Question

26. The following present value factors are provided for use in this problem. Periods Present Value of $1 at 8% Present Value of an Annuity of $1 at 8% 1 0.9259 0.9259 2 0.8573 1.7833 3 0.7938 2.5771 4 0.7350 3.3121 Xavier Co. wants to purchase a machine for $36,300 with a four year life and a $1,200 salvage value. Xavier requires an 8% return on investment. The expected year-end net cash flows are $11,300 in each of the four years. What is the machine's net present value (round to the nearest whole dollar)? $2,009. $1,127. $38,309. $(2,009). $(1,127).

A company buys a machine for $65,000 that has an expected life of 4 years and no salvage value. The company anticipates a yearly net income of $3,100 after taxes of 30%, with the cash flows to be received evenly throughout each year. What is the accounting rate of return? 4.77%. 6.68%. 19.08%. 9.54%. 2.86%.

Answer 1