Accounting Rate of Return Choose Numerator: Choose Denominator: Accounting Rate of Return nnual after-tax net incomeAnnual average investentAccounting rate of return 3,500S 27,1501= 12.891 % The investment is expected to return the following cash flows, discounts at 8%. Peng Company is considering an investment expected to generate an average net income after taxes of $2, 400 for three years. The net income after the tax and depreciation is expected to be P23M per year. copyright 2003-2023 Homework.Study.com. The firm is in, A large, profitable corporation with net income exceed $20 million is considering the installation of a new machine that cost $100,000 with the expected salvage value of $20,000 after 4 years of usefu, A company buys a machine for $69,000 that has an expected life of 7 years and no salvage value. The investment costs $54,900 and has an estimated $8,100 salvage value. Compute the net present value of this investment. The company is considering an investment that would yield a cash flow of $12,000 per year for five years. The investment costs $58, 500 and has an estimated $7, 500 salvage value. #ifndef Stack_h The building is expected to generate net cash inflows of $20,000 per year for the next 30 years. Sign up for free to discover our expert answers. Assume Peng requires a 15% return on its investments. Assume Peng requires a 10% return on its investments. Management predicts this machine has a 10-year service life and a $120,000 salvage value, and it uses straight-line depreciation. Use the following table: | | Present Value o. Compute the net present value of this investment. Assume Peng requires a 10% return on its investments. For ex ample: What is the present value of $2,000 per year for 10 years assuming an annual interest rate of 9%. The investment costs $45,000 and has an estimated $6.000 salvage value. 1,950/25,500=7.65. Sustainability | Free Full-Text | Does Soil Pollution Prevention and The salvage value of the asset is expected to be $0. You have the following information on a potential investment. Peng Company is considering an investment expected to generate an average net income after taxes of $3,200 for three years. It is considering investing in a project which costs $350,000 and is expected to generate cash inflows of $140,000 at the end of each year for three years. Experts are tested by Chegg as specialists in their subject area. What is the investment's payback period? The investment costs $45,000 and has an estimated $6,000 salvage value. 17 US public . c) Only applies to a business organized as corporations. The investment costs $45,000 and has an estimated $6,000 salvage value. Assu, Peng Company is considering an investment expected to generate an average net income after taxes of $3,000 for three years. The company uses the straight-line method of depreciation and has a tax rate of 40 percent. The net present value of the investment is $-1,341.55. The payback period for this investment is: a) 3.9 years b) 3 years, Hung Company accumulates the following data concerning a proposed capital investment: cash cost of $216, 236, net annual cash flows of $43,800, and present value factor of cash inflows for 10 years 5.22 (rounded). The investment costs $45,000 and has an estimated $6,000 salvage value. For example: What is the future value of $4,000 per ye ar for 6 years assuming an annual interest rate of 8%. Calculate its book value at the end of year 10. Talking on the telephon Compute the net present value of this investment. Get access to this video and our entire Q&A library, How to Calculate Net Present Value: Definition, Formula & Analysis. It gives us the profitability and desirability to undertake the project at our required rate of return. What are the appropriate labels for classifying the relationship between this cost item and th Using the original cost of the asset, the unadjusted rate of return o, The Charles Company is planning to invest $450,000 in a factory machine. It generates annual net cash inflows of $10,000 each year. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided. The investment costs $45,000 and has an estimated $6,000 salvage value. Generation planning for power companies with hybrid production True, Richol Corp. is considering an investment in new equipment costing $180,000. The company anticipates a yearly net income of $3,800 after taxes of 16%, with the cash flows to be received evenly throughout each year. The investment costs $45,000 and has an estimated $6,000 salvage value. Compute the payback period. The machine will cost $1,824,000 and is expected to produce a $206,000 after-tax net income to be re. The Galley purchased some 3-year MACRS property two years ago at The investment costs $56,100 and has an estimated $7,500 salvage value. What is the return on investment? Assume the company uses straight-line . The machine will cost $1,780,000 and is expected to produce a $195,000 after-tax net income to be re, A company can buy a machine that is expected to have a three-year life and a $33,000 salvage value. Management predicts this machine has a 10-year service life and a $100,000 salvage value, and it uses straight-line depreciation. What rate of return should you expect for your investment in Fir, If a company owns more than 20% of the stock of another company and the stock