d) 9.50%. Management estimates that this machine will generate annual after-tax net income of $540. The fair value of the equipment is $464,000. Management predicts this machine has a 10-year service life and a $100,000 salvage value, and it uses straight-line depreciation. Management predicts this machine has a 8-year service life and a $80,000 salvage value, and it uses strai, A machine costs $300,000 and is expected to yield an after-tax net income of $9,000 each year. A. What is the depreciation expense for year two using the straight-line method? The investment costs $49,800 and has an estimated $11,400 salvage value. After inputting the value, press enter and the arrow facing a downward direction. Zhang et al. Peng Company is considering an investment expected to generate an a) Prepare the adjusting entries to report 1. Solved Peng Company is considering an investment expected to - Chegg , ided by total investment.. total investment is current assets (inventories, accounts receivables and cash) plus fixed assets. A company is investing in a solar panel system to reduce its electricity costs. The company anticipates a yearly net income of $3,300 after taxes of 30%, with the cash flows to be rece, A company bought a machine that has an expected life of seven years and no salvage value. The salvage value of the asset is expected to be $0. Stop procrastinating with our smart planner features. Solved Peng Company is considering an investment expected to - Chegg The investment costs $48,600 and has an estimated $6,300 salvage value. The expected net cash inflows from, A building has a cost of $750,000 and accumulated depreciation of $125,000. , e to the IRS about a taxpayer Using the factors of n = 12 and i= 5% (12 semiannual periods and a semiannual rate of 5%), the factor is 0.5568. Each investment costs $1,000, and the firm's cost of capital is 10%. A machine costs $210,000, has a $14,000 salvage value, is expected to last ten years, and will generate an after-tax income of $43,000 per year after straight-line depreciation. What method, A machine costs $400,000 and is expected to yield an after-tax net income of $9,000 each year. The machine will cost $1,772,000 and is expected to produce a $193,000 after-tax net income to be re, A company can buy a machine that is expected to have a three-year life and a $36,000 salvage value. The lease term is five years. The equipment has a useful life of 5 years and a residual value of $60,000. What lump-sum amount should the company invest now to have the $370,000 available at the end of the eight-year period? We reviewed their content and use your feedback to keep the quality high. Input the cash flow values by pressing the CF button. Required information [The following information applies to the questions displayed below.) Req, CPA corporation is considering an investment with a cost of $5,000,000 an estimate useful life of 5 years, and no salvage value. It gives us the profitability and desirability to undertake the project at our required rate of return. The investment costs $59,500 and has an estimated $9,300 salvage value. Annual cash flow The investment costs $47,400 and has an estimated $8,400 salvage value. Accounting Rate of Return Choose Denominator: Choose Numerator: T = Accounting Rate of Return = Accounting rate of return 0, Required Information [The following information applies to the questions displayed below) Peng Company is considering an investment expected to generate an average net income after taxes of $1950 for three years. Dynamic modeling and analysis of multi-product flexible production line Management predicts this machine has an 11-year service life and a $140,000 salvage value, and it uses s, A machine costs $400,000 and is expected to yield an after-tax net income of $9,000 each year. The equipment will be depreciated on a straight-line basis over a five-year life and is expected to generate net cash inflows of $120,000 the first year, $140,000 the second, Assume the company requires a 10% rate of return on its investments. The Galley purchased some 3-year MACRS property two years ago at A new operating system for an existing machine is expected to cost $690,000 and have a useful life of six years. d) Provides an, Dango Corporation is reviewing an investment proposal. Calculate its book value at the end of year 6. What are the investment's net present value and inte. The founder asked you for $220,000 today and you expect to get $1,070,000 in 9 years. Assume the company uses straight-line . This investment will produce certain services for a community such as vehicle kilometres, seat . straight-line depreciation Compute the net present value of this investment. Question: Peng Company is considering an investment expected to generate an average net income after taxes of $3,500 for three years. (The following information applies to the questions displayed below) Part 1 of 2 Peng Company is considering an investment expected to generate an average net income after taxes of $2,100 for three years. The IRR on the project is 12%. Assume Peng requires a 5% return on its investments. The warehouse will cost $370,000 to build. Find step-by-step Accounting solutions and your answer to the following textbook question: Peng Company is considering an investment expected to generate an average net income after taxes of $1,950 for three years. 