User Account

All Pages

Calculate the net present value on project

Assignment Help Accounting Basics
Reference no: EM13531013

Benjamin Box Corporation is considering adding another machine for the manufacture of corrugated cardboard. The machine would cost $700,000. It would have an estimated life of 6 years and no salvage value. The company estimates that annual cash inflows would increase by $300,000 and that annual cash outflows would increase by $140,000. Management has a required rate of return of 9%.

(a) Calculate the net present value on this project, and discuss whether it should be accepted.

(b) Calculate the internal rate of return on this project, and discuss whether it should be accepted.

Reference no: EM13531013

Questions Cloud

What is the present value of the retreading operation : Mark hopes to earn a return of 10 percent on such investments. What is the present value of the retreading operation? Should Mark purchase the retreading machine?
Calculate the annual rate of return : The oil well will cost $490,000 and will have a $10,000 salvage value at the end of its 10-year useful life. Calculate the annual rate of return.
Show whether the eagle line should be eliminated : If the Eagle line is eliminated, $34,000 of fixed costs will remain. Prepare an analysis showing whether the Eagle line should be eliminated.
Compute annual rate of return and the cash payback period : The purchase of the equipment should increase net income by $40,000 each year for 5 years. (a) Compute the annual rate of return. (b) Compute the cash payback period.
Calculate the net present value on project : Calculate the net present value on this project, and discuss whether it should be accepted and calculate the internal rate of return on this project, and discuss whether it should be accepted.
What is its approximate internal rate of return : The machine will cost $170,000, has an estimated useful life of 7 years, a salvage value of zero, and will increase net annual cash flows by $33,740. What is its approximate internal rate of return?
Determine the net present value - gamma company : Gamma Company accumulates the following data concerning a proposed capital investment: cash cost $225,000, net annual cash flow $34,000, present value factor of cash inflows for 10 years 6.71 (rounded). Determine the net present value, and indicat..
Classifications of current assets : Prepare a classified balance sheet in report form. For assets, use the classifications of current assets, plant and equipment, and other assets. For liabilities, use the classifications of current liabilities and long-term liabilities.
Prepare a classified balance sheet in report form : The information was obtained from the accounts of Airlines International dated December 31, 2000. It is presented in alphabetical order

Reviews

Write a Review

Accounting Basics Questions & Answers

  The security is to be held short-term profits

Purchased $100,000 of U.S. Treasury 6% bonds, paying 102 plus accrued interest of $1000. The security is to be held short-term profits.

  What is a committed fund balance in a governmental funds

What is a committed fund balance in a governmental funds balance sheet? How does it differ from a restricted fund balance?

  What is the primary difference between agency funds and

what is the primary difference between agency funds and trust funds? what are the primary applications of each and how

  Yuve finally saved 10000 and are ready to make your first

youve finally saved 10000 and are ready to make your first investment. youve the three following alternatives for

  The partnership agreement of jones king and lane provides

the partnership agreement of jones king and lane provides for the annual allocation of thebusinesss profit or loss in

  Acme co is considering two options for acquiring a new

acme co. is considering two options for acquiring a new company car. details on the two options areoption 1. lease the

  Describes events and transactions

Includes all changes in stockholders' equity during a period except those resulting from investments by stockholders and distributions to stockholders.

  Calculate the estimated cost of indirect supplies

Calculate the estimated cost of indirect supplies and explain briefly what the value of the coefficient of determination

  Indicate how each of the following six different

indicate how each of the following six different transactions that dynamic mattress might make would affect i cash and

  By what operating statement of enterprise fund not impacted

On the following facts about an Enterprise Fund for a utilityoperation: The operating statement of the Enterprise Fund would not be directly impacted by

  Fair market value of the house

Jose purchased a house for $175,000 in 2005. He used the house as his personal residence. In March 2008, when the fair market value of the house was $255,000, he converted the house torental property.

  Solve capital projects fund homework problem

The township authorized a bond issue of $11 million for the construction of a pedestrian walkway as part of a downtown revitalization project. An additional $1 million of general revenues is to be used for the project. The authorization was record..

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