peng company is considering an investment expected to generate

You have the following information on a potential investment. 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. Accounting Rate of Return Choose Denominator: Choose Numerator: 7 = Accounting Rate of Return = Accounting rate of return, Required information [The following information applies to the questions displayed below.] ), The net present value of the investment is -$6,921. Assume the company uses A. What makes this potential investment risky? Select Chart Amount x PV Factor = Present Value Cash Flow Annual cash flow Residual value Net present value, Required information [The folu.ving information applies to the questions displayed below.) Everything you need for your studies in one place. View some examples on NPV. We reviewed their content and use your feedback to keep the quality high. Compute the net present value of this investment. To find the NPV using a financial calacutor: 1. The investment costs $45,000 and has an estimated $6,000 salvage value. It is expected that the rate of utilization of inputs should not exceed the corresponding outputs being produced if the efficiency of the system concerned is to be maximized. (1) Determine wheth, Dartis Company is considering investing in a specialized equipment costing $600,000. The investment costs $49,500 and has an estimated $10,800 salvage value. The company uses the straight-line method of depreciation and has a tax rate of 40 percent. The IRR on the project is 12%. Peng Company is considering an investment expected to generate an average net income after taxes of $2,900 for three years. Peng Company is considering an investment expected to generate an average net income after taxes Peng Company is considering an investment expected to generate an average net income after taxes of $1,950 for three years. You would need to invest S2,784 today ($5,000 0.5568). (Round your computations and answers to 0 decimal p, BAP Corporation is reviewing an investment proposal. The investment costs $48,600 and has an estimated $6,300 salvage value. The estimated life of the machine is 5yrs, with no salvage value. The management of Samsung is planning to invest in a new companywide computerized inventory tracking system. The investment costs $58, 500 and has an estimated $7, 500 salvage value. The project is expected to have an after-tax return of $250,000 in each of years 1 and 2. Melton Company's required rate of return on capital budgeting projects is 16%. The building has an estimated useful life of 40 years and an expected salvage value of $550,000. 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 $54,900 and has an estimated $8,100 salvage value. The cash inflow of each investment is as follows: Year Cash inflow A Cash inflow B Cash inflow C 1 $300 $500 $100 2 $300 $400 $2, Jimmy Co. is considering a 12-year project that is estimated to cost $1,050,000 and has no residual value. Best study tips and tricks for your exams. Assume Peng requires a 10% return on its investments. Each investment costs $480. The investment costs $49,800 and has an estimated $11,400 salvage value. a. The investment costs $54,000 and has an estimated $7,200 salvage value. What is the present value, Strauss Corporation is making a $71,900 investment in equipment with a 5-year life. Q: Peng Company is considering an investment expected to generate an average net. 200,000. Apex Industries expects to earn $25 million in operating profit next year. The company uses the straight-line method of depreciation and has a tax rate of 40 percent. All other trademarks and copyrights are the property of their respective owners. a cost of $19,800. Calculate its book value at the end of year 10. The company's required rate of return is 13 percent. This investment will produce certain services for a community such as vehicle kilometres, seat . The net present value of the investment is A) $1,470 B) ($13,550) C) $6,450, The Zinger Corporation Is considering an Investment that has the following data: Cash Inflows occur evenly throughout the year. The Galley purchased some 3-year MACRS property two years ago at ), Summary of Strategic Management southern African concepts and case fourth edition, chapters 1 to 4, What of the following is not considered practice before the IRS per Circular 230? The company anticipates a yearly net income of $3,700 after taxes of 20%, with the cash flows to be received evenly throughout each year. What lump-sum amount should the company invest now to have the $370,000 available at the end of the eight-year period? 