the accounting rate of return for this investment; assume the company uses straight-line depreciation. The Action Plan for Soil Pollution Prevention and Control ("10-point Soil Plan") provides the top-level design for soil environmental protection in China and motivates heavy polluters to participate in soil pollution prevention and control. Which of the following functional groups will ionize in Management predicts this machine has a 9-year service life and a $60,000 salvage value, and it uses strai, A machine costs $700,000 and is expected to yield an after-tax net income of $52,000 each year. a. Compute this machines accounting rate of return. The investment costs $49,000 and has an estimated $8,800 salvage value. The company currently has no debt, and its cost of equity is 15 percent. Assume Peng requires a 5% return on its investments. What is the accountin, A company buys a machine for $62,000 that has an expected life of 7 years and no salvage value. Compute the net present value of this investment. d) 9.50%. Compute the accounting rate of return for this investment; assume the company uses straight-line depreciation. Peng Company is considering an investment expected to generate an average net income after taxes of $1,950 for three years. Assume Peng requires a 15% return on its investments. b. Assume the company requires a 12% rate of return on its investments. 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, Drake Corporation is reviewing an investment proposal. Peng Company is considering an investment expected to generate an Assume the company uses straight-line depreciation. The asset has no salvage value. The company's required rate of return is 10% for this class of asset. The project is expected to have an after-tax return of $250,000 in each of years 1 and 2. 2. The profitability index for this project is: a. The expected average rate of return, giving effect to depreciation on investment is 15%. Compute this machine s accoun, A machine costs $700,000 and is expected to yield an after-tax net income of $52,000 each year. Required: Prepare the, X Company is thinking about adding a new product line. The equipment will be depreciated on a straight-line basis over a five-year life and is expected to generate net cash inflows of $120,000 the first year, $140,000 the second, Assume the company requires a 10% rate of return on its investments. The average stock currently returns 15% and short-term treasury bills are offering 6%. The investment costs $45,000 and has an estimated $6,000 salvage value. Compute the accounting rate of return for this. Compute the net present value of this investment. c. Retained earnings. A machine costs $210,000, has a $16,000 salvage value, is expected to last nine years, and will generate an after-tax income of $47,000 per year after straight-line depreciation. The company is expected to add $9,000 per year to the net income. 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 $47,400 and has an estimated $8,400 salvage value. 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. Assume Peng requires a 5% return on its investments. The investment is expected to return the following cash flows, discounts at 8%. Compute the accounting rate of return for this investment; assume the company uses straight-line depreciation. (before depreciation and tax) $90,000 Depreciation p.a. The following estimates are available: Initial cost = $279,800 Cost of capital = 12% Estima, Strauss Corporation is making an $87,150 investment in equipment with a 5-year life. 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). Compute the accounting rate of return for this investment; assume the company uses straight-line depreciation. The investment costs $48,600 and has an estimated $6,300 salvage value. What amount should Cullumber Company pay for this investment to earn a 12% return? A company invests $175,000 in plant assets with an estimated 25-year service life and no salvage value. Ferrell, Liang and Renneboog (2016) as well as Chang, Chen, Chen and Peng (2019) . Solved Peng Company is considering an investment expected to | Chegg.com Assume Peng requires a 5% return on its investments. Cost Accounting Quiz Week 11.pdf - [The following Compute this machine's accoun, A machine costs $500,000 and is expected to yield an after-tax net income of $15,000 each year. 