Emilio Corporation has the following information about the purchase of a new piece of equipment: Cash revenues less cash expenses $300,000 per year Cost of equipment $1,100,000 Salvage value at the end of the 10th year $100,000 Increase in working capital requirements Tax rate 30 percent Life 10 years The cost of capital is 15 percent. $140,000
Q: A corporation has the following account balances at December 31, 2019: Accounts Payable $2,500…
A: Retained earnings are the balance of accumulated profit earned during the life of the business after…
Q: 35. X Co generates a 12 per cent contribution on its weekly sales of P280,000. A new product, Z, is…
A: Variable cost means the cost which vary with the level of output where as fixed cost remain fixed…
Q: company. Aldous would like to find out what would be the worth of his Php 100,000 after 5 years with…
A: In the given question, a series of annual payment of PHP 200,000 are to be made for 3 years. The…
Q: Consider the following transactions by a corp On July 5, billed a customer for $6700 for services…
A: Answer is option d) No effect.
Q: 1. In 2018, Delta Corporation bought a condominium unit on installment for the use of its executive.…
A: Fringe benefit tax is levied on the fringe benefits that are provided by the company to the…
Q: Find the capital beginning when, Additional Income = 150,000.00 Net Income = 120,000.00
A: Introduction: Capital: Capital is the owners contribution. capital has always credit balance.
Q: Salary paid to administration staff is an example of a direct cost. TRUE or FALSE?
A: Direct cost: Direct cost is the cost which is directly related to production process. Indirect cost…
Q: DGT Corporation's management keeps track of the time it takes to process orders. During the most…
A: The manufacturing cycle efficiency tells about the efficiency of business in various aspects.
Q: On December 1, 2018, Ban Company exchanged 40,000 shares of its P10 par value ordinary shares held…
A: Introduction:- The following basic information as follows:- Ban Company exchanged 40,000 shares of…
Q: Calculate the following ratios based on the balance sheet, income statement and cash flow prepared…
A: Since you have posted a question with multiple sub-parts, we will solve first three subparts for…
Q: Internal Rate of Return A project is estimated to cost $117,055 and provide annual net cash flows of…
A: Internal rate of return is the rate at which the present value of cash inflows is equal to present…
Q: If budgeted begin inventory is $20,600, budgeted ending inventory is $23,600, and budgeted cost of…
A: GIVEN If budgeted begin inventory is $20,600, budgeted ending inventory is $23,600, and budgeted…
Q: t is very important to record business transactions correctly. If the recording of transactions in…
A: Bookkeeping means preparation and maintenance of books of accounts for the business operations of an…
Q: Illustration: ABC Co. has the following comparative information regarding its inventories 2020 2019…
A:
Q: Variable costs as a percentage of sales for Lemon Inc. are 72%, current sales are $610,000. and…
A: Increase (decrease) in income = Increase in Sales x Contribution margin ratio where, Contribution…
Q: Gold Estate is in the business of leasing new sophisticated equipment. As lessor, the entity expects…
A: Gross Investment in lease can be derived by using following formula: Gross Investment = (Lease…
Q: On March 1, 2014, Khaleesi Company issued 10-year P5,000,000 8% term bonds dated March 1, 2014 and…
A: Unamortized discount on bonds payable of 333,906
Q: Operating Budget, Comprehensive Analysis Ponderosa, Inc., produces wiring harness assemblies used…
A: Following budgets have been prepared as per requirements: 1. Sales budget 2. Production budget 3.…
Q: Using the following information, prepare a bank reconciliatio Bank balance: $7,651 Book balance:…
A: The practice of comparing the balances in such an institution's account holder account to the…
Q: Which is better to have? Accounts receivable or notes receivable? And why?
A: Accounts receivable are current assets which represent amounts to be collected from customers for…
Q: Indirect cost is the cost that cannot be directly attributed to the production as these costs are…
A: Cost is the amount incurred in the regular course of the business. It may be direct or indirect.