6 years c. 7 years d. 5 years. A company is considering investing in a new machine that requires a cash payment of $47,947 today. A new operating system for an existing machine is expected to cost $, A machine costs $700,000 and is expected to yield an after-tax net income of $52,000 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. Assume Peng requires a 5% return on its investments. The investment costs$45,000 and has an estimated $6,000 salvage value. Choose Numerator: Accounting Rate of Return Choose Denominator: = Accounting Rate of Return = Accounting rate of return, Required information [The following information applies to the questions displayed below.) Question: Peng Company is considering an investment expected to generate an average net income after taxes of $3,500 for three years. X c. Retained earnings. The machine will cost $1,804,000 and is expected to produce a $201,000 after-tax net income to be re, A company can buy a machine that is expected to have a three-year life and $30,000 salvage value. Compute the net present value of this investment. The salvage value of the asset is expected to be $0. PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided. View some examples on NPV. Peng Company is considering an investment expected to generate an average net income after taxes of $3,100 for three years. You'll get a detailed solution from a subject matter expert that helps you learn core concepts. negative? Assume Peng requires a 5% return on its investments. 15900 The investment costs $59.100 and has an estimated $6.900 salvage value. Management predicts this machine has a 10-year service life and a $100,000 salvage value, and it uses straight-line depreciation. (Do not round intermediate calculations.). Peng Company is considering an investment expected to generate an average net income after taxes of $3,500 for three years. What is the present valu, Strauss Corporation is making an $85,200 investment in equipment with a 5-year life. The asset has no salvage value. Assume Peng requires a 10% return on its investments, compute the net present value of this investment. The income tax depreciation method referred to as CCA: a) Allows a corporation some flexibility in choosing the class an asset is assigned to. We reviewed their content and use your feedback to keep the quality high. water? The net present value is given as the present value of inflows minus the present value of outflows from the project. Peng Company is considering an investment expected to generate an average net income after taxes of $1,950 for three years. 1, A machine costs $180,000 and will have an eight-year life, a $20,000 salvage value, and straight-line depreciation is used. The investment costs $47,400 and has an estimated $8,400 salvage value. What is the present valu, Your firm is considering a new investment proposal and would like to calculate its weighted average cost of capital. What is the internal rate of return if the company buys this machine? What is the current value of the company? During those years the company has been profitable, and it expects to continue to be profitable in the foreseeable future. The investment costs $45,000 and has an estimated $6,000 salvage value. The company's required rate of return is 12 percent. The system requires a cash payment of $125,374.60 today. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided. The building is expected to generate net cash inflows of $15,000 per year for the next 30 years. Management predicts this machine has a 12-year service life and a $40,000 salvage value, and it uses straight-line depreciation. The investment costs $45,000 and has an estimated $6,000 salvage value. Peng Company is considering an investment expected to generate an average net income after taxes of $1,950 for three years. Get access to this video and our entire Q&A library, How to Calculate Net Present Value: Definition, Formula & Analysis. should purchase a used Caterpillar mini excavator, A) The distribution of exam scores for Statistics is normally Compute the accounting rate of return for this investment; assume the company uses straight-line depreciation. The investment costs $48,900 and has an estimated $12,000 salvage value. The NPV is computed as: {eq}\displaystyle \text{Present value of annuity (PVA) } = P * \frac{1 - (1 + r)^{-t}}{r} {/eq}, Become a Study.com member to unlock this answer! TABLE B.3 Present Value of an Annuity of 1 Rat Periods 1% 2% 4% 5% 6% 7% 5% 10% 12% 15% 0.9901 0.9804 0.9709 0.9615 0.9524 0.9434 0.9346 0.9259 0.9174 0.9091 0.8929 0.8696 1.9704 1.9416 1.9135 1.88611.8594 1.8334 8080 1.7833 1.759 .7355 16901 1.6257 2.9410 2.8839 2.8286 2.7751 2.7232 2.6730 2.6243 2.5771 2.5313 2.4869 2.4018 2.2832 3.9020 3.8077 3.7171 3.6299 3.5460 3.4651 3.3872 3.3121 3.2397 3.1699 3.0373 2.8550 3.9927 3.8897 3.7908 3.6048 3.3522 5.7955 5.6014 5.4172 5.2421 5.0757 4.9173 4.7665 4.6229 4.4859 4.3553 4.1114 3.7845 5.3893 5.2064 5.0330 4.8684 4.5638 4.1604 7.6517 7.3255 7.0197 6.73276.4632 6.2098 5.9713 5.7466 5.5348 5.3349 4.9676 4.4873 8.5660 8.1622 7.7861 7.4353 7.1078 6.8017 6.5152 6.2469 5.9952 5.7590 5.3282 4.7716 9.4713 8.9826 8.5302 8.1109 7.7217 7.3601 7.0236 6.7101 6.4177 6.1446 5.6502 