User Account

All Pages

What is the payback period

Assignment Help Accounting Basics
Reference no: EM131718957

Question - SIFT company is contemplating the purchase of a large piece of machinery for$80000. SIFT anticipates that the machine will have a six year life; have annual cash inflows of $20000 and a salvage value (at end year six) 0f $10000. SIFT assigns a cost of capital or minimum rate of return of12% for the project. Ignore income taxes.

a) What is the payback period?

b) What is the internal rate of return? (note: for part [b] ONLY, ignore salvage value)

c) What is the net present value?

d) What is the present value index?

e) Based on your answers to [c] ands [d], should SIFT buy the machinery? Why or why not?

Reference no: EM131718957

Questions Cloud

Different kinds of visual aids used in a business context : Create a portfolio of at least eight different kinds of visual aids used in a business context.
Time in queue plus processing time : Sadie works as an electronics design engineer in a major corporation. What is Sadie's average lead time (time in queue plus processing time)?
Compute the dividends per share on each class of stock : Compute the dividends per share on each class of stock (preffered and Common) for each of the four years. Round all answers to two decimal places
Discuss the advantages and disadvantages of each method : Discuss the advantages and disadvantages of each method (CT scans, MRIs, SPECT, and PET scans).
What is the payback period : SIFT company is contemplating the purchase of a large piece of machinery for$80000. What is the payback period
Epidemic depression and mental health : HCA415 - Community and Public Health Imagine you are in charge of your local health department - You have found that your community has an epidemic
Determine the median response for each sex : Students in a statistics class at Penn State were asked, "About how many minutes do you typically exercise in a week?" Responses from the women in the class.
Disadvantages of using digital x-rays in dentistry : What are the advantages and disadvantages of using digital X-rays in dentistry?
Organizations most commonly used in health care today : Class, discuss some of the standards development organizations most commonly used in health care today.

Reviews

Write a Review

Accounting Basics Questions & Answers

  The company expects to sell 12 of its merchandise for cash

petjoy wholesale inc. a pet wholesale supplier was organized on march 1 2014. projected sales for each of the first

  On january 2 2013 machinery and equipment were purchased at

the plant asset and accumulated depreciation accounts of pell corporation had the following balances at december 31

  The ending inventory shown in the trial balance

On September 30, 20X8, Wilfred Company sold inventory to Jackson Corporation, its Canadian subsidiary. The goods cost Wilfred $30,000 and were sold to Jackson for $40,000, payable in Canadian dollars. The goods are still on hand at the end of the ..

  Member of the project approval committee

Imagine you are a member of the project approval committee.- With a wink, he promises to "owe you one." What would you say to him and why?

  The start of negotiations

Bass Ltd has recently undertaken a Business Combination with Bream Ltd. At the start of negotiations, Bass Ltd owned 30% of the shares of Bream Ltd

  Suppose your company paid 12000 in cash for its rent how

suppose your company paid 12000 in cash for its rent. how does this transaction impact the accounting

  Find relation between tolerable misstatement, inherent risk

How do the calculation and comparison to previous years of the gross margin percentage and the ratio of accounts receivable to sales are related to the conformation of accounts receivable and other tests of the accuracy of accounts receivable?

  Calculate break-even in units and sales for the company

Prepare three Cost Volume Profit (CVP) Income Statements using the following yearly volumes: 1,500, 2,000 and 2,400

  Following shareholders equity section of the balance sheet

They pay $ 30.00 per share. With this purchase, the impact on Total Paid-in Capital and the total Shareholders Equity, respectively, will be:a. increase/increaseb. decrease/decreasec. increase/decreased. decrease/increasee. none/decrease

  Why do we need to refunds of excess application money

Maple Ltd was registered on 1 March 2017. Why do we need to refunds of excess application money to successful application

  Calculate the stock price of shares

You own 500 shares of Ups & Downs, Inc., stock. It is currently priced at $50. You are going on vacation, and you realize that the company will be reporting.

  Kindergarten teachers paid salaries

This estimate doesn't take into account social gains, like better health and less crime." Why are even standout kindergarten teachers paid salaries much lower than $320,000?

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