### What is the investments net present value

Assignment Help Accounting Basics
##### Reference no: EM13120939

Robert Huft retires in 6 years. He would have to purchase equipment costing \$590,000 to equip the outlet. Other outlets in the fast food chain have an annual net cash inflow of about \$140,000. Mr. Anders would close the outlet in 6 years. He estimates that the equipment could be sold at that time for about 10% of its original cost. Mr. Huft's required rate of return is 8%

Required:

1. What is the investment's net present value?
2. Is this an acceptable investment?
3. What is the most he should invest?

#### Questions Cloud

 Planned detection risk-inherent risk-control risk : What do following risk categories mean - planned detection risk, inherent risk, control risk, acceptable audit risk? Examples? How do we as auditors deal with them? Mathematical expression for probability density function : The weight of a .5 cubic yard bag of landscape mulch in uniformly distributed over the interval from 38.5 to 41.5 pounds. Give a mathematical expression for the probability density function. What is the probability of getting three primes : Assume that 10% of the population is left-handed. If three people are chosen at random, what is the probability that at least one will be left-handed? What is the investments net present value : Robert Huft retires in 6 years. He would have to purchase equipment costing \$590,000 to equip the outlet. Other outlets in the fast food chain have an annual net cash inflow of about \$140,000. Mr. Anders would close the outlet in 6 years. He estim.. Understanding the clients business : It is necessary for the auditor to understand the client's business. Why is that the case? How does classifying the client into a safe or risky client affect the audit? What is the probability of getting an a on the paper : What is the probability of getting an A on the paper? What is the probability of getting an A on the exam? Determine exact probability of creating a mini license : List the sample space. Determine the exact probability of creating a mini license plate with an E. Give solution exactly in reduced fraction form. Domain and lagrange multipliers : State the largest possible domain for the definition of the function. f(x,y) = cube-root(y^2-x)

### Write a Review

#### Prepare journal entries of sigfried company

Sigfried Company borrows \$60,000 on July 1 from the bank by signing a \$60,000, 10%, one-year note payable. Prepare the journal entry to record the proceeds of the note.

#### Create an approach to tax research that results in credible

Using the Internet or Strayer databases, research the rules regarding the transfer of property and services to a corporation in exchange for stock. Include a review of the IRS to determine its level of interest and audits conducted related to this..

#### Preparation of single step and multi step income statement

The accountant of Whitney Houston Shoe Co. has compiled the following information from the company's records as a basis for an income statement for the year ended December 31, 2007- Prepare a multiple-step income statement. Prepare a single-step in..

#### Cost of carbonated beverages

How would the concepts of utility, income, and substitution impact your purchases based on the rise in the cost of carbonated beverages?

#### Quantitative analysis for management-statistical analysis

What is the maximum revenue per year, how many medical patients/year are there, and how many surgical patients/year are there? How many medical beds and how many surgical beds of the 90-bed addition should be added?

#### Foreign competitors profitably

How could the foreign competitors profitably sell a similar product for less than manufacturing costs to Houston Electronic?

#### Goals of financial management

Explain the goals of financial management. The description must include how earnings are valued, how shareholder wealth can be maximized, and how management decisions affect stockholder wealth.

#### Accounting cycle and 4 types of financial statements

Define basic accounting concepts, terminology and transactions. Illustrate the accounting cycle. Describe the four types of financial statements. Explain the importance of ethics in accounting and financial decision making.

#### Computing costs for university cafe

The University Café has seen sales drop since classes have been scheduled during the noon hour and only 5 minutes between classes. Students don't have enough time to choose from the buffet line.

Which of the following would be considered "constuctively received?"

#### Design and implement a job costing system

discuss ways in which the company you researched could best use job costing information to design and implement a job costing system

#### Notes payable and accured interest

Mikor has an account payable of 7,700\$ due to Smiley Inc. one of its suppliers. The amount was due to be paid on October 15, 2007. Use the horizontal model, or write the journal entry to show the effect of :