5.0188 7.1390 6.8052 6.4951 5.93775.2337 11.255 10.5753 9.95409.3851 8.8633 8.3838 7.9427 7.5361 7.1607 6.8137 6.1944 5.4206 12.1337 11.3484 10.6350 9.9856 9.3936 8.8527 8.3577 7.9038 7.4869 7.1034 6.4235 5.5831 13.0037 12.1062 11.2961 10.5631 9.8986 9.2950 8.7455 8.2442 7.7862 7.3667 6.6282 5.7245 13.8651 .8493 11.9379 11.1184 10.3797 9.7122 9.1079 8.5595 8.0607 7.6061 6.8109 5.8474 14.7179 13.5777 12.5611 11.6523 10.8378 10.1059 9.4466 8.8514 8.3126 7.8237 6.9740 5.9542 15.5623 14.2919 13.1661 12.1657 11.2741 10.4773 9.7632 9.1216 8.5436 8.0216 7.1196 6.0472 16.3983 14.9920 13.7535 12.6593 11.6896 10.8276 10.0591 9.3719 8.7556 8.2014 7.2497 6.1280 17.2260 15.6785 14.3238 13.1339 12.0853 11.1581 10.3356 9.6036 8.9501 8.3649 7.3658 6.1982 18.0456 16.3514 14.8775 13.5903 12.4622 11.4699 10.5940 9.8181 9.1285 8.5136 7.4694 6.2593 22.0232 19.5235 17.4131 15.6221 14.0939 12.7834 11.6536 10.6748 9.8226 9.0770 7.8431 6.4641 25.8077 22.3965 19.6004 17.2920 5.3725 13.7648 12.4090 11.2578 10.2737 9.4269 8.0552 6.5660 29.4086 24.9986 21.4872 18.6646 16.3742 14.4982 12.9477 11.6546 10.5668 9.6442 8.1755 6.6166 32.8347 27.3555 23.1148 19.7928 17.1591 15.0463 13.3317 11.9246 10.7574 9.7791 8.2438 6.6418 4.8534 4.7135 4.57974.4518 4.3295 4.2124 4.1002 6.7282 6.4720 6.2303 6.0021 5.7864 5.5824 10.3676 9.7868 26 8.7605 8.3064 7.8869 7.4987 12 13 14 15 16 19 20 25 30 35 40 Used to calculate the present value of a series of equal payments made at the end of each period. Assume the company uses straight-line depreciation. The investment costs$45,000 and has an estimated $6,000 salvage value. a. Using the original cost of the asset, the unadjusted rate of return on, A machine costs $600,000 and is expected to yield an after-tax net income of $23,000 each year. Compute the net present value of this investment. The investment costs $51,600 and has an estimated $10,800 salvage value. The company pays an operating tax rate of 30%. Compute the payback period. It is considering investing in a project that costs $210,000 and is expected to generate cash inflows of $85,000 at the end of each year for 4 years. Assume Peng requires a 15% return on its investments. Axe Corporation is considering investing in a machine that has a cost of $25,000. Assume Peng requires a 10% return on its investments. a. A company is investing in a solar panel system to reduce its electricity costs. a. Compute Loon s taxable inco. The annual depreciation cost is 10% of fixed capital investment. Peng Company is considering an investment expected to generate an average net income after taxes of $2,700 for three years. 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 payback period f. Elmdale Company is considering an investment that will return a lump sum of $743,100, 7 years from now. Peng Company is considering an investment expected to generate an average net income after taxes of $2,900 for three years. The lease term is five years. The machine will generate annual cash flows of $21,000 for the next three years. $2,000 per year for 10 years is the equivalent of $12,835 today ($2,000 6.4177) Strauss Corporation is making an $89,000 investment in equipment with a 5-year life. b) 4.75%. The system, A machine costs $700,000 and is expected to yield an after-tax net income of $30,000 each year. Compute the net present value of this investment. Question. The company uses straight-line depreciation. Cash Flow Annual cash flow Present Value of an Annuity of1 Residual value Present Value of 1 Select Chart Amount x PV FactorPresent Value $ 8,700 x Present value of cash inflows Immediate cash outflows Net present value 45,600 Assume Peng requires a 15% return on its investments. Assume all sales revenue is received, Elmdale Company is considering an investment that will return a lump sum of $769,700, 7 years from now. NPV can be calculated using a financial calculator: Cash flow each year in year 1 and 2 = $2,600, Cash flow in year 3 = $2,600 + $7,200 = $9,800. 8. Management predicts this machine has a 8-year service life and a $100,000 salvage value, and it uses str, Carla Company owns equipment that cost $1,044,000 and has accumulated depreciation of $440,800. Compute the accounting rate of return for this investment; assume the company uses straight-line depreciation. You w, A machine that cost $720,000 has an estimated residual value of $60,000 and an estimated useful life of eleven years. The security exceptions clause in the WTO legal framework has several sources. Required information (The following information applies to the questions displayed below.] Talking on the telephon #12 Peng Company is considering an investment expected to generate an average net income after taxes of $2,900 for three years. Annual cash flow Compute this machine's accoun, If an asset costs $210,000 and is expected to have a $30,000 salvage value at the end of its ten-year life, and generates annual net cash inflows of $30,000 each year, the cash payback period is: A) 8 years B) 7 years C) 6 years D) 5 years, The anticipated purchase of a fixed asset for $400,000 with a useful life of 5 years and no residual value is expected to yield a total income of $150,000. The company is expected to add $9,000 per year to the net income. Required: Prepare the, X Company is thinking about adding a new product line. 