Pina Colada, Inc. is considering purchasing equipment costing $42000 with a 6-year useful life. The equipment will provide annual cost savings of $12000 and will be depreciated straight-line over its useful life with no salvage value. Pina Colada requires a 10% rate of return. Present Value of an Annuity of 1 Period 8% 9% 10% 11% 12% 15% 6 4.623 4.486 4.355 4.231 4.111 3.784 What is the approximate net present value of this investment? A. $30000 B. $11832 C. $8772 D. $10260
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Pina Colada, Inc. is considering purchasing equipment costing $42000 with a 6-year useful life. The equipment will provide annual cost savings of $12000 and will be depreciated straight-line over its useful life with no salvage value. Pina Colada requires a 10% rate of return.
Present Value of an Annuity of 1 | ||||||
Period | 8% | 9% | 10% | 11% | 12% | 15% |
6 | 4.623 | 4.486 | 4.355 | 4.231 | 4.111 | 3.784 |
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- Blue Spruce, Inc. is considering purchasing equipment costing $84000 with a 6-year useful life. The equipment will provide annual cost savings of $22600 and will be depreciated straight-line over its useful life with no salvage value. Blue Spruce requires a 10% rate of return. Present Value of an Annuity of 1 Period 8% 9% 10% 11% 12% 15% 6 4.623 4.486 4.355 4.231 4.111 3.784 What is the approximate net present value of this investment? $17384 $11620 $14423 $51600Concord, Inc. is considering purchasing equipment costing $48000 with a 6-year useful life. The equipment will provide annual cost savings of $12000 and will be depreciated straight-line over its useful life with no salvage value. Concord requires a 10% rate of return. Period 8% 6 9% 4.623 4.486 Present Value of an Annuity of 1 11% 10% 4.355 4.231 4.111 3.784 O 109 O 0.73 O 106 O 1.25 What is the approximate profitability index associated with this equipment? Save for Later O 100 12% 47 15% A Attempts: 0 of 1 used Submit Answer F10 F11 F12 PrDavis Inc. is considering purchasing equipment costing $60,000 with a 6-year useful life. The equipment will provide cost savings of $14,600 and will be depreciated straight-line over its useful life with no salvage value. Cleaners requires a 10% rate of return. Present Value of an Annuity of 1 Period 8% 9% 10% 11% 12% 15% 6 4.623 4.486 4.355 4.231 4.111 3.784 What is the approximate net present value of this investment?
- Cleaners, Inc. is considering purchasing equipment costing $60,000 with a 6-year useful life. The equipment will provide cost savings of $15,705 and will be depreciated straight-line over its useful life with no salvage value. Cleaners requires a 10% rate of return. Present Value of an Annuity of 1 Period 8% 9% 10% 11% 12% 13% 6 4.623 4.486 4.355 4.231 4.111 3.784 What is the approximate profitability index associated with this equipment? Round your answer to 2 decimal places.Malone Corp. is considering the purchase of a new piece of equipment. The cost savings from the equipment would result in an annual increase in cash flow of $24330. The equipment will have an initial cost of $154350 and have a 5-year life. The salvage value of the equipment is estimated to be $21260 Factors to use for n-5.1-8% (DO NOT USE ANY OTHER FACTORS OR EQUATIONS) Future Value of an Annuity of $1 5.8666 Future Value of $1 1,4693 3.9927 0.6806 Present Value of an Annuity of $1 Present Value of $1 If the hurdle rate is 8%, what is the approximate not present value? Ignore income taxesMini Inc. is contemplating a capital project costing $47,019. The project will provide annual cost savings of $18,501 for 3 years and have a salvage value of $3,000. The company's required rate of return is 10%. The company uses straight-line depreciation. Present Value of an Annuity of 1 Period Present Value of 1 at 10% Present Value of an Annuity of 1 at 10% 1 .909 .909 .826 1.736 3 .751 2.487 Calculate the Net Present Value. Round your answer to 2 decimal places.
