What is the project SVNOT of our PP&E if we bought itfor $100,000 today, sell it for $50,000 in 3 years, taxrate of 20% and drepreciation schedule is20%, 25%, 25%, 10%, 10%, 10% over 6 years?

Given:- Initial cost of PP&E: $100,000- Salvage value after 3 years: $50,000- Tax rate: 20%-…

Answered: What is the project SVNOT of our PP&E…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 19EA: Redbird Company is considering a project with an initial investment of $265,000 in new equipment...

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Redbird Company is considering a project with an initial investment of $265,000 in new equipment that will yield annual net cash flows of $45,800 each year over its seven-year life. The companys minimum required rate of return is 8%. What is the internal rate of return? Should Redbird accept the project based on IRR?
Mason, Inc., is considering the purchase of a patent that has a cost of $85000 and an estimated revenue producing lite of 4 years. Mason has a required rate of return that is 12% and a cost of capital of 11%. The patent is expected to generate the following amounts of annual income and cash flows: A. What is the NPV of the investment? B. What happens if the required rate of return increases?
• EXAMPLE: A new machine will be purchased for 150000 TL and sold for 30000 TL at the end of 5 years. An annual income of 75000 TL will be provided. Expected rate of return on investment • 40% Determine annual depreciation amount Analyze the pre-tax economics of the investment If • the income tax rate is 25%, analyze the after-tax economics of the investment
A project generates same amount of revenue annually for 5 years, then its value is OMR, If the net present value for the project is OMR 150000 and the present value of total expenses is OMR 125000. Assume interest rate 10% p.a Select one: O a. 40263 O b. 72544 O c. 25000 O d. 275000
You are promised an 8 year streams of income from buying a new technology at the initial amount of P 40,000.00. If the income increases by 3%, 4%, 5% and 6% respectively from the 2nd to 5th year then return to initial amount from the 6th to the 8th year, what is the present value of stream of income if the current interest prevailing is 6.5%?
1. You are promised an 8-year streams of income from buying a new technology at the initial amount of P 40,000.00. If the income increases by 3%, 4%, 5% and 6% respectively from the 2nd to 5th year then return to initial amount from the 6th to the 8th year, what is the present value of stream of income if the current interest prevailing is 6.5%? 2. You bought a new machine worth P 345,000.00. Research on this machine showed that it will reduce cost of production in the following sequence: Year 1 = P 22,500; Year 2 = P27,300; Year 3 = 30,500.00; Year 4 = 32,450 and Year 5 = 29,600. If the current interest rate is 7.2%. Should the machine be bought?
A project requires you to invest $10,000 now, will generate annual revenues of $1500 for 10 years and will have a salvage value of $800 at the end of year 10. If your MARR is %10 per year, is this project acceptable? Select one: O a. Yes, and its PW=$1525.3 O b. No, and its PW =-$1474.7. O c. Yes, and its PW=$525.3 O d. No, and its PW =-$474.7
1. What is the future worth 6 years from now of a present cost of P175,000 to Corning, Inc. at an interest rate of 10% per year?
Given the initial investment in a factory processing equipment as Ghc500,037. Let the opportunity cost of capital for the industry be 10% p.a. Assuming that the equipment is capable of generating an after-tax returns of Ghc115,000 for the first 5 years and Ghc65000 for the 6 year and Ghe53400 for the 7th year. a. Find the Net Present Value (NPV) b. Detemine the Internal Rate of Return c. Identify three ways in which the Net Present value is superior to the Internal Rate of return as investment criteria
A project requires you to invest $10,000 now, will generate annual revenues of $1500 for 10 years and will have a salvage value of $800 at the end of year 10. If your MARR is %10 per year, is this project acceptable? Select one: a. Yes, and its PW=$525.3 X b. No, and its PW =-$1474.7. c. Yes, and its PW=$1525.3 d. No, and its PW =-$474.7
XYZ is evaluating a project that would last for 3 years. The project's cost of capital is 15.60 percent, its NPV is $43,200.00 and the expected cash flows are presented in the table. What is X? Years from today 0 1 2 3 Expected Cash Flow (in $) -55,800 71,000 -15,900 X O An amount less than $43,200.00 or an amount greater than $82,666.00 O An amount equal to or greater than $70,205.00 but less than $82,666.00 O An amount equal to or greater than $60,505.00 but less than $70,205.00 O An amount equal to or greater than $53,257.00 but less than $60,505.00 O An amount equal to or greater than $43,200,00 but less than $53,257.00 M
Judson's cost of capital is 12%, what is the DISCOUNTED Payback Period for the project? Year Cash Flow in $ 0 ($1000) 1 400 2 400 3 600

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What is the project SVNOT of our PP&E if we bought it for $100,000 today, sell it for $50,000 in 3 years, tax rate of 20% and drepreciation schedule is 20%, 25%, 25%, 10%, 10%, 10% over 6 years?