The income tax depreciation method referred to as CCA: a) Allows a corporation some flexibility in choosing the class an asset is assigned to. and EVA of S1) (Use appropriate factor(s) from the tables provided. The company uses the straight-line method of depreciation and has a tax rate of 40 percent. What is the NPV of the investment, The Zinger Corporation is considering an investment that has the following data: Year 1 Year 2 Year 3 Year 4 Year 5 Investment $8,000 $3,000 Cash inflow $2,000 $2,000 $5,000 $4,000 $4,000 Cash inflows occur evenly throughout the year. Compute the net present value of each potential investment. Select chart 2.3 Reverse innovation. The company's required, A company is considering a proposal that requires an initial investment of $91,100, has predicted net cash inflows of $30,000 per year for four years and no salvage value. The company uses the straight-line method of depreciation and has a tax rate of 40 percent. The investment costs $52,200 and has an estimated $9,000 salvage value. Compute the net present value of this investment. Assume the company requires a 12% rate of return on its investments. distributed with a mean of 78 when mixing oil and water is the change in entropy positive or a) construct an influence diagram that relates these variables Peng Company is considering an investment expected to generate an average net income after taxes of $2,200 for three years. Everything you need for your studies in one place. For (n= 10, i= 9%), the PV factor is 6.4177. Compute the net present value of this investment. The cost of the asset is $120,000, Babirusa Company is considering the following investment: Assume straight-line depreciation is used. Assume the company uses straight-line . Accounting Rate of Return = Net Income / Average Investment. The investment costs $45,600 and has an estimated $8,700 salvage value. Assume Peng requires a 5% return on its investments. Compute the net present value of this investment. Assume Peng requires a 5% return on its investments. If a table of present v, Grouper Company owns equipment that cost $1,044,000 and has accumulated depreciation of $440,800. What is the minimum salvage value that would make the investment attractive assuming a discount rate of 12%? We reviewed their content and use your feedback to keep the quality high. View some examples on NPV. The investment costs$45,000 and has an estimated $6,000 salvage value. The payback period, You are considering investing in a start up company. During those years the company has been profitable, and it expects to continue to be profitable in the foreseeable future. The investment costs $45,000 and has an estimated $6,000 salvage value. Fair value method c. Historical cost m, Blue Fin Inc. requires all capital investments to generate a minimum internal rate of return of 15%. Assume the company uses straight-line . The initial cost and estimates of the book value of the investment at the end of the year, the net cash flows for each year, and the net income, Crane Company is considering an investment that will return a lump sum of $898, 900, 6 years from now. What is the accounting rate of return? Currently, U.S. Treasury bills are yielding 6.75% and the expected return for the S & P 500 is 18.2%. Compute the net present value of this investment. 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. S4 000 per year for 6 years accumulates to $29,343.60 ($4,000 7.3359). What is the depreciation expense for year two using the straight-line method? A company is deciding to invest in a new project at a cost of $2 million dollars. 2003-2023 Chegg Inc. All rights reserved. Assume Peng requires a 5% return on its investments. The company anticipates a yearly net income of $3,800 after taxes of 16%, with the cash flows to be received evenly throughout each year. Goodwill. 8. 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. Peng Company is considering an investment expected to generate an average net income after taxes of $2, 400 for three years. We reviewed their content and use your feedback to keep the quality high. 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. The system, A machine costs $700,000 and is expected to yield an after-tax net income of $30,000 each year. Accounting Rate of Return Choose Numerator: Choose Denominator: Accounting Rate of Return nnual after-tax net incomeAnnual average investentAccounting rate of return 3,500S 27,1501= 12.891 % value. The firm is in, A large, profitable corporation with net income exceed $20 million is considering the installation of a new machine that cost $100,000 with the expected salvage value of $20,000 after 4 years of usefu, A company buys a machine for $69,000 that has an expected life of 7 years and no salvage value. The fair value. Question. The amount to be invested is $100,000. Compute the accounting sane of return for this investment assume the company uses straight-line depreciation. The company anticipates a yearly net income of $3,300 after taxes of 38%, with the cash flows to be received evenly throughout each year. 2003-2023 Chegg Inc. All rights reserved. Assu, Peng Company is considering an investment expected to generate an average net income after taxes of $3,000 for three years. The net income after the tax and depreciation is expected to be P23M per year. The company's required r, Strauss Corporation is making an $85,900 investment in equipment with a 5-year life. If the accounting ra, A company buys a machine for $76,000 that has an expected life of 7 years and no salvage value. The company s required rate of return is 13 percent. The estimated cash flow for the investment are as follows: N Description Cash flow ($) 0 price of the system Fo 1-4 revenue per, Joe Sixpack Inc. is considering an investment that will cost is $400,000. The company has projected the following annual for the investment. 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. Capital investment - $15,000 Estimated useful life - 3 years Estimated salvage value - zero Estimated net cash inflow Year 1 - $7,000 Year, A company bought a machine that has an expected life of 7 years and no salvage value. The net cash flows are estimated to be $7,610 per year for the next 5 years and no salvage value is anticipated. The investment costs $45,600 and has an estimated $6,600 salvage value Compute the accounting rate of return for this investment, assume the company uses straight-line depreciation. Compute this machine s accoun, A machine costs $700,000 and is expected to yield an after-tax net income of $52,000 each year. check bags. Using the original cost of the asset, what will be the unadjusted rat, A company can buy a machine that is expected to have a three-year life and a $31,000 salvage value. Required information Use the following information for the Quick Study below. There is a 77 percent chance that an airline passenger will (Round your computations and answers to 0 decimal p, BAP Corporation is reviewing an investment proposal. 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. Management predicts this machine has an 11-year service life and a $60,000 salvage value, and it uses straight-line depreciation. To find the NPV using a financial calacutor: 1. Assume Peng requires a 5% return on its investments. t, A machine costs $380,000, has a $20,000 salvage value, is expected to last eight years, and will generate an after-tax income of $60,000 per year after straight-line depreciation. Peng Company is considering an investment expected to generate an average net income after taxes of $3,000 for three years. Required: Prepare the, X Company is thinking about adding a new product line. Compute the payback period. Learn about what net present value is, how it is calculated both for a lump sum and for a stream of income over multiple years. Assume Peng requires a 15% return on its investments. The cost of capital is 6%. The investment costs $45,000 and has an estimated $6,000 salvage value. 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.