ACCT525 Administrative ControlsChapter 81. A company is considering purchasing a machine for $24,895. The machine will g...

Get help with any kind of assignment - from a high school essay to a PhD dissertation

  1. Order Custom Essay, Course Work, Research and Term Papers

ACCT525 Administrative Controls

April 14, 2018

ACCT525 Administrative Controls

Chapter 8


1. A company is considering purchasing a machine for $24,895. The machine will generate an income before tax of $2,765 per year. Annual depreciation expense would be $1,047. What is the payback period for the new machine?

Enter your answer to the nearest 2 decimal places (example 6.25 or -6.25). Do not include commas or words


2. A company is considering the purchase of a new machine for $48,897. Management predicts that the machine can produce sales of $16,926 each year for the next 10 years. Expenses are expected to include direct materials, direct labor, and factory overhead totaling $7,667 per year plus depreciation of $4,329 per year. The company's tax rate is 39%. What is the payback period for the new machine?

Enter your answer to the nearest 2 decimal places (example 6.25 or -6.25). Do not include commas or word


3. Nicholas Alexander Corporation is considering the purchase of new equipment costing $30,720. The projected annual net cash flow from the equipment is $11,178. The revenue is to be received at the end of each year. The machine has a useful life of 3 years and no salvage value. Daniels requires a 12% return on its investments. The present value of an annuity of $1 for different periods follows: 1 Period - .08929; 2 Period 1.6901; 3 Periods 2.4018; 4 Periods 3.0373

What is the net present value of this investment? Enter your answer as a whole number with no commas, decimal points, or words. Example: 1000 not 1,000.25 Enter negative numbers as -10 not (10)


4. Edward Noble Corporation is considering the purchase of new equipment costing $31,386. The projected annual before-tax net income from the equipment is $1,366, after deducting $9,970 for depreciation. The revenue is to be received at the end of each year. The machine has a useful life of 3 years and no salvage value. Daniels requires a 12% return on its investments. The present value of an annuity of $1 for different periods follows: 1 Period - .08929; 2 Period 1.6901; 3 Periods 2.4018; 4 Periods 3.0373

What is the net present value of this investment? Enter your answer as a whole number with no commas, decimal points, or words. Example: 1000 not 1,000.25 Enter negative numbers as -10 not (10)


5. A company can buy a machine that is expected to have a three-year life and a $3,474 salvage value. The machine will cost $177,085 and is expected to produce a $20,724 before-tax net income to be received at the end of each year. If a table of present values of $1 at 12% shows values of 0.8929 for one year, 0.7972 for two years, and 0.7118 for three years, what is the net present value of the investment, discounted at 12%? Ignore income tax for this problem.


6. Two investments with exactly the same payback periods are always equally valuable to an investor.

True

False


7. If net present values are used to evaluate two investments that have equal costs and equal total cash flows, the one with more cash flows in the early years has the higher net present value.

True

False


8. The internal rate of return equals the rate that yields a net present value of zero for an investment.

True

False


9. If the IRR is less than or equal to the company’s required rate of return (often called the hurdle rate), the investment is accepted; otherwise, the investment is rejected.

True

False


10. Both methods of evaluating long-term investments, NPV and IRR, focus on the amount of cash flows and when the cash flows occur.

True

False


Note: Would like a Microsoft Excel spreadsheet, to be used. To show how the questions were worked to be answered.










OUR SERVICE CHARTER






  • 100% Plagiarism-Free Guarantee

    We deliver top-quality essays through employing various measures that seek to improve the content of a given assignment. One of the quality-control systems that we use entails plagiarism checkers. These systems help us to deliver a 100% plagiarism-free papers to our clients. We also value the originality of papers, and we do not resell any submitted paper. It means that every client always gets a unique paper. Additionally, our perfect team of writers is usually keen on the academic writing standards as well as the instructions brief that a client submits. Our team of writers holds matchless competence when it comes to its service delivery. Every member of the team usually has an academic degree, and the team’s diversified skills make it possible for us to have a qualified writer in any client’s area of study. Additionally, our past clients have always given a positive feedback on each of our writers.

  • Excellent Quality Work

    Grammar is one of the elements that we take seriously in our service delivery. Beside the use of spell checkers, we progressively take our writers through the essentials of a quality paper that features information clarity. Importantly, we encourage our writers to avoid coming up with a paper that deviates from the elements that appear on the client’s instruction brief. It means that the papers that we deliver denote well researched information that is rich in details. Additionally, the papers usually contain exhaustive details on any instruction that a client submitted. It is the tireless application of our writers’ efforts that makes us stand out when it comes to the delivery of excellent quality work. Notably, our writers use quality resources when digging up information that a paper requires. They are usually aware of the sources that contain rich information. Our past clients have proved that we give nothing short of quality work through giving us a positive feedback.

  • Free Revisions

    The papers that we deliver usually reflect a high quality level. However, there is always a room for any additional fine-tuning touch in line with a client’s preference without any additional charges. To begin with, a client has discretion to make a choice on their preferred top writer from our team. Such a writer could have handled past work for the client and received a positive review from the same. It means that the client has confidence of the quality of service that the writer delivers. Secondly, a client has an option of making use of our editing services. Our editors are always on standby to revise the paper and ensure that it matches with the expectations of a client that the instruction brief had detailed. The revision covers content adjustment that removes off-topic details, addition of sources, removal of language style errors, and assessment of the referencing style in order to enhance compliance.

  • Money Back Guarantee

    If any of our writers deliver an incomplete or ambiguous paper that is off the topic, our clients can claim for a refund in regard to the oversight. We do not compromise our service delivery through submission of a paper that does not follow our clients’ instructions. We also mind about the interest of our customers, and we always give them value for their money. However, our clients have a choice to request for a free revision within 14-30 days, or depending on the length of the submitted paper. A client who needs a refund should send a request for it within 14 days after receiving the completed paper. If a client decides not to download the paper, then they can request for 100% refund. Any refunded amount usually goes to the client’s Bonus Balance as store credit. There is always extra compensation when the refund takes the form of store credit. Alternatively, the refunded amount can also go the client’s credit card.




Related Questions