Complete your calculations by filling in the highlighted cells. Note: the PV Annuity table is provided for you. Discuss if you think the cookie business should accept or reject the purchase of the new equipment and why. Additional information has come to your attention regarding the equipment purchase. One of the partner's brother owns the company that sells the equipment and insists the equipment is needed. Discuss any ethical concerns you see with this type of transaction. Cookie Business As the owner of the Cookie Business, you are considering the following investment: Purchase of new equipment $ 250,000.00 Expected annual increase in sales $ 48,017.50 Time frame 7 years Acceptable rate needed 9% Calculate the Internal Rate of Return: PV of annuity factor Internal rate of return Accept or reject
Complete your calculations by filling in the highlighted cells. Note: the PV Annuity table is provided for you. Discuss if you think the cookie business should accept or reject the purchase of the new equipment and why. Additional information has come to your attention regarding the equipment purchase. One of the partner's brother owns the company that sells the equipment and insists the equipment is needed. Discuss any ethical concerns you see with this type of transaction. Cookie Business As the owner of the Cookie Business, you are considering the following investment: Purchase of new equipment $ 250,000.00 Expected annual increase in sales $ 48,017.50 Time frame 7 years Acceptable rate needed 9% Calculate the Internal Rate of Return: PV of annuity factor Internal rate of return Accept or reject
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Complete your calculations by filling in the highlighted cells. Note: the PV Annuity table is provided for you. Discuss if you think the cookie business should accept or reject the purchase of the new equipment and why.
Additional information has come to your attention regarding the equipment purchase. One of the partner's brother owns the company that sells the equipment and insists the equipment is needed. Discuss any ethical concerns you see with this type of transaction.
| Cookie Business | ||||
| As the owner of the Cookie Business, you are considering the following investment: | ||||
| Purchase of new equipment | $ 250,000.00 | |||
| Expected annual increase in sales | $ 48,017.50 | |||
| Time frame | 7 | years | ||
| Acceptable rate needed | 9% | |||
| Calculate the |
||||
| PV of annuity factor | ||||
| Internal rate of return | ||||
| Accept or reject |
Transcribed Image Text:n
1
2
1%
0.9901
1.9704
3
2.941
4
3.902
5 4.8534
6
5.7955
7
6.7282
8
7.6517
9
8.566
9.4713
10.3676
11.2551 10.5753
10
11
紅
5%
6%
8%
10%
12%
2%
0.9804
0.9524
0.9434 0.9259 0.9091 0.8929
1.9416 1.9135
1.8861 1.8594
1.8334 1.7833 1.7355
1.6906
2.8839
2.8286
2.7751 2.7233
2.673 2.5771
2.4869
2.4018
3.8077
3.7171
3.6299
3.546
3.4651
3.3121
3.1699
3.0374
4.7135 4.5797
4.4518 4.3295
4.2124
3.9927
3.7908
3.6048
5.6014 5.4172 5.2421 5.0757
4.9173
4.6229 4.3553
4.1114
6.472 6.2303 6.0021
5.7864
5.5824
5.2064
4.8684
4.5638
7.0197 6.7327
6.4632
6.2098 5.7466
5.3349
4.9676
7.7861
7.4353 7.1078
6.8017 6.2469
5.759
5.3283
8.9826
8.5302
8.1109 7.7217 7.3601 6.7101
6.1446
5.6502
9.7869 9.2526
8.7605 8.3064 7.8869
7.139
6.4951
5.9377
7.5361 6.8137
6.1944
7.9038
7.1034
6.4236
9.954 9.3851 8.8633 8.3838
11.3484 10.635 9.9857 9.3936 8.8527
12.1063 11.2961 10.5631 9.8986 9.295
11.938 11.1184 10.3797 9.7123
8.2442 7.3667
6.6282
8.5595
7.6061
6.8109
12
7.3255
8.1622
13 12.1337
14 13.0037
15 13.8651 12.8493
3%
4%
0.9709 0.9615
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