Hampton Industries had $46,000 in cashatatyear-end 2020 and $11,000 in cashyear-end 2021. The firm invested inproperty, plant, and equipment totaling $290,000the majority having a useful life greaterthan 20 years and fulling under the alternativedepreciation System.Cash flow from financing operating activities.tatuled + $160,000. Round your answers to thenearest dollar, if necessary.a) What was the cash flow operating activities?Cash over flow, if any, should be indicated by a minus sign$b) If accruals increased by $50,000, receivablesand inventores increased by $85,000, anddepreciation and amortization totaled $19,000, whatwas the firm's net income?

a.Cash at year-end 2020 = $46,000Cash at year-end 2021 = $11,000Cash flow from financing activities…

Hampton Industries had $46,000 in cash at at year-end 2020 and $11,000 in cash year end 2021. The firm invested in property, plant, and equipment totaling $290,000 the majority having a useful life greater than 20 years and fulling under the alternative depreciation System. Cash flow from financing operating activities totaled + $160,000. Round your answers to the nearest dollar, if necessary. a) What was the cash flow operating activities? Cash over flow, if any, should be indicated by a $ minuss b) If accruals increased by $50,000, receivables and inventures increased by $85,000, and depreciation and amortization totaled $19,000, what was the firm's net income?

Hampton Industries had $46,000 in cash at at year-end 2020 and $11,000 in cash year end 2021. The firm invested in property, plant, and equipment totaling $290,000 the majority having a useful life greater than 20 years and fulling under the alternative depreciation System. Cash flow from financing operating activities totaled + $160,000. Round your answers to the nearest dollar, if necessary. a) What was the cash flow operating activities? Cash over flow, if any, should be indicated by a $ minuss b) If accruals increased by $50,000, receivables and inventures increased by $85,000, and depreciation and amortization totaled $19,000, what was the firm's net income?

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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A company is considering a $184,000 investment in machinery with the following net cash flows. The company requires a 10% return on its investments. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.) Net Cash Flow (a) Compute the net present value of this investment. (b) Should the machinery be purchased? Required A Required B Year 1 $11,000 Year Year 2 $31,000 Complete this question by entering your answers in the tabs below. Year 1 Year 2 Year 3 Net Cash Flows Year 3 $61,000 Compute the net present value of this investment. (Round your present value factor to 4 decimals. Round your final answers to the nearest whole dollar.) Present Value Factor Year 4 $46,000 Present Value of Net Cash Flows Year 5 $123,000
Suppose an asset has a first cost of $8,000,a life of five years, a salvage value of $2,000 atthe end of five years, and a net annual before-taxrevenue of $2,500. The firm’s marginal tax rate is35%. The asset will be depreciated by three-yearMACRS.(a) Using the generalized cash flow approach, determine the cash flow after taxes.(b) Rework part (a), assuming that the entire investment would be financed by a bank loan at aninterest rate of 9%.(c) Given a choice between the financing methodsof parts (a) and (b), show calculations to justifyyour choice of which is the better one at an interest rate of 9%.
Assume that a company Is consideringa capital Investment project with a four-year time horizon and the following cash flows: Cost of new equipment Working capital required Annual net cash inflows Maintenance and repairs in third year Salvage value of equipment in fourth year $ 210,000 $ 50,000 $ 100,000 $40,000 $ 35,000 Click here to vlew Exhlbit 14B-1 and Exhibit 14B-2, to determine the approprlate discount factor(s) using the tables provided. The working capital will be released at the end of the project and the company's required rate of return Is 17%. The net present value of the project Is closest to: Multiple Choice $34,830. $44.730. $(30,530). $60.730.
Rihanna Company is considering purchasing new equipment for $452,400. It is expected that the equipment will produce net annual cash flows of $58,000 over its 10-year useful life. Annual depreciation will be $45,240. Compute the cash payback period. (Round answer to 1 decimal place, e.g. 10.5.) Cash payback period years
if the Accumulated depreciation in a company was 80,000 in 2019 and then increased to reach 132,000 in 2020. Then we would report the depreciation expense in the cash flow statement:- Select one: a. 52000 b. (52000) c. 132000 d. 80000
Assuming that capital requirement for new machinery is P135,000; net of sale of present equipment – P35,000; average annual operating cash flow – P25,000. The payback period would be: * A. 4 years B. 4.5 years C. 5.4 years D. 6.8 years
Azimuth Company was considering the purchase of equipment. Details on the equipment are as follows: Year Original Investment Cash Flow 0 $200,000 1 $ 40,000 2 40,000 3 60,000 4 40,000 5 60,000 6 30,000 What is the payback period in years, assuming no taxes are paid? Group of answer choices 5.00 4.00 3.85 4.33
A company project capitalized for $ 50,000 invested in depreciable assets will earn a uniform annual income of $ 19,849 in 10 years. The costs for operation and maintenance totals $ 9,000 each year. If the company expects its capital to earn 12% before income taxes, is the investment worthwhile? Determine by usinga.) Rate of Return Method; b.) Annual Worth Method c.) Present Worth Method
MNO company is evaluating a proposal for purchase of equipment which will cost $180,000. The cash inflows from the use of equipment is given below: Year Cash flow $60,000 $40,000 S70,000 $125,000 $35,000 1 3 4 Payback period for the proposal is: а. 3 years b. 2 years c. 4 years d. 3.08 years
The Grace Company purchased equipment for $14,000 on January 1, 2022 and estimates that it will increase net cash flows by the following amounts Year 1 $5,800 Year 2 4,200 Year 3 3,100 Year 4 1,900 Year 5 800 At the end of that time the equipment will be worthless. Assuming an interest rate of three percent, what is the NPV for the equipment? Use time value of money factors with at least four decimal places and then round your final answer to the nearest whole dollar.
Beyer Company is considering buying an asset for $270,000. It is expected to produce the following net cash flows. Year Year 1 $66,000 Initial investment Year 1 Year 2 Year 3 Year 4 Year 5 Total Net Cash Flows Net cash flows Compute the payback period for this Investment. (Cumulative net cash outflows must be entered with a minus sign. Round your Payback Perlod answer to 2 decimal places.) $ (270,000) Year 2 $39,000 Payback period = Year 3 $67,000 Cumulative Cash Flows Year 4 $200,000 Year 5 $22,000
The following data are accumulated by Lingle Company in evaluating the purchase of $180,000 of equipment having a 4-year useful life: Net Income Net Cash Flow Year 1 $51,000 $96,000 Year 2 33,000 78,000 Year 3 15,000 60,000 Year 4 3,000 48,000 Assuming that the desired rate of return is 15%, determine the net present value for the proposal. Use the table of the present value of $1 appearing in Exhibit 2 of this chapter.

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