Q: Impairment of a CGU (Cash Generating Unit) Potters Ltd has determined that its fine China…
A: Impairment of assets means reducing the book value of assets when carrying amount is more than…
Q: Griffin and Rhodes formed a partnership on January 1, 20X9. Griffin contributed cash of $120,000 and…
A: Introduction:- The following basic information as follows under:- On July 31, 20X9, the partnership…
Q: requires alue of money at machinery for $86- value. Cougar d anged the machin
A: Given: Cougar to pay 100,000 identical piece of machinery $86,000 Cougar paid=$10,000 fair…
Q: P company paid $3,600,000 in cash, to acquire 90%of S company on January 1, 2014. The total…
A:
Q: A corporation made a monthly payment on a bank loan of $550 which included interest of $50. What is…
A: Introduction When a bank loan is repaid, there are three accounts that are affected, Cash, Accounts…
Q: Zoe Corporation has the following information for the month of March. Cost of materials used in…
A: GIVEN Cost of direct materials used in production $16,958 Direct labor $27,539 Factory overhead…
Q: A customer was unable to pay the accounts receivable on time in the amount of $34,000. The customer…
A: Introduction: Journals: Each and every business transactions are to be recorded in Journals.…
Q: LISUD AYO Corporation, provided for uncollectible accounts receivable under the allowance method…
A: The valuation account intended to calculate the amount of a company's receivables that may be…
Q: what is the carrying value of the intangible assts at December 31, 2020?
A: Carrying Value of intangible assets is shown in the balance sheet part where Calculation of the…
Q: of P100,000, and a h profession. The husbar ck of a domestic corp- e of shares, P5,000; a er of the…
A: Gross income is the income which has been earned by the person during the year and gross income for…
Q: BioWare’s year-end unadjusted trial balance shows accounts receivable of $37,000 and sales of…
A: Working Notes: Bad debts expense = Sales x 2% = $480,000 x 2% = $9,600
Q: A comparative balance sheet and income statement is shown for Cruz, Incorporated. CRUZ, INCORPORATED…
A: Statement of cash flows: It is a financial statement that shows the increase or decrease in the cash…
Q: Which of the statements below, are potential benefits arising from an assurance service? I.…
A: ASSURANCE SERVICES ARE AN INDEPENDENT EXAMINATION OF A COMPANY'S PROCESS AND CONTROLS . IT AIMS TO…
Q: Jo Angel Company sells its products in reusable, expensive containers. The customer is charged a…
A: Returnable container deposits received from customers are recognised as financial liability as a…
Q: On January 1, 2020, Dan Co. entered into a ten-year noncancelable lease lease requiring year-end…
A: As per IFRS 16, Leases The initial recognition of lease liability will be present value of future…
Q: 2. A corporation's record show: Normal Income Tax per Quarter Taxes Withheld per Excess MCIT Prior…
A: Here to discuss the calculation of tax due and impact in the withhold taxes in the total due in the…
Q: Raya Company offers a 3-year warranty on its products. Raya estimated warranty costs to be 5% of…
A: The warranty Expenses are estimated on the basis of sales revenue earned during the period.
Q: Craigmont uses the allowance method to account for uncollectible accounts. Its year-end unadjusted…
A: Formulas: Bad debts expense = Estimated uncollectible accounts - Beginning credit balance of…
Q: During 2011, Rex Company introduced a new product carrying a two-year warranty against defects. The…
A: Formula: Estimated warranty liability amount= Sales amount x Warranty liability %
Q: On January 1, 2014, KAR Co. . a lessee, signed a 10-year non cancelable lease for a machine…
A: Interest expense for first year of lease commencement = initial measurement of lease liability ×…
Q: Ravenna Company is a merchandiser that uses the indirect method to prepare the operating activities…
A: The question is based on the concept of Cash flow statement. Cash flow Statement is the statement…
Q: Shue, a partner in the Financial Brokers Partnership, has a 30 percent share in partnership profits…
A: Net Income of the partnership is calculated by subtracting total expenses from total revenues.…
Q: Project A - Expected P5,000,000. Costs in
A: The total cost of production of a good comprises of the total fixed cost of production and the total…
Q: Amy and Brian were investigating the acquisition of a tax accounting business, Bottom Line Inc.…
A: as per your requirement adjusted basis are as follows
Q: If a business had sales of $3,894,000 and a margin of safety of 20%, the break-even point in sales…
A: Introduction: Break even point: The point where there is no profit nor loss to the company for the…
Q: Pedro Reyes purchased a delivery vehicle on January 1, 2016 amounting to PHP250,000. It is estimated…
A: Lets understand the basics. Depreciation is a reduction in value of asset due to wear and tear,…
Q: During 2019, Maricar Company guaranteed a supplier’s P5,000,000 loan from a bank. On October 1,…
A: Introduction:- During 2019, Maricar Company guaranteed a supplier’s P5,000,000 loan from a bank. On…
Q: P642,007.30 in b
A: Introduction Present value of bond:-
Q: Is there a financial impact on the total cost of the project, and if so, how much of an impact? The…
A: NOTES: Duration= 12months, Regular employees =7, Rate = 51 per hour, overhead rate = 150%, Working…
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
- Garnette Corp is considering the purchase of a new machine that will cost $342,000 and provide the following cash flows over the next five years: $99,000, $88,000, $92,000. $87,000, and $72,000. Calculate the IRR for this piece of equipment. For further instructions on internal rate of return in Excel. see Appendix C.Consolidated Aluminum is considering the purchase of a new machine that will cost $308,000 and provide the following cash flows over the next five years: $88,000, 92,000, $91,000, $72,000, and $71,000. Calculate the IRR for this piece of equipment. For further instructions on internal rate of return in Excel, see Appendix C.Cost of Capital, Net Present Value Leakam Companys product engineering department has developed a new product that has a 3-year life cycle. Production of the product requires development of a new process that requires a current 100,000 capital outlay. The 100,000 will be raised by issuing 60,000 of bonds and by selling new stock for 40,000. The 60,000 in bonds will have net (after-tax) interest payments of 3,000 at the end of each of the 3 years, with the principal being repaid at the end of Year 3. The stock issue carries with it an expectation of a 17.5% return, expressed in the form of dividends at the end of each year (with 7,000 in dividends expected for each of the next 3 years). The sources of capital for this investment represent the same proportion and costs that the company typically has. Finally, the project will produce after-tax cash inflows of 50,000 per year for the next 3 years. Required: 1. Compute the cost of capital for the project. (Hint: The cost of capital is a weighted average of the two sources of capital, where the weights are the proportion of capital from each source.) 2. CONCEPTUAL CONNECTION Compute the NPV for the project. Explain why it is not necessary to subtract the interest payments and the dividend payments and appreciation from the inflow of 50,000 in carrying out this computation.
- Harper Corporation has the following information about the purchase of a new piece of equipment: Cash revenues less cash expenses $50,000 per yearCost of equipment $130,000Salvage value at the end of the 8 th year $22,000Increase in working capital requirements $35,000Tax rate 25 percentLife 8 years The cost of capital is 13 percent. Required:iii. Calculate the after-tax payback period.iv. Calculate the accrual accounting rate of return on original investment for each of the eightyears.v. Calculate the net present value (NPV).vi. Calculate the internal rate of return (IRR).Harper Corporation has the following information about the purchase of a new piece of equipment: Cash revenues less cash expenses $50,000 per yearCost of equipment $130,000Salvage value at the end of the 8 th year $22,000Increase in working capital requirements $35,000Tax rate 25 percentLife 8 years The cost of capital is 13 percent. Required:a. Calculate the following assuming straight-line depreciation:i. Calculate the after-tax net income for each of the eight years.ii. Calculate the after-tax cash flows for each of the eight years.iii. Calculate the after-tax payback period.iv. Calculate the accrual accounting rate of return on original investment for each of the eightyears.v. Calculate the net present value (NPV).vi. Calculate the internal rate of return (IRR). b. Calculate the following assuming that depreciation expense is $24,000, $21,000, $18,000,$15,000, $12,000, $9,000, $6,000 and $3,000 for years 1 through 8, respectively:i. Calculate the after-tax cash flows for each of…The management of Wyoming Corporation is considering the purchase of a new machine costing $375,000. The company's desired rate of return is 6%. The present value factor for an annuity of $1 at interest of 6% for 5 years is 4.212. In addition to the foregoing information, use the following data in determining the acceptability of this investment: Year OperatingIncome Net CashFlow 1 $18,750 $93,750 2 18,750 93,750 3 18,750 93,750 4 18,750 93,750 5 18,750 93,750 The net present value for this investment is a. $118,145 b. $19,875 c. $(118,145) d. $(19,875) Please avoid solution image based thnx
- The management of Wyoming Corporation is considering the purchase of a new machine costing $375,000. The company's desired rate of return is 6%. The present value factor for an annuity of $1 at interest of 6% for 5 years is 4.212. In addition to the foregoing information, use the following data in determining the acceptability of this investment: Year OperatingIncome Net CashFlow 1 $18,750 $93,750 2 18,750 93,750 3 18,750 93,750 4 18,750 93,750 5 18,750 93,750 The average rate of return for this investment is a.10% b.15% c.5% d.25%The management of Wyoming Corporation is considering the purchase of a new machine costing $375,000. The company's desired rate of return is 6%. The present value factor for an annuity of $1 at interest of 6% for 5 years is 4.212. In addition to the foregoing information, use the following data in determining the acceptability of this investment: Year Income fromOperations Net CashFlow 1 $18,750 $93,750 2 18,750 93,750 3 18,750 93,750 4 18,750 93,750 5 18,750 93,750 The net present value for this investment is: The answer is $19,875. How did they get this number?The management of Wyoming Corporation is considering the purchase of a new machine costing $375,000. The company's desired rate of return is 6%. The present value factor for an annuity of $1 at interest of 6% for 5 years is 4.212. In addition to the foregoing information, use the following data in determining the acceptability of this investment: Income from Net Cash Year Operations Flow 1 $18,750 $93,750 18,750 93,750 18,750 93,750 4 18,750 93,750 18,750 93,750 The present value index for this investment is Oa. 1.00 Оb. 1.05
- Red Zone Corporation recently purchased a new machine for $339,0 13.20. The new equipment has a useful life of 10 years. Net cash flows will be $60,000 per year, end of year payments. What is the internal rate of return? Question 1Select one: a. 12 percent b. 16 percent c. 14 percent d. 10 percent e. 18 percentThe management of River Corporation is considering the purchase of a new machine costing $380,000. The company's desired rate of return is 6%. The present value factor for an annuity of $1 at interest of 6% for 5 years is 4.212. In addition to the foregoing information, use the following data in determining the acceptability of this investment: Year OperatingIncome Net CashFlow 1 $20,000 $95,000 2 20,000 95,000 3 20,000 95,000 4 20,000 95,000 5 20,000 95,000 The net present value for this investment isThe management of River Corporation is considering the purchase of a new machine costing $380,000. The company's desired rate of return is 6%. The present value factor for an annuity of $1 at interest of 6% for 5 years is 4.212. In addition to the foregoing information, use the following data in determining the acceptability of this investment: Operating Net Cash Year Income Flow 1 $20,000 $95,000 20,000 95,000 3 20,000 95,000 4 20,000 95,000 20,000 95,000 The cash payback period for this investment is Oa. 4 years Ob. 20 years Ос. 3 уears Od. 5 years