60.1K

Verified Solution

Question

Accounting

image
image
image
Compute the payback period for each of these two separate Investments: a. A new operating system for an existing machine is expected to cost $250,000 and have a useful life of five years. The system yields an incremental after-tax income of $72,115 each year after deducting its straight-line depreciation. The predicted salvage value of the system is $10,000. b. A machine costs $170,000, has a $13,000 salvage value, is expected to last seven years, and will generate an ofter-tax income of $39,000 per year after straight-line depreciation. Payback Period Choose Denominator Choose Numerator: Payback Period Payback period 0 0 b a. A new operating system for an existing machine is expected to cost $803,000 and have a useful life of six years. The system yields an incremental after-tax income of $235,000 each year after deducting its straight-line depreciation. The predicted salvage value of the system is $95.000 b. A machine costs $550,000, has a $54,000 salvage value, is expected to last eight years, and will generate an after-tax income of 2 $145,000 per year after straight-line depreciation Assume the company requires a 10% rate of return on its investments. Compute the net present value of each potential investment (PV of $1. FV of $1. PVA of $1. and EVA of $1) (Use appropriate factor(s) from the tables provided.) Complete this question by entering your answers in the tabs below. Required A Required A new operating system for an existing machine is expected to cost $803,000 and have a useful life of six years. The system yields an incremental after-tax income of $235,000 each year after deducting its straight-line depreciation. The predicted salvage value of the system is $95,000. (Round your answers to the nearest whole dollar) Cash Flow Select Chart Amount * PV Factor - Present Value Annual cash flow $ 0 Residual value 0 Net present value Required> A machine costs $400,000 and is expected to yield an after-tax net income of $9,000 each year, Management predicts this machine has a 11-year service life and a $80,000 salvage value, and it uses straight-line depreciation Compute this machine's accounting rate of return Accounting Rate of Return Choose Denominator: Choose Numerator 4 Accounting Rate of Return Accounting rate of retum 0

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students