Compute the net present value of each project

Assignment Help Accounting Basics
Reference no: EM131820364

Question - Jack's Custom manufacturing Company is considering three new projects, each requiring an equipment investment of $21,000. Each project will last for 3 years and produce the following net annual cash flows

Year AA BB CC

1 $7,000 $9,500 $13,000

2 9,000 9,500 10,000

3 15,000 9,500 11,000

Total $31,000 $28,500 $34,000

The equipment's salvage value is zero, and jack uses straight-line depreciation. Jack will not accept any project with a cash payback period over 2 years. Jack's required rate of return is 12%.

Compute the net present value of each project. Does your evaluation change? (Round to nearest dollar.)

Reference no: EM131820364

Questions Cloud

What is canteen total us gross income : Canteen received only $8000 in cash as a result of the dividend. What is Canteen's total US gross income reported as a result of the $8000 cash dividend
People learn about accord and satisfaction they wonder : Often when people learn about accord and satisfaction they wonder whether someone could use it to pay off a credit card.
Why were the talents distributed based upon ability : Why were the talents distributed based upon ability? Why are we to be faithful in a little before we can be entrusted with much?
Discuss selloane about the car that is now sold : Limpho wins a lottery of $1 000,000,she decides to buy herself a new Range Rover for $850,000 and takes it to church for the pastor to pray
Compute the net present value of each project : The equipment's salvage value is zero, and jack uses straight-line depreciation. Compute the net present value of each project
Why will any portion of terrys transfer be classified : Why will any portion of Terry's transfer be classified as a gift of a present interest? Does gift splitting seem to be advisable?
Identify one group of stakeholders in curriculum development : How could you include your identified group of stakeholders in curriculum development for a program in your area of interest?
Compute austin company rate of return on stockholder equity : Compute Austin Company's rate of return on common stockholders' equity for 2016. Assume the company paid the minimum preferred dividend during 2016.
Estimating waste transfer station delays using gps : The paper referenced in Example 7.30 ("Estimating Waste Transfer Station Delays Using GPS," Waste Management [2008]: 1742-1750) describing processing

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

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!

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