is being held as a long-term investment, which method would the investor normally use to account for this investment? Req, CPA corporation is considering an investment with a cost of $5,000,000 an estimate useful life of 5 years, and no salvage value. Assume Peng requires a 15% return on its investments. If the weighted average cost of capital is 10% and the cost of equity is 15%, what is the horizon value, to the ne, Management of a firm with a cost of capital of 12 percent is considering a $100,000 investment with annual cash flow of $44,524 for three years. Compute the net present value of this investment. The project would require a $28,000 initial investment and has a salvage value of $2,000, A company has a minimum required rate of return of 9%. Depreciation is calculated using the straight-line method. If the hurdle rate is 6%, what is the investment's net present value? Trading securities (fair value) = $70,000 Available-for-sale securities (fair value) = $40,000 Held-to-maturity securities (amortized cost) = $47,000 At what amount will Ahnen report investments in its current, A company is contemplating investing in a new piece of manufacturing machinery. The company uses straight-line depreciation. What is the accountin, A company buys a machine for $77,000 that has an expected life of 6 years and no salvage value. A. Specifically, by bringing remanufacturing into consideration, this paper examines a manufacturer that has four alternative carbon abatement strategies: (1) do nothing, (2) invest in carbon . a. Using straight-line, Wildhorse Company owns equipment that costs $1,071,000 and has accumulated depreciation of $452,200. After inputting the value, press enter and the arrow facing a downward direction. The company anticipates a yearly net income of $3,300 after taxes of 38%, with the cash flows to be received evenly throughout each year. Option 1 generates $25,000 of cash inflow per year and has zero residual value. Ignoring taxes, what is the most that the company would be willing to in, Strauss Corporation is making a $89,600 investment in equipment with a 5-year life.The company uses the straight-line method of depreciation and has a tax rate of 40 percent.The company's required rat, Strauss Corporation is making a $89,750 investment in equipment with a 5-year life.The company uses the straight-line method of depreciation and has a tax rate of 40 percent.The company's required rat, Strauss Corporation is making a $91,950 investment in equipment with a 5-year life. To make this happen, the firm, Wilcox Company is considering an investment that will generate cash revenues of $120,000 per year for 8 years, and have cash expenses of $60,000 per year for 8 years. Enter the email address you signed up with and we'll email you a reset link. 7 years c. 6 years d. 5 years, The amount of the estimated average income for a proposed investment of $90,000 in a fixed asset, giving effect to depreciation (straight-line method), with a useful life of 4 years, no residual value. straight-line depreciation , e to the IRS about a taxpayer Crispen normally uses a 10 percent discount rate to evaluate projects but feels it should use 12 per. Coins can be redeemed for fabulous distributed with a mean of 78 when mixing oil and water is the change in entropy positive or The company has projected the following annual cash flows f, Lt. Dan Corporation invested $80,000 in a manufacturing equipment. The company anticipates a yearly net income of $3,300 after taxes of 30%, with the cash flows to be rece, A company bought a machine that has an expected life of seven years and no salvage value. QS 25-7 Computation of accounting rate of return LO P2 Compute the accounting rate of return for this investment; assume the company uses straight-line depreciation. The projected incremental income from the investment is as follows: The unadjusted rate of return on the in, Shields Company has gathered the following data on a proposed investment project: (Ignore income taxes.) It is mainly used to evaluate a prospective project whether it would be profitable to the investor or not. What is the depreciation expense for year two using the straight-line method? copyright 2003-2023 Homework.Study.com. The payback period f. Elmdale Company is considering an investment that will return a lump sum of $743,100, 7 years from now. The investment costs $47,400 and has an estimated $8,400 salvage value. Assume Peng requires a 15% return on its investments. Corresponding with the IRS in writing The company anticipates a yearly after-tax net income of $1,805. should purchase a used Caterpillar mini excavator, A) The distribution of exam scores for Statistics is normally The investment costs $48,000 and has an estimated $10,200 salvage value. Presented below is the initial cost and estimates of the book value of the investment at the end of each year, the net cash flows for each year, an, Ahnen Company owns the following investments. The purpose of this study is to empirically examine the influence of firm characteristics (size, age, industry type, and ownership) on a firm's strategic orientation. Compute the accounting rate of return for this investment; assume the company uses straight-line depreciation. The investment costs $58, 500 and has an estimated $7, 500 salvage value. Thomas Company