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. Required information [The following information applies to the questions displayed below.) Latest Questions & Answers | Course Eagle Negative amounts should be indicated by a minus sign.) Learn about what net present value is, how it is calculated both for a lump sum and for a stream of income over multiple years. What investment(s) should the firm make according to net present v, Unrealized gains or losses on available-for-sale investments occur when a company adjusts the investment to : A) average value when an asset is disposed B) average value but has not yet disposed of the asset C) fair value when an asset is disposed D) f, Finnegan Company plans to invest in a new operating plant that is expected to cost $500,000. The Galley purchased some 3-year MACRS property two years ago at Compute the payback period. Question: Peng Company is considering an investment expected to generate an average net income after taxes of $3,500 for three years. Assume Peng requires a 5% return on its investments. $ $ Accounting Rate of Return Choose . [SOLVED] Peng Company is considering an investment expected 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? Peng Company is considering an investment expected to generate an average net income after taxes of $3,250 for three years. Com, Peng Company is considering an investment expected to generate an average net income after taxes of $2,200 for three years. Determine. Assume Peng requires a 15% return on its investments. Peng Company is considering an investment expected to generate an average net income after taxes of $3,300 for three years. Peng Company is considering an investment expected to generate an #12 Peng Company is considering an investment expected to generate an average net income after taxes of $2,900 for three years. The initial outlay of the project would be $800,000 and the project's assets would have a residual value of $50,000 at the end o. 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. Compute the net present value of this investment. The salvage value of the asset is expected to be $0. Transcribed image text: Peng Company is considering an investment expected to generate an average net income after taxes of $2, 400 for three years. Compute this machine's accounti, A machine costs $200,000 and is expected to yield an after-tax net income of $5,040 each year. The cost of the asset is $120,000, Babirusa Company is considering the following investment: Assume straight-line depreciation is used. Sign up for free to discover our expert answers. ROI is equal to turnover multiplied by earning as a percent of sales. The machine will generate annual cash flows of $21,000 for the next three years. C. Appearing as a witness for a taxpayer Annual savings in cash operating costs are expected to total $200,000. Peng Company is considering an investment expected to generate an average net income after taxes of $2,900 for three years. Assume the company requires a 12% rate of return on its investments. 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 $3,300 for three years. View some examples on NPV. The fair value of the equipment is $464,000. Anglemenesis Company is planning to spend $84,000 for a new machine that is to be depreciated on a straight-line basis over 10 years with no salvage value. 