- Payback Company is considering the purchase of a copier machine for P42,825. The copier machine will be expected to be economically productive for 4 years. The salvage value at the end of 4 years is negligible. The machine is expected to provide a 15% internal rate of return. The company is subject to 40% income tax rate. The present value of an ordinary annuity of 1 for 4 periods is 2.85498. In order to realize the IRR of 15%, how much is the estimated before-tax cash inflow to be provided by the machine? A. P17,860 C. P25,000 B. P15,000 D. P35,700 Please show solutionSpanish Peaks Railroad Inc. is considering acquiring equipment at a cost of $132,000. The equipment has an estimated life of 10 years and no residual value. It is expected to provide yearly net cash flows of $33,000. The company's minimum desired rate of return for net present value analysis is 10%. Present Value of an Annuity of $1 at Compound Interest Year 6% 10% 12% 15% 20% 0.943 0.909 0.893 0.870 0.833 2 1.833 1.736 1.690 1.626 1.528 3 2.673 2.487 2.402- 2.283 2.106 4 3.465 3.170 3.037 2.855 2.589 4.212 3.791 3.605 3.353 2.991 4.917 4.355 4.111 3.785 3.326 7 5.582 4.868 4.564 4.160 3.605 6.210 5.335 4.968 4.487 3.837 6.802 5.759 5.328 4.772 4.031 10 7.360 6.145 5.650 5.019 4.192 Compute the following: The average rate of return, giving effect to straight-line depreciation on the investment. If required, round your answer to one decimal place. % b. The cash payback period. c. The net present value. Use the above table of the present value of an annuity of $1. Round to the nearest…Delicate Pieces inc. is considering the purchase of a special blow-molding machine that would cost $42,569 and would have a useful life of 5 years. The machine would generate $12.400 of net annual cash inflows per year for each of the 5 years of its life. The internal rate of return on the machine would be closest to Present Value of $1 Periods 3 4 5 6 7 0 0 10 Present Value of Annuity of $1 0% Periods 3 4 5 6 7 8 9 10 6% 0.840 0.792 0.747 0.705 0.665 0.627 0.592 0.558 OA 6% OB. 14% OC. 10 % OD. 12 % 2673 3.465 4.212 4.917 5.582 0210 6.802 7.360 8% 0.794 0.735 0681 0.630 0.583 0.540 0.500 0.463 8% 2.577 3.312 3.993 4.623 5.206 5.747 6247 6.710 10% 0.751 0.683 0.621 0.564 0.513 0.467 0.424 0,386 10% 2.487 3.170 3.791 4.355 4.868 5.335 5.759 6.145 12% 0.712 0636 0.567 0.507 0.452 0404 0.361 0.322 12% 2.402 3.037 3.605 4.111 4.564 4.968 5.328 5.650 0.675 0.592 0.519 0.450 0.400 0.351 0.308 0.270 2.322 2.914 3.433 3.889 4.288 4.639 4.946 5.216
- A company is considering the purchase of new equipment for $99,000. The projected annual net cash flows are $38,800. The machine has a useful life of 3 years and no salvage value. Management of the company requires a 8% return on investment. The present value of an annuity of $1 for various periods follows: Period 1 Present value of an annuity of $1 at 8% 2 0.9259 1.7833 3 2.5771 What is the net present value of this machine (rounded to the nearest whole dollar) assuming all cash flows occur at year-end? Multiple Choice $33,000 $4,800 $991 $37,800 $97,414Spanish Peaks Railroad Inc. is considering acquiring equipment at a cost of $248,000. The equipment has an estimated life of 10 years and no residual value. It is expected to provide yearly net cash flows of $62,000. The company's minimum desired rate of return for net present value analysis is 10%. Present Value of an Annuity of $1 at Compound Interest Year 6% 10% 12% 15% 20% 1 0.943 0.909 0.893 0.870 0.833 2 1.833 1.736 1.690 1.626 1.528 3 2.673 2.487 2.402 2.283 2.106 4 3.465 3.170 3.037 2.855 2.589 5 4.212 3.791 3.605 3.353 2.991 6 4.917 4.355 4.111 3.785 3.326 7 5.582 4.868 4.564 4.160 3.605 8 6.210 5.335 4.968 4.487 3.837 9 6.802 5.759 5.328 4.772 4.031 10 7.360 6.145 5.650 5.019 4.192 Compute the following: a. The average rate of return, giving effect to straight-line depreciation on the investment. If required, round your answer to one decimal place.% b. The cash payback period. c. The net present value. Use the above table of the present value…Poe Company is considering the purchase of new equipment costing $85,500. The projected annual cash inflows are $35,700, to be received at the end of each year. The machine has a useful life of 4 years and no salvage value. Poe requires a 10% return on its investments. The present value of an annuity of 1 and present value of an annuity for different periods is presented below. Compute the net present value of the machine. Periods Present Value of 1 at 10% Present Value of an Annuity of 1 at 10% 1 0.9091 0.9091 2 0.8264 1.7355 3 0.7513 2.4869 4 0.6830 3.1699 $45,409. $14,857. $27,665. $(14,857). $(27,665).