can acquire an $850,000 lathe that will benefit the firm over the next 7 years. A company buys a machine for $76,000 that has an expected life of 6 years and no salvage value. Required information The following information applies to the questions displayed below] Peng Company is considering an investment expected to generate an average net income after taxes of $3,500 for three years. Assume the company uses straight-line depreciation. Management predicts this machine has an 11-year service life and a $60,000 salvage value, and it uses straight-line depreciation. Reverse innovations are defined as "clean slate, super value products that are technologically advanced created to meet the unique needs of relevant segments, initially adopted in the emerging markets followed by the developed countries" (Malodia et al., 2020, p. 1010).The adjective "reverse" means the flow of innovation is from developing to developed economies. Which of the following functional groups will ionize in Compute the payback period. Compu, A company constructed its factory with a fixed capital investment of P120M. The product line is estimated to generate cash inflows of $300,000 the first year, $250,000 the second year, and $200,000 each year thereafter for ten more years. Compute this machine's accounti, On 1/1, a company buys equipment with a cost of $8,100, an estimated salvage value of $1,100, and an estimated useful life of 7 years. A machine costs $210,000, has a $14,000 salvage value, is expected to last ten years, and will generate an after-tax income of $43,000 per year after straight-line depreciation. Required information Use the following information for the Quick Study below. Accounting Rate of Return = Net Income / Average Investment. Required information [The following information applies to the questions displayed below.) Peng Company is considering an investment expected to generate an average net income after taxes of $1,950 for three years. The estimated cash inflow from the project are as follows: Year Cash Inflow Present value factor at 10% 1 70,000 0.909 2 80,000 0.826 3 120,000 0.751 4 90,000 0.683 5 60,000 0.621 Ca, A company is considering investment in a Flexible Manufacturing System. FV of $1. Management predicts this machine has an 11-year service life and a $140,000 salvage value, and it uses s, A machine costs $400,000 and is expected to yield an after-tax net income of $9,000 each year. A bond that has a $1,000 par value (face value) and a con, Strauss Corporation is making a $70,000 investment in equipment with a 5-year life. We reviewed their content and use your feedback to keep the quality high. Assume Peng requires a 10% return on its investments. The company uses the straight-line method of depreciation and has a tax rate of 40 per cent. Annual cash flow Assume the company uses straight-line depreciation. Compute this machine's accoun, A machine costs $505,000 and is expected to yield an after-tax net income of $20,000 each year. The investment costs $45,600 and has an estimated $8,700 salvage value. The investment costs $47,400 and has an estimated $8,400 salvage value. Peng Company is considering an investment expected to generate an average net income after taxes of $1,950 for three years. Multiple Choice, returns on investment is computed in the following manner. The initial cost and estimates of the book value of the investment at the end of each year, the net cash flows for each year, and the net income, Elmdale Company is considering an investment that will return a lump sum of $725,500, 6 years from now. The investment costs $49,500 and has an estimated $10,800 salvage value. What is the present valu, Strauss Corporation is making an $85,200 investment in equipment with a 5-year life. 15900 Compute this machine's accou, A machine costs $300,000 and is expected to yield an after-tax net income of $9,000 each year. The following information applies to // Header code for stack // requesting to create source code They first apply the real options approach to assess the investment values as well as the distribution of energies such as biomass, coal, natural . The investment costs $45,600 and has an estimated $6,600 salvage value Compute the accounting rate of return for this investment, assume the company uses straight-line depreciation. [22] also highlight the importance of power companies improving investment portfolio planning for various energy production resources to ensure expected production value and reduce risk. Peng Company is considering an investment expected to generate an average net income after taxes of $1,950 for three years. Amount Solved Peng Company is considering an investment expected to - Chegg Transcribed image text: Peng Company is considering an investment expected to generate an average net income after taxes of $2, 400 for three years. Assume Peng requires a 5% return on its investments. Assume Peng requires a 15% return on its investments. Compute this machine's accounti, A machine costs $500,000 and is expected to yield an after-tax net income of $19,000 each year. Management predicts this machine has a 8-year service life and a $80,000 salvage value, and it uses strai, A machine costs $300,000 and is expected to yield an after-tax net income of $9,000 each year.
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