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). Compute the accounting rate of return for this investment; assume the company uses straight-line depreciation. The present value of an annuity due for five years is 6.109. The The company has projected the following annual cash flows f, Lt. Dan Corporation invested $80,000 in a manufacturing equipment. What is the current value of the company? What is the depreciation expense for year two using the straight-line method? Empirical Evolution of the WTO Security Exceptions Clause and China's Sweden, Denmark and Norway, encounter several regulations and initiatives considering CSR and SRI such as the European Green Deal. a. The investment costs $45,600 and has an estimated $6,600 salvage value. A machine costs $700,000 and is expected to yield an after-tax net income of $52,000 each year. (Round each present value calculation to the nearest dollar. Peng Company is considering an investment expected to generate an average net income after taxes of $2,900 for three years. Compute Assume Peng requires a 5% return on its investments. TABLE B.1 Present Value of 1 Rate Perlods 1% 2% 3% 4% 5% 6% 7% 8% 9% 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 0.9803 0.9612 0.9426 0.9246 0.9070 0.8900 0.8734 0.8573 0.8417 0.8264 0.7972 0.7561 0.9706 0.9423 0.9151 0.8890 0.8638 0.8396 08163 .793 0.7722 7513 7118 06575 0.9610 0.9238 0.8885 0.8548 0.8227 0.7921 0.7629 0.7350 0.7084 0.6830 0.6355 0.5718 0.9515 0.9057 0.8626 0.8219 0.7835 0.7473 0.7130 0.6806 0.6499 0.6209 0.5674 0.4972 0.9420 0.8880 0.8375 0.7903 0.7462 0.7050 0.6663 0.6302 0.5963 0.5645 0.5066 0.4323 0.9327 0.8706 0.8131 0.7599 0.7107 0.6651 0.6227 0.5835 0.5470 0.5132 0.4523 0.3759 0.9235 0.8535 0.7894 0.7307 0.6768 0.6274 0.5820 0.5403 0.5019 0.4665 0.4039 0.3269 0.9143 0.8368 0.7664 0.7026 0.6446 0.5919 0.5439 0.5002 0.4604 0.4241 0.3606 0.2843 0.9053 0.8203 0.7441 0.6756 0.6139 0.5584 0.5083 0.4632 0.4224 0.3855 0.3220 0.2472 0.8963 0.8043 0.7224 0.6496 0.5847 0.5268 0.4751 0.4289 0.3875 0.3505 0.2875 0.2149 0.8874 0.7885 0.7014 0.6246 0.5568 0.4970 0.4440 0.3971 0.3555 0.3186 0.2567 0.1869 0.8787 0.7730 0.6810 0.6006 0.5303 0.4688 0.4150 0.3677 0.3262 0.2897 0.2292 0.1625 0.8700 0.7579 0.6611 0.5775 0.5051 0.4423 0.3878 0.3405 0.2992 0.2633 0.2046 0.1413 0.8613 0.7430 0.6419 0.5553 0.4810 0.4173 0.3624 0.3152 0.2745 0.2394 0.1827 0.1229 0.8528 0.7284 0.6232 0.5339 0.4581 0.3936 0.3387 0.2919 0.2519 0.2176 0.1631 0.1069 0.8444 0.7142 0.6050 0.5134 0.4363 0.3714 0.3166 0.2703 0.2311 0.1978 0.1456 0.0929 0.8360 0.7002 0.5874 0.4936 0.4155 0.3503 0.2959 0.2502 0.2120 0.1799 0.1300 0.0808 0.8277 0.6864 0.5703 0.4746 0.3957 0.3305 0.2765 0.2317 0.1945 0.1635 0.1161 0.0703 0.8195 0.6730 0.5537 0.4564 0.3769 0.3118 0.2584 0.2145 0.1784 0.1486 0.1037 0.0611 0.7798 0.6095 0.4776 0.3751 0.2953 0.2330 0.1842 0.1460 0.1160 0.0923 0.0588 0.0304 0.7419 0.5521 0.4120 0.3083 0.2314 0.174 0.1314 0.0994 0.0754 0.0573 0.0334 0.0151 0.7059 0.5000 0.3554 0.2534 0.1813 0.1301 0.0937 0.0676 0.0490 0.0356 0.0189 0.0075 0.6717 0.4529 0.3066 0.2083 0.1420 0.0972 0.0668 0.0460 0.0318 0.0221 0.0107 0.0037 9 10 12 13 14 15 16 18 19 20 25 30 35 40 * Used to compute the present value of a known future amount. Assume Peng requires a 5% return on its investments. A company has three independent investment opportunities. Peng Company is considering an investment expected to generate an average net income after taxes of $1,950 for three years. Compute the net present value of this investment. (Do not round intermediate calculations.). The investment costs $45,000 and has an estimated $6,000 salvage value. If t, Your company just bought an asset for $200,000 with an estimated useful life of 5 yrs, and a salvage value of $10,000. Management predicts this machine has a 10-year service life and a $105,000 salvage value, and it uses straight-line depreciation. Compute the net present value of this investment. A company has two investment choices that cost $3,000 each: one that brings in $10,000 in revenue at 8% interest in two years, and another that brings in $11,000 revenue at the same interest rate . PVA of $1. The corporate tax rate is 35 percent. a. Peng Company is considering an investment expected to generate an average net