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...
Calculate the discounted payback, net present value, and
internal rate of return for the following cash...
Calculate the discounted payback, net present value, and
internal rate of return for the following cash flows. -60, -50, 6,
45, 60, 70, 60, 45, 20. Discount rate at 10%. Please show work for
the internal rate of return calculation.
Payback, Accounting Rate of Return, Net Present Value, Internal
Rate of Return
Follow the format shown...
Payback, Accounting Rate of Return, Net Present Value, Internal
Rate of Return
Follow the format shown in Exhibit 12B.1 and Exhibit 12B.2 as
you complete the requirement below.
Blaylock Company wants to buy a numerically controlled (NC)
machine to be used in producing specially machined parts for
manufacturers of trenching machines. The outlay required is
$537,856. The NC equipment will last five years with no expected
salvage value. The expected after-tax cash flows associated with
the project follow:
Year
Cash...
Payback, Accounting Rate of Return, Net Present Value, Internal
Rate of Return
Follow the format shown...
Payback, Accounting Rate of Return, Net Present Value, Internal
Rate of Return
Follow the format shown in Exhibit 12B.1 and Exhibit 12B.2 as
you complete the requirements below.
Blaylock Company wants to buy a numerically controlled (NC)
machine to be used in producing specially machined parts for
manufacturers of tractors. The outlay required is $384,000. The NC
equipment will last 5 years with no expected salvage value. The
expected after-tax cash flows associated with the project
follow:
Year
Cash Revenues...
Payback, Accounting Rate of Return, Net Present Value, Internal
Rate of Return
Blaylock Company wants to...
Payback, Accounting Rate of Return, Net Present Value, Internal
Rate of Return
Blaylock Company wants to buy a numerically controlled (NC)
machine to be used in producing specially machined parts for
manufacturers of trenching machines. The outlay required is
$800,000. The NC equipment will last five years with no expected
salvage value. The expected after-tax cash flows associated with
the project follow:
Year
Cash
Revenues
Cash
Expenses
1
$1,600,000
$1,308,000
2
1,600,000
1,308,000
3
1,600,000
1,308,000
4
1,600,000
1,308,000
5...
The net present value, internal rate of return, and the
profitability index methods can give different...
The net present value, internal rate of return, and the
profitability index methods can give different rankings to mutually
exclusive projects in certain cases. Which of the following is one
of the possible reasons that causes contradictory rankings? A.
Project lives of different durations B. Projects have similar costs
C. Projects have a similar trend of cash flows D. Projects have
different accounting rates of return