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. Compute the net present value of this investment. The profitability index for this project is: a. The expected average rate of return, giving effect to depreciation on investment is 15%. The investment costs $45,000 and has an estimated $6,000 salvage value. FV of $1. The approximate net present value of this project, The Zinger Corporation is considering an investment that has the following data: Year 1 Year 2 Year 3 Year 4 Year 5 Investment $17,500 $4,900 Cash inflow $3,900 $3,900 $10,000 $5,900 $5,900 Cash inflows occur evenly throughout the year. Zhang et al. Furthermore, the implication of strategic orientation for . Prepare the journal, You have the following information on a potential investment. QS 24-8 Net present value LO P3 Assume Peng requires a 15% return on its investments. Compute. Required information [The following information applies to the questions displayed below.) The asset is recorded at $810,000 and has an economic life of eight years. Assume the company uses straight-line . Assume Peng requires a 10% return on its investments. Management predicts this machine has a 10-year service life and a $100,000 salvage value, and it uses st, A machine costs $700,000 and is expected to yield an after-tax net income of $30,000 each year. 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. The investment costs $56,100 and has an estimated $7,500 salvage value. A company is deciding to invest in a new project at a cost of $2 million dollars. On whether to accept or reject a project, the NPV is interpreted on the result of the calculation. 8 years b. The company has projected the following annual cash flows for the investment. Compute the net present value of this investment. Its aim is the transition to a climate-neutral and . The investment costs $57.600 and has an estimated $8,400 salvage value. The investment costs $59,500 and has an estimated $9,300 salvage value. 2003-2023 Chegg Inc. All rights reserved. The company is expected to add $9,000 per year to the net income. For example: How much would you need to invest today at 10% compounded semiannually to accumulate $5,000 in 6 years from today? 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. Note: NPV is always a sensitive problem bec. It expects the free cash flow to grow at a constant rate of 5% thereafter. The facts on the project are as tabulated. Peng Company is considering an investment expected to generate an average net income after taxes of $1,950 for three years. The related cash flows, net of taxes, are ex, You have the following information on a potential investment. The machine will cost $1,772,000 and is expected to produce a $193,000 after-tax net income to be re, A company can buy a machine that is expected to have a three-year life and a $36,000 salvage value. 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. It generates annual net cash inflows of $10,000 each year. For (n= 10, i= 9%), the PV factor is 6.4177. What is the payback period in years ap, The Montana Company has decided to invest in a project that is expected to produce the following cash flows: $12,500 (year 1), $14,000 (year 2) and $9,000 (year 3). The investment costs $57,600 and has an estimated $6,000 salvage value. Assume Peng requires a 5% return on its investments. 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. Estimate Longlife's cost of retained earnings. Peng Company is considering an investment expected to generate an average net income after taxes of $3,300 for three years. Assume the company requires a 12% rate of return on its investments. Required intormation Use the following information for the Quick Study below. The salvage value of the asset is expected to be $0. The investment costs $47,400 and has an estimated $8,400 salvage value. What is the accounting rate of return? Stop procrastinating with our smart planner features. The The company's required rate of return is 11 percent. Required information (The following information applies to the questions displayed below.) Firm Value Young Corporation expects an EBIT of $16,000 every year forever. The salvage value is defined as the estimated book value of any asset after deducting all the depreciation on the asset. The company uses the straight-line method of depreciation and has a tax rate of 40 percent. The investment is expected to return the following cash flows, discounts at 8%.

peng company is considering an investment expected to generate 2023