income after taxes of $3,500 for three years. The investment costs $54,900 and has an estimated $8,100 salvage value. The company uses the straight-line method of depreciation and has a tax rate of 40 percent. Experts are tested by Chegg as specialists in their subject area. Solution: Annual depreciation = (Cost - Salvage value) / useful life = ($45,600 - $8,700) / 3 = $12,300 Annual cash i. 2003-2023 Chegg Inc. All rights reserved. It is mainly used to evaluate a prospective project whether it would be profitable to the investor or not. The payback period for this investment Is: a) 3 years b) 3.8 years c) 4, A company is contemplating investing in a new piece of manufacturing machinery. Peng Company is considering an investment expected to generate an Babirusa Company is considering the following investment: Initial capital investment $175,000 Estimated useful life 3 years Estimated disposal value in 3 years $25,000 Estimated annual savings in cas, Sunset Inc. is trying to determine if they should invest in a new machine that would be more efficient and would generate an annual profit of $100,000 (after tax). The company anticipates a yearly net income of $3,650 after taxes of 22%, with the cash flows to be received evenly throughout each year. Accounting Rate of Return Choose Denominator: Choose Numerator: T = Accounting Rate of Return = Accounting rate of return 0, 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 $1950 for three years. The investment costs $47,400 and has an estimated $8,400 salvage value. The equipment has a useful life of 5 years and a residual value of $60,000. t, A machine costs $380,000, has a $20,000 salvage value, is expected to last eight years, and will generate an after-tax income of $60,000 per year after straight-line depreciation. 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 . Currently, U.S. Treasury bills are yielding 6.75% and the expected return for the S & P 500 is 18.2%. The investment costs $58, 500 and has an estimated $7, 500 salvage value. Assume Peng requires a 5% return on its investments. 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. A machine costs $180,000, has a $12,000 salvage value, is expected to last eight years, and will generate an after-tax income of $39,000 per year after straight-line depreciation. A negative NPV would suggest that the project is not worth investing since it will probably yield to a loss while a positive NPV would suggest otherwise. Using the factors of n = 12 and i= 5% (12 semiannual periods and a semiannual rate of 5%), the factor is 0.5568. Req, A company is contemplating investing in a new piece of manufacturing machinery. The expected future net cash flows from the use of the asset are expected to be $595,000. Private equity industry growth forecast | Deloitte Insights Dynamic modeling and analysis of multi-product flexible production line Assume Peng requires a 10% return on its investments. Jimmy Co. seeks to earn an average rate of return of 18% on all capital projects. Peng Company is considering an investment expected to genera | Quizlet The investment costs $45,000 and has an estimated $10,800 salvage value. Compute the net present value of this investment. What is Roni, You are considering an investment in First Allegiance Corp. 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. It expects the free cash flow to grow at a constant rate of 5% thereafter. Furthermore, the implication of strategic orientation for . PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided. 