+1-415-315-9853

info@mywordsolution.com

## Accounting

 Accounting Basics Cost Accounting Financial Accounting Managerial Accounting Auditing Taxation

You have been asked to support analysis of acquisition decisions involving net present value analysis.

problem 1: You are analyzing the net present value of a project over a 16 year period. Based on the rates in the textbook, what is the actual discount rate you would use given that your analysis must consider the effects of inflation/deflation?

Risk free rate + inflation rate - deflation rate + premium

problem 2: What is the present value of \$25,000 that you will receive at the end of two years?

Now, assuming the following variables:

Risk free rate    3.8450%
Inflation rate    2.0000%
Discount rate    8.8450%

Cash flow         \$25,000
Period               2

Present value    \$  21,101.97

problem 3: What is the present value of \$2,000 a month over the next 3 years?

Cash flow                \$2,000
Period                     36

Present value         \$21,542.03

problem 4: Cash Flow Scenario: Lease. Annual payments of \$50,000 paid at the beginning of each of the next five years (total of \$250,000).  What is the NPV of all lease payments?

Annual payments    \$50,000
Payment period       5

Present value        \$212,538.64

problem 5: What is the net present value of a lease that requires you to pay \$10,000 at the beginning of each year for the next five years and includes a provision for a rebate of \$5,000 at eh end of Year 5?

Annual payments    \$10,000
Payment period       5
Rebate                    \$5,000

Present value         \$39,234.87     32507.73

problem 6: What is the net present value of an item that has a purchase price of \$20,000, requires \$1,000 maintenance at the end of each year except year 4, and is expected to have a salvage value of \$1,000 at the end of the 5 year useful life?

Cash flow table:

Year    Item                    Cash flow      PV Factor    NPV

0        Purchase price    (\$20,000)       1.0000     (\$20,000)
1        Maintenance       (\$1,000)         0.9187     (\$919)
2        Maintenance       (\$1,000)         0.8441     (\$844)
3        Maintenance       (\$1,000)         0.7755     (\$775)
4        Salvage value     \$5,000            0.6546     \$3,273
(\$19,265)

Financial Accounting, Accounting

• Category:- Financial Accounting
• Reference No.:- M93887

Have any Question?

## Related Questions in Financial Accounting

### Infrastructure of homeland security hmls 4081 i choose the

Infrastructure of Homeland Security (HMLS 408) 1. I choose The Department Of Energy 2. Parts I and II are to be submitted as one submission, in the form of a continuous document. Make sure to delineate/identify part I an ...

Read Harvard Business Review's "In Search of a Second Act" case study. You can search for it in Business Source Complete (EBSCO) or use the see "How to find an article" in the Course Information tab. Two authors gave the ...

### Assignment excel spreadsheet projecton december 31 2016

Assignment: Excel Spreadsheet Project On December 31, 2016, Carson Company rendered services to Lincoln Corporation at an agreed price of \$125,939, accepting \$50,000 down and agreeing to accept the balance in three equal ...

### Tree top company manufactures a single product and uses a

Tree Top Company manufactures a single product and uses a process costing system. On the first day of April, there were 5,000 units in process that were 100% complete as to direct materials and 50% complete as to direct ...

### Assignmentat this point you have examined three years of

Assignment At this point you have examined three years of financial statements for your firm and produced a proforma statement. You have also determined their sustainable growth rate as well. You have also learned about ...

### Consider four different stocks all of which have a required

Consider four different stocks, all of which have a required return of 18.5 percent and a most recent dividend of \$3.65 per share. Stocks W, X, and Y are expected to maintain constant growth rates in dividends for the fo ...

### Financial of accounting assignment1a explain the term bank

FINANCIAL OF ACCOUNTING ASSIGNMENT 1. a) Explain the term "bank reconciliation" and state the reasons for its preparation (6mks) b) Jalash, a sole trader received his bank statement for the month of June 2016. At that da ...

### I loss contingencies entries and essayon november 24 2014

I. (Loss Contingencies: Entries and Essay) On November 24, 2014, 26 passengers on Windsor Airlines Flight No. 901 were injured upon landing when the plane skidded off the runway. Personal injury suits for damages totalin ...

### Analyze the changes made to corporate governance rules

Analyze the changes made to corporate governance rules since the implementation of the Sarbanes–Oxley Act of 2002. Based on your analysis, formulate an opinion on whether or not these changes are sufficient in preventing ...

### Assignmentcity bank has several departments that occupy

Assignment City Bank has several departments that occupy both floors of a two-story building. The depart mental accounting system has a single account, Building Occupancy Cost, in its ledger. The types and amounts of occ ...

• 13,132 Experts

## 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.

### Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

### Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

### Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

### Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro

### Describe what you learned about the impact of economic

Describe what you learned about the impact of economic, social, and demographic trends affecting the US labor environmen