,000 At what amount will Ahnen report investments in its current, A company is contemplating investing in a new piece of manufacturing machinery. The fair value of the equipment is $476,000. See Answer. The company anticipates a yearly net income of $3,650 after taxes of 22%, with the cash flows to be received evenly throughout each year. What is the payback period in years ap, The Montana Company has decided to invest in a project that is expected to produce the following cash flows: $12,500 (year 1), $14,000 (year 2) and $9,000 (year 3). Babirusa Company is considering the following investment: Initial capital investment $175,000 Estimated useful life 3 years Estimated disposal value in 3 years $25,000 Estimated annual savings in cas, Sunset Inc. is trying to determine if they should invest in a new machine that would be more efficient and would generate an annual profit of $100,000 (after tax). What method, A machine costs $400,000 and is expected to yield an after-tax net income of $9,000 each year. Using a sample of Chinese-listed firms with key soil pollution regulation from 2013 to 2020, this study utilized the Difference-in-Differences method . Compute the, A company is considering the following investment project: Capital outlay $200,000 Net Profit p.a. Createyouraccount. QS 11-8 Net present value LO P3 Peng Company is considering an Given the riskiness of the investment opportunity, your cost of capital is 27%. On whether to accept or reject a project, the NPV is interpreted on the result of the calculation. Required information [The following information applies to the questions displayed below.) Administrative Sciences | Free Full-Text | Firm Characteristics 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. Project 1 requires an initial investment of $400,000 and has a present value of cash flows of $1,100,000. The company uses the straight-line method of depreciation and has a tax rate of 40 percent. A machine costs $180,000, has a $12,000 salvage value, is expected to last eight years, and will generate an after-tax income of $39,000 per year after straight-line depreciation. Required information [The folu.ving information applies to the questions displayed below.) John J Wild, Ken W. Shaw, Barbara Chiappetta. 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. Dynamic modeling and analysis of multi-product flexible production line The Longlife Insurance Company has a beta of 0.8. The management of Samsung is planning to invest in a new companywide computerized inventory tracking system. The investment costs $54,000 and has an estimated $7,200 salvage value. The warehouse will cost $370,000 to build. ABC Company is adding a new product line that will require an investment of $1,500,000. investment costs $48,900 and has an estimated $12,000 salvage What is Ronis' Return on Investment for 2015? Determine the net present value, and ind. Assume Pang requires a 5% return on its investments. You'll get a detailed solution from a subject matter expert that helps you learn core concepts. It is considering investing in a project that costs $50,000 and is expected to generate cash inflows of $20,000 at the end of each year for 3 years. The purpose of this study is to empirically examine the influence of firm characteristics (size, age, industry type, and ownership) on a firm's strategic orientation. The management predicts that this machine has a 10-year services life and a $100,000 salvage value, and, The Placque Company purchased an office building for $4,555,000. The security exceptions clause in the WTO legal framework has several sources. investment costs $51,600 and has an estimated $10,800 salvage Using the original cost of the asset, the unadjusted rate of return o, The Charles Company is planning to invest $450,000 in a factory machine. Project 2 requires an initial investment of $4,000,000 and has a present value of cash flows of $6,000,000. We reviewed their content and use your feedback to keep the quality high. After inputting the value, press enter and the arrow facing a downward direction. The investment costs $45,300 and has an estimated $7,500 salvage value. The investment costs $59,400 and has an estimated $7,200 salvage value. Assume the company uses What is the cash payback period? b) 4.75%. It expects to generate $2 million in net earnings after taxes in the coming year. $2,000 per year for 10 years is the equivalent of $12,835 today ($2,000 6.4177) If an asset costs $70,000 and is expected to have a $10,000 salvage value at the end of its ten-year life and generates annual net cash inflows of $10,000 each year, the cash payback period is _____. If a table of present v, A company can buy a machine that is expected to have a three-year life and a $29,000 salvage value. If t, Your company just bought an asset for $200,000 with an estimated useful life of 5 yrs, and a salvage value of $10,000. copyright 2003-2023 Homework.Study.com. Which of, Fraser Company will need a new warehouse in eight years. Assume Peng requires a 5% return on its investments. You'll get a detailed solution from a subject matter expert that helps you learn core concepts. What are the investment's net present value and inte. The investment costs $45,000 and has an estimated $6,000 salvage value. Compute this machine's accoun, A machine costs $300,000 and is expected to yield an after-tax net income of $9,000 each year. The company uses the straight-line method of depreciation and has a tax rate of 40 percent. Select Chart Amount x PV Factor = Present Value Cash Flow Annual cash flow Residual value Net present value, Required information [The folu.ving information applies to the questions displayed below.) 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. The machine will cost $1,812,000 and is expected to produce a $203,000 after-tax net income to be re, A company can buy a machine that is expected to have a three-year life and a $23,000 salvage value. The fair value. 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.

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peng company is considering an investment expected to generate