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 fair value of the equipment is $476,000. Accounting 202 Final - Formulas and Examples. Talking on the telephon Determine the payout period in year. Generation planning for power companies with hybrid production 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. Get access to this video and our entire Q&A library, How to Calculate Net Present Value: Definition, Formula & Analysis. [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. Compute the payback period. ABC Company is adding a new product line that will require an investment of $1,500,000. Peng Company is considering an Investment expected to generate an average net income after taxes of $3,000 for three years. Compute the payback period. Assume the company uses straight-line . The investment costs $45,000 and has an estimated $6,000 salvage value. (For calc, Natt Company is considering undertaking a project that would yield annual profits (after depreciation) of $68,000 for 5 years. The effects of government subsidies and environmental regulation on The cost of the investment is. Peng Company is considering an investment expected to generate an average net income after taxes of $1,950 for three years. Peng Company is considering an investment expected to generate an average net income after taxes of $2,600 for three years. Assume the company uses straight-line depreciation. Assume Peng requires a 15% return on its investments. (20-year, 12% pr, What is the NPV and IRR for the two investments options below? Peng Company is considering an investment expected to generate an average net income after taxes of $3,300 for three years. The investment costs $48,600 and has an estimated $6,300 salvage value. The company s required rate of return is 13 percent. water? copyright 2003-2023 Homework.Study.com. The net cash flows are estimated to be $7,610 per year for the next 5 years and no salvage value is anticipated. the net present value of this investment. TABLE B.4 f= [(1 + i)"-1Vi Future Value of an Annuity of 1 Rate Periods 1% 2% 3% 6% 7% 8% 9% 10% 12% 15% 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 0000 .0000 1.0000 10000 2.0100 2.0200 2.0300 2.0400 2.0500 2.0600 2.0700 2.0800 2.0900 2.1000 2.1200 3.0301 3.0604 3.0909 3.1216 3.1525 3.1836 3.2149 3.2464 3.2781 3.3100 3.3744 4.0604 4.1216 4.1836 4.2465 4.3101 4.3746 4.4399 5.1010 5.2040 5.3091 5.4163 5.5256 5.6371 5.7507 5.8666 5.9847 6.1051 6.3528 6.1520 6.3081 6.4684 6.6330 6.8019 6.9753 7.1533 7.3359 7.5233 7.7156 8.1152 7.2135 7.4343 7.6625 7.8983 8.1420 8.3938 8.6540 8.9228 9.2004 9.4872 10.0890 8.2857 8.5830 8.8923 9.2142 9.5491 9.8975 10.2598 10.6366 11.0285 11.4359 12.2997 9.3685 9.7546 10.1591 10.5828 11.0266 11.4913 11.9780 12.4876 13.0210 13.5795 14.7757 1.0000 2.1500 3.4725 4.9934 6.7424 8.7537 11.0668 4.5061 4.5731 4.6410 4.7793 16.7858 10 10.4622 10.9497 11.4639 12.0061 12.5779 13.1808 13.8164 14.4866 15.1929 15.9374 17.5487 20.3037 11.5668 12.1687 12.8078 13.4864 14.2068 14.9716 15.7836 16.6455 7.5603 18.5312 20.6546 24.3493 12.6825 13.4121 14.1920 15.0258 15.9171 16.8699 17.8885 18.9771 20.1407 21.3843 24.1331 12 13 13.8093 14.6803 15.6178 16.6268 17.7130 18.8821 20.1406 21.4953 22.9534 24.5227 28.0291 14 14.9474 15.9739 17.0863 18.2919 19.5986 21.0151 22.5505 24.2149 26.0192 27.9750 32.3926 40.5047 15 16 17.2579 18.6393 20.1569 21.8245 23.6575 25.6725 27.8881 30.3243 33.0034 35.9497 42.7533 55.7175 17 18.4304 20.0121 21.7616 23.6975 25.8404 28.2129 30.8402 33.7502 36.9737 40.5447 48.8837 65.0751 18 19 20.8109 22.8406 25.1169 27.6712 30.5390 33.7600 37.3790 41.4463 46.0185 51.1591 63.4397 88.2118 20 22.0190 24.2974 26.8704 29.7781 33.0660 36.7856 40.9955 45.7620 51.1601 57.2750 72.0524 102.4436 25 30 35 41.6603 49.9945 60.4621 73.6522 90.3203 111.4348 138.2369 172.3168 215.7108 271.0244 431.6635 40 48.8864 60.4020 75.4013 95.0255 120.7998 154.7620 199.6351 259.0565 337.8824 442.5926 767.0914 1,779.0903 29.0017 34.3519 16.0969 7.2934 18.5989 20.0236 21.5786 23.2760 25.1290 27.1521 29.3609 31.7725 37.2797 47.5804 19.6147 21.4123 23.4144 25.6454 28.1324 30.9057 33.9990 37.4502 41.3013 45.5992 55.7497 75.8364 28.2432 32.0303 36.4593 41.6459 47.7271 54.8645 63.2490 73.1059 84.7009 98.3471 133.3339 212.7930 34.7849 40.5681 47.5754 56.0849 66.4388 79.0582 94.4608 113.2832 136.3075 164.4940 241.3327 434.7451 881.1702 Used to calculate the future value of a series of equal payments made at the end of each period.