Current Attempt in Progress×Your answer is incorrect.Sunland Company is evaluating the purchase of a rebuilt spot-welding machine to be used in the manufacture of a new product. Themachine will cost $179,000, has an estimated useful life of 7 years and a salvage value of zero, and will increase net annual cash flowsby $37,990. Click here to view the factor table.What is its approximate internal rate of return? (Round answer to O decimal place, e.g. 13%.)Internal rate of returneTextbook and MediaSave for Later7%Attempts: 1 of 3 usedSubmit Answer

Let irr be x%At irr,present value of inflows=present value of…

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Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter12: Capital Investment Analysis

Section: Chapter Questions

Problem 20E

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Kanye Company is evaluating the purchase of a rebuilt spot-welding machine to be used in the manufacture of a new product. The machine will cost $185,000, has an estimated useful life of 7 years, a salvage value of zero, and will increase net annual cash flows by $40,536. Click here to view PV table.What is its approximate internal rate of return? (Round answer to 0 decimal place, e.g. 13%.)
Current Attempt in Progress Crane Company is evaluating the purchase of a rebuilt spot-welding machine to be used in the manufacture of a new product. The machine will cost $184,000, has an estimated useful life of 7 years and a salvage value of zero, and will increase net annual cash flows by $39.050. Click here to view PV table. What is its approximate internal rate of return? (Round answer to O decimal places, eg. 13%) Internal rate of return %
XYZ Company is looking to invest in some new machinery to replace its current malfunctioning one. The new machine, which costs P420,000, would increase annual revenue by P200,000 and annual cash expenses by P50,000. The machine is estimated to have a useful life of 12 years and P30,000 salvage value. Solve for the: A. Payback period in years B. Payback period reciprocal C. Accounting rate of return on initial investment D. Accounting rate of return on average investment.
What is the accounting rate of return for Project B? (Round your answer to two decimal places. Martin Production Co. is considering investing in specialized equipment costing $975,000. The equipment has a useful life of five years and a residual value of $75,000. Depreciation is calculated using the straight-line method. The expected net cash inflows from the investment are given below: Year 1 $275,000 Year 2 220,000 Year 3 200,000 Year 4 200,000 Year 5 180,000 $1.075.000 Compute the accounting rate of return on the investment, Show your calculations.
Harwell Printing Co. is considering the purchase of new electronic printing equipment. It would allow Harwell to increase its net income by $52,734 per year. Other information about this proposed project follows: Initial investment $ 282,000 Useful life 5 years Salvage value $ 97,000 Assume straight line depreciation method is used. Required:1. Calculate the accounting rate of return for Harwell. (Round your percentage answer to 1 decimal place.) 2. Calculate the payback period for Harwell. (Round your answer to 2 decimal places.)
XYZ Company is looking to invest in some new machinery to replace its current malfunctioning one. The new machine, which costs P420,000, would increase annual revenue by P200,000 and annual cash expenses by P50,000. The machine is estimated to have a useful life of 12 years and P30,000 salvage value. A. Accounting rate of return on initial investment B. Accounting rate of return on average investment.
Bartlett Car Wash Co. is considering the purchase of a new facility. It would allow Bartlett to increase its net income by $113,216 per year. Other information about this proposed project follows: Initial investment $ 524,150 Useful life 10 years Salvage value $ 55,000 Assume straight line depreciation method is used. Required: 1. Calculate the accounting rate of return for Bartlett. (Round your percentage answer to 2 decimal places.) 2. Calculate the payback period for Bartlett. (Round your answer to 2 decimal places.)
Bartlett Car Wash Co. is considering the purchase of a new facility. It would allow Bartlett to increase its net income by $107,868 per year. Other information about this proposed project follows: Initial investment Useful life $521,100 10 years Salvage value $ 52,000 Assume straight line depreciation method is used. Required: 1. Calculate the accounting rate of return for Bartlett. (Round your percentage answer to 2 decimal places.) 2. Calculate the payback period for Bartlett. (Round your answer to 2 decimal places.) 1. Accounting Rate of Return 2. Payback Period years
Bartlett Car Wash Company is considering the purchase of a new facility. It would allow Bartlett to increase its net income by $106,439 per year. Other information about this proposed project follows: Initial investment $ 514,200 Useful life 10 years Salvage value $ 45,000 Assume straight line depreciation method is used. Required: 1. Calculate the accounting rate of return for Bartlett. Note: Round your percentage answer to 2 decimal places. 2. Calculate the payback period for Bartlett. Note: Round your answer to 2 decimal places. 1. Accounting Rate of Return 2. Payback Period % years
Strip Mining Incorporated can develop a new mine at an initial cost of $16 million. The mine will provide a cash flow of $42 million in 1 year. The land then must be reclaimed at a cost of $27 million in the second year. a. What are the IRRS of this project? Note: Enter your answers in ascending order. Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. IRR 1 IRR 2 % % b. Should the firm develop the mine if the discount rate is 7%?, or 17%?, or 40%?, or 80%? Note: Negative amounts should be indicated by a minus sign. Do not round intermediate calculations. Enter your answers in millions rounded to 3 decimal places. Discount Rate NPV Develop? 7% million 17% million 40% million 80% million
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Newport Corporation is considering the purchase of a new piece of equipment. The cost savings from the equipment would result in an annual increase) in net cash flow of $200,000. The equipment will have an initial cost of $900,000 and a 6-year useful life with no expected salvage value. What is the accounting rate of return? Multiple Choice 16.67% 22.22% 5.56% 44.44%

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