Calculate the Net Present Value and
Pay-Back Period for the below investment (please
show calculations):
Rate...
Calculate the Net Present Value and
Pay-Back Period for the below investment (please
show calculations):
Rate of return: 15%
Inflation rate: 2%
Investment:
Year
Investment Cost
Recurring Cost
Revenue
1
$5,000,000
1
$100,000
$3,500,000
2
$125,000
$3,500,000
3
$325,000
$2,500,000
4
$325,000
$2,000,000
5
$500,000
$1,250,000
Two quick questions: please show basic caculations.
1.) Determine the payback period if the initial cost...
Two quick questions: please show basic caculations.
1.) Determine the payback period if the initial cost is $50,000,
billable revenue of $50 per hour and cost to operate $15 per hour
plus the operator cost at $20 per hour. The billable hours per year
are 1,020. MUST show calculations to receive full credit
2.) Calculate the total profit and percentage of construction
revenue that became profit: Revenue: $700,000 Total construction
costs: $200,000 General overhead: $100,000. MUST show calculations
to receive...
2. Consider an investment of $100,000 that declined to a value
of $50,000 at the end...
2. Consider an investment of $100,000 that declined to a value
of $50,000 at the end
of Year 1 and then rebounded back to its original $100,000 value at
the end of Year
2. The rate of return for this investment per year for the two-year
period is 0
because the starting and ending value of the investment is
unchanged.
a. Calculate the arithmetic mean of the yearly rates of return of
this investment.
b. Calculate the geometric mean rate...
PA11-1 Calculating Accounting Rate of Return, Payback Period,
Net Present Value, Estimating Internal Rate of Return...
PA11-1 Calculating Accounting Rate of Return, Payback Period,
Net Present Value, Estimating Internal Rate of Return [LO 11-1,
11-2, 11-3, 11-4]
Balloons By Sunset (BBS) is considering the purchase of two new
hot air balloons so that it can expand its desert sunset tours.
Various information about the proposed investment
follows:
Initial
investment (for two hot air balloons)
$
385,000
Useful life
8
years
Salvage
value
$
41,000
Annual net
income generated
31,185
BBS’s cost of
capital
7
%
Assume...
PA11-1 Calculating Accounting Rate of Return, Payback Period,
Net Present Value, Estimating Internal Rate of Return...
PA11-1 Calculating Accounting Rate of Return, Payback Period,
Net Present Value, Estimating Internal Rate of Return [LO 11-1,
11-2, 11-3, 11-4]
Balloons By Sunset (BBS) is considering the purchase of two new
hot air balloons so that it can expand its desert sunset tours.
Various information about the proposed investment
follows:
Initial investment (for two hot
air balloons)
$
297,000
Useful life
7
years
Salvage value
$
52,000
Annual net income generated
22,572
BBS’s cost of capital
7
%
Assume...
PA11-1 Calculating Accounting Rate of Return, Payback Period,
Net Present Value, Estimating Internal Rate of Return...
PA11-1 Calculating Accounting Rate of Return, Payback Period,
Net Present Value, Estimating Internal Rate of Return [LO 11-1,
11-2, 11-3, 11-4]
Balloons By Sunset (BBS) is considering the purchase of two new
hot air balloons so that it can expand its desert sunset tours.
Various information about the proposed investment
follows:
Initial investment (for two hot
air balloons)
$
475,000
Useful life
8
years
Salvage value
$
51,000
Annual net income generated
41,325
BBS’s cost of capital
10
%
Assume...
Net Present Value
Calculation
Initial Investment
Discount
Rate
Net Benefit Year 1
Net Benefit
Year 2...
Net Present Value
Calculation
Initial Investment
Discount
Rate
Net Benefit Year 1
Net Benefit
Year 2
New Benefit
Year 3
Present
Value
Is this a worthwhile
investment?
100,000
.06
50,000
50,000
50,000
100,000
.12
50,000
50,000
50,000
100.000
.24
50,000
50,000
50,000
200,000
.06
80,000
80,000
80,000
200,000
.36
100,000
100,000
100,000
500,000
.36
200,000
350,000
500,000
500,000
.36
500,00
350,000
200,000
Please show steps to solution using a FINANCIAL
CALCULATOR
a. Calculate the present value of an...
Please show steps to solution using a FINANCIAL
CALCULATOR
a. Calculate the present value of an annuity due which pays 500
every year for the next five years, if the interest rate is 5%.
b. You recently got promoted at your job. You have since decided
to buy your dream car which costs $97,000. The car dealer tells you
to pay 11,000 at the end of every year for the next 7 years after
which you can take possession of...