User Account

All Pages

Calculate the net present value of purchasing

Assignment Help Accounting Basics
Reference no: EM131702026

Question - Farrior Fashions needs to replace a beltloop attacher that currently costs the company $40,000 in annual cash operating costs. This machine is of no use to another company, but it could be sold as scrap for $2,160. Managers have identified a potential replacement machine, Euromat's Model HD-435.

The HD-435 is priced at $48,720 and would cost Farrior Fashions $30,000 in annual cash operating costs. The machine has a useful life of 11 years, and it is not expected to have any salvage value at the end of that time.

Required

a. Calculate the net present value of purchasing the HD-435, assuming Farrior Fashions uses a 14% discount rate.

b. Calculate the internal rate of return on the HD-435.

c. Calculate the payback period of the HD-435.

d. Calculate the accounting rate of return on the HD-435.

e. Should Farrior Fashions purchase the HD-435? Why or why not?

Reference no: EM131702026

Questions Cloud

What did geek inc report as beginning retained earnings : The company also declared and paid $54,000 dividends in 2015. What did Geek, Inc report as beginning retained earnings for 2015
How much did the cookie company pay for supplies : The Cookie Company was incorporated on January 1, 2015. In January, how much did The Cookie Company pay for supplies
Project is being promoted as win-win project for all parties : The PGEP-Payatas project is being promoted as a win-win project for all parties involved. Is that an accurate assessment? Why or why not?
Calculate the beta for chicago steel works : The change in the value of New England Electric Inc. over the last two years is as follows: Calculate the Beta for Chicago Steel Works? What does this mean
Calculate the net present value of purchasing : Calculate the net present value of purchasing the HD-435, assuming Farrior Fashions uses a 14% discount rate
Made to improve the overall security posture : What are the reasons you feel the asset or resource is not adequately protected and what changes can be made to improve the overall security posture?
Learning curve model of this production line : What is the K for the learning curve model of this production line?
Determine the unit product cost : Job #461 contained 100 units. Determine the unit product cost that would appear on the job cost sheet. Determine the underapplied or overapplied overhead
Produced to meet the global demand : What types of aircraft and fleets have been produced to meet the global demand? Are legacy airlines making larger orders?

Reviews

Write a Review

Accounting Basics Questions & Answers

  Ku inc operates a store featuring school merchandise it

ku inc. operates a store featuring school merchandise. it uses an eoq decision model to make inventory decisions. it is

  On december 31 2013 gifts galore inc suitably changed its

on december 31 2013 gifts galore inc. suitably changed its inventory valuation method from weighted-average cost to

  What is the difference between realized and realizable

What is the difference between realized and realizable? Give an example of where the concept of realizable is used to recognize revenue.

  Discuss the three primary styles of leadership

Identify and discuss the five most important factors that determine the price of your automobile insurance and explain what type of discounts can help reduce this expense.

  Marcys cumulative earnings before this pay period were

marcys cumulative earnings before this pay period were 6200 and gross for this week is 500. how much of this weeks pay

  Consider a bank where potential customers arrive

Consider a bank where potential customers arrive at rate of 60 customers per hour. However, because of limited space, one out of every four arriving customers finds the bank full and leaves immediately (without entering the bank).

  What do you understand by archival research

What do you understand by Archival Research? Explain Quasi-experimental research. What do you understand by Cross-sectional data and Time series data?

  The costs are assigned to two cost pools one for fixed and

apex companys copy department which does almost all of the photocopying for the sales department and the administrative

  Which items is most likely to appear on a balance sheet

Which of these items is most likely to appear on a balance sheet? Which of the following represents the correct order (from left to right) for the items shown?

  Hazardous toys company produces boomerangs that sell for

hazardous toys company produces boomerangs that sell for 8each and have a variable cost of 7.50. fixed costs are

  What should be hathaway net operating income

What should be hathaway's net operating income in April based on a flexible budget?

  Compute the amount of gross profit realized each year

on january 1 2010 wetzel company sold property for 200000. the note will be collected as follows 101800 in 2010 61800

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd