Ask Question, Ask an Expert


Ask Financial Accounting Expert

problem1. The Atlantic Company plans to establish a new branch office in suburban area. The building will cost $200,000 and will be depreciated (on straight-line method) over a 20 year life to a $0 approximate salvage value. Equipment for building will cost an additional $100,000. This equipment has a 20-year life and will be depreciated on a straight-line basis to a $0 estimated salvage value. The branch office is expected to generate additional before tax net income of $30,000 per year. The tax rate is 40 percent and the cost of capital is 12 percent. Evaluate the net present value for the project.

a. $-63,523
b. $+246,477
c. $+53,523
d. $-53,523

problem2. What is the internal rate of return for project which has a net investment of $76,000 and net cash flows of $20,507 per year for seven years?

a. 16%
b. 17%
c. 18.2%
d. 19%

problem3. GoFlo is a small growing firm which is considering the purchase of another truck to serve GoFlo’s expanding customer base. The new truck will cost $21,000 and must generate annual net cash flows of $6,000 over the truck’s 5-year life. What is payback period for this project?

a. 3 years
b. 4.2 years
c. 3.5 years
d. 3.3 years

problem4. The use of sensitivity analysis needs that:

a. a model of project’s cash flows be developed
b. probability distributions of determinants of a project’s cash flows be estimated
c. the firms have access to a extremely large computer
d. the firm is greatly interested in portfolio risk lessening characteristics of a project

Financial Accounting, Accounting

  • Category:- Financial Accounting
  • Reference No.:- M94013

Have any Question? 

Related Questions in Financial Accounting

Is every student in our public school system on an equal

Is every student in our public school system on an "equal playing field"? Rather, are schools providing educational equality to all students? Specifically, you are to discuss the inequalities that are prevalent in today' ...

A lease can best be described as followsa a contract to

A lease can BEST be described as follows: a. A contract to rent, then purchase the asset at the conclusion of the lease term. b. An informal contract between the seller and the buyer of the property. c. A contractual agr ...

In its latest set of financials a company presents the

In its latest set of financials, a company presents the following information regarding its income statement: Total Sales/Revenues $2,600,000 Tax Expense $120,000 Admin Expenses $550,000 Interest Expense $420,000 Cost of ...

The maxwell corporation has a standard costing system in

The Maxwell Corporation has a standard costing system in which variable manufacturing overhead is assigned to production on the basis of standard machine-hours. The following data are available for July: • Actual variabl ...

Consider christian moralities involved in the process of

Consider Christian moralities involved in the process of Cash Flow Estimation and Risk Analysis with regard to Negative Within-Firm Externalities. What implications may develop, positive or negative, that support or conf ...

Management has determined that their product should sell

Management has determined that their product should sell for $10 per unit. To manufacture the product, the firm spends $2 each for materials and $1.35 for labor. The company expects that retailers will require a 20% marg ...

Analyze and evaluate the financial ratios and cash flow

Analyze and evaluate the financial ratios and cash flow measures of Verizon (the phone company) relative to its historical performance. For purposes of this project, a two-year reflection is sufficient. You should use at ...

Solving for budgeted manufacturing costs calvin company

Solving for budgeted manufacturing costs. Calvin Company expects to sell 10 million cases of paper towels during the current year. Budgeted costs per case are $28 for direct materials, $21 for direct labor, and $7(all va ...

Smith amp sons inc is a sporting goods manufacturer the

Smith & Sons Inc. is a sporting goods manufacturer. The firm uses a periodic inventory system. Smith & Sons shipped $30,000 of defective goods to a retailer. The retailer and Smith & Sons agreed that the retailer would k ...

The following data presented in alphabetical order are

The following data, presented in alphabetical order, are taken from the records of Nieto Corporation. Accounts Payable $260,000 Accounts Receivable $140,000 Accumulated depreciation- buildings $180,000 Accumulated deprec ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

A cola-dispensing machine is set to dispense 9 ounces of

A cola-dispensing machine is set to dispense 9 ounces of cola per cup, with a standard deviation of 1.0 ounce. The manuf

What is marketingbullwhat is marketing think back to your

What is Marketing? • "What is marketing"? Think back to your impressions before you started this class versus how you

Question -your client david smith runs a small it

QUESTION - Your client, David Smith runs a small IT consulting business specialising in computer software and techno

Inspection of a random sample of 22 aircraft showed that 15

Inspection of a random sample of 22 aircraft showed that 15 needed repairs to fix a wiring problem that might compromise

Effective hrmquestionhow can an effective hrm system help

Effective HRM Question How can an effective HRM system help facilitate the achievement of an organization's strate