1.)Orasco Company is considering purchasing new equipment for$352,657. It is expected that the equipment will produce net annualcash flows of $49,670 over its 10-year useful life. Annualdepreciation will be $35,266. Compute the cash payback period.(Round answer to 1 decimal place, e.g. 10.5.)
_____?___years
2.)Asaki Company accumulates the following data concerning aproposed capital investment: cash cost $210,840, net annual cashflows $40,000, present value factor of cash inflows for 10 years5.43 (rounded). Determine the net present value, and indicatewhether the investment should be made. (If the net present value isnegative, use either a negative sign preceding the number eg -45 orparentheses eg (45).)
Net present value $__________
Should the investment be made? No/Yes
3.)Neville Corporation, an amusement park, is considering a capitalinvestment in a new exhibit. The exhibit would cost $160,613 andhave an estimated useful life of 8 years. It will be sold for$70,800 at that time. (Amusement parks need to rotate exhibits tokeep people interested.) It is expected to increase net annual cashflows by $24,300. The company's borrowing rate is 8%. Its cost ofcapital is 10%. Calculate the net present value of this project tothe company. (If the net present value is negative, use either anegative sign preceding the number eg -45 or parentheses eg (45).Round computations and final answer for present value to 0 decimalplaces, e.g. 125. Round computations for Discount Factor to 5decimal places.)
$_____?_____
The project (is or not) acceptable.?
4.)Keane Bottling Corporation is considering the purchase of a newbottling machine. The machine would cost $205,217 and has anestimated useful life of 8 years with zero salvage value.Management estimates that the new bottling machine will provide netannual cash flows of $37,300. Management also believes that the newbottling machine will save the company money because it is expectedto be more reliable than other machines, and thus will reducedowntime. How much would the reduction in downtime have to be worthin order for the project to be acceptable? Assume a discount rateof 10%. (Hint: Calculate the net present value. If the net presentvalue is negative, use either a negative sign preceding the numbereg -45 or parentheses eg (45). Round computations and final answerfor present value to 0 decimal places, e.g. 125. Round computationsfor Discount Factor to 5 decimal places.)
$______________
1.)Orasco Company is considering purchasing new equipment for$352,657. It is expected that the equipment will produce net annualcash flows of $49,670 over its 10-year useful life. Annualdepreciation will be $35,266. Compute the cash payback period.(Round answer to 1 decimal place, e.g. 10.5.)
_____?___years
2.)Asaki Company accumulates the following data concerning aproposed capital investment: cash cost $210,840, net annual cashflows $40,000, present value factor of cash inflows for 10 years5.43 (rounded). Determine the net present value, and indicatewhether the investment should be made. (If the net present value isnegative, use either a negative sign preceding the number eg -45 orparentheses eg (45).)
Net present value $__________
Should the investment be made? No/Yes
3.)Neville Corporation, an amusement park, is considering a capitalinvestment in a new exhibit. The exhibit would cost $160,613 andhave an estimated useful life of 8 years. It will be sold for$70,800 at that time. (Amusement parks need to rotate exhibits tokeep people interested.) It is expected to increase net annual cashflows by $24,300. The company's borrowing rate is 8%. Its cost ofcapital is 10%. Calculate the net present value of this project tothe company. (If the net present value is negative, use either anegative sign preceding the number eg -45 or parentheses eg (45).Round computations and final answer for present value to 0 decimalplaces, e.g. 125. Round computations for Discount Factor to 5decimal places.)
$_____?_____
The project (is or not) acceptable.?
4.)Keane Bottling Corporation is considering the purchase of a newbottling machine. The machine would cost $205,217 and has anestimated useful life of 8 years with zero salvage value.Management estimates that the new bottling machine will provide netannual cash flows of $37,300. Management also believes that the newbottling machine will save the company money because it is expectedto be more reliable than other machines, and thus will reducedowntime. How much would the reduction in downtime have to be worthin order for the project to be acceptable? Assume a discount rateof 10%. (Hint: Calculate the net present value. If the net presentvalue is negative, use either a negative sign preceding the numbereg -45 or parentheses eg (45). Round computations and final answerfor present value to 0 decimal places, e.g. 125. Round computationsfor Discount Factor to 5 decimal places.)
$______________
Related questions
1 A) Hsung Company accumulates the following data concerning aproposed capital investment: cash cost $161,952, net annual cashflows $37,200, and present value factor of cash inflows for 10years 4.66 (rounded). (If the net present value isnegative, use either a negative sign preceding the number eg -45 orparentheses eg (45).)
Determine the net present value, and indicate whether theinvestment should be made.
Net Present Value: $___________
| The investment: should/should not be made. |
1 B) Rihanna Company is considering purchasing new equipment for$395,200. It is expected that the equipment will produce net annualcash flows of $52,000 over its 10-year useful life. Annualdepreciation will be $39,520. Compute the cash payback period.(Round answer to 1 decimal place, e.g.10.5.)
cash payback period ___________ years