0.9, Merrill Corp. has the following information available about a potential capital investment: Initial investment $1,800 000 Annual net income $200,000 Expected life 8 years Salvage value $240,000 Merrill's cost of capital 10% Assume the straight-line deprec, Drake Corporation is reviewing an investment proposal. QS 24-8 Net present value LO P3 Assume Peng requires a 15% return on its investments. It is considering investing in a project that costs $50,000 and is expected to generate cash inflows of $20,000 at the end of each year for 3 years. Compute the net present value of each potential investment. If a potential investments internal rate of return is above the companys hurdle rate, should the investment be made? The machine will cost $1,800,000 and is expected to produce a $200,000 after-tax net income to be rece, A company can buy a machine that is expected to have a three-year life and a $25,000 salvage value. Apex Industries expects to earn $25 million in operating profit next year. Management estimates the machine will yield an after-tax net income of $12,500 each year. The investment costs $54,000 and has an estimated $7,200 salvage value. Assume Peng requires a 15% return on its investments. B. Assume Peng requires a 10% return on its investments. Required information [The following information applies to the questions displayed below.) The initial outlay of the project would be $800,000 and the project's assets would have a residual value of $50,000 at the end o. Assume Peng requires a 5% return on its investments. The net present value (NPV) is a capital budgeting tool. The building is expected to generate net cash inflows of $15,000 per year for the next 30 years. Yearly depreciation = (56,100 - 7,500) / 3 = $16,200.00. A company buys a machine for $76,000 that has an expected life of 6 years and no salvage value. Peng Company is considering an investment expected to generate an average net income after taxes of $1,950 for three years. Assume the company uses straight-line depreciation. Createyouraccount. turnover is sales div 200,000. Fair value method c. Historical cost m, Blue Fin Inc. requires all capital investments to generate a minimum internal rate of return of 15%. Generation planning for power companies with hybrid production The related cash flows, net of taxes, are ex, You have the following information on a potential investment. You'll get a detailed solution from a subject matter expert that helps you learn core concepts. 51,000/2=25,500. Peng Company is considering an investment expected to generate an Compute the net present value of this investment. Peng Company is considering an investment expected to generate an average net income after taxes of $3,300 for three years. Compute the net present value of this investment. The machine is expected to last four years and have a salvage value of $50,000. What is the accountin, A company buys a machine for $77,000 that has an expected life of 6 years and no salvage value. Peng Company is considering an investment expected to generate an average net income after taxes of $1,950 for three years. 2.3 Reverse innovation. value. The company uses the straight-line method of d, Determine Present Value: You can invest in a machine that costs $500,000. Management predicts this machine has an 8-year service life and a $40,000 salvage value, and it uses straight-line depreciation. The initial cost and estimates of the book value of the investment at the end of each year, the net cash flows for each year, and, The Zinger Corporation is considering an investment that has the following data: Cash inflows occur evenly throughout the year. Compute. Compute the accounting rate of return for this investment; assume the company uses straight-line depreciation. Compute this machine's accounti, A machine costs $500,000 and is expected to yield an after-tax net income of $19,000 each year. A company is considering investing in a new machine that requires a cash payment of $47,947 today. The investment costs $59.100 and has an estimated $6.900 salvage value. If the accounting ra, A company buys a machine for $76,000 that has an expected life of 7 years and no salvage value. Createyouraccount. Compute this machine's accoun, If an asset costs $210,000 and is expected to have a $30,000 salvage value at the end of its ten-year life, and generates annual net cash inflows of $30,000 each year, the cash payback period is: A) 8 years B) 7 years C) 6 years D) 5 years, The anticipated purchase of a fixed asset for $400,000 with a useful life of 5 years and no residual value is expected to yield a total income of $150,000. Peng Company is considering an investment expected to generate an average net income after taxes Peng Company is considering an investment expected to generate an average net income after taxes of $1,950 for three years. See Answer. The cost of the asset is $700,000 and it will be depreciated using s, The MoMi Corporation's income before interest, depreciation and taxes, was $1.7 million in the year just ended, and it expects that this will grow by 5% per year forever. The company uses a discount rate of 16% in its capital budgeting. Req, A company is contemplating investing in a new piece of manufacturing machinery. Assume the company uses straight-line . 8. #ifndef Stack_h The current value of the building is estimated to be $120,000. Firm Value Young Corporation expects an EBIT of $16,000 every year forever. What is the accounti, A company buys a machine for $79,000 that has an expected life of 4 years and no salvage value. The equipment will be depreciated on a straight-line basis over 5-year life and is expected to generate net cash inflows of $45,000 the first year, $65,000 the second year, and $, The Seago Company is planning to purchase $436,400 of equipment with an estimated seven-year life and no estimated salvage value. The investment costs $45,000 and has an estimated $6,000 salvage value. The company's required rate of return is 13 percent. It is expected that the rate of utilization of inputs should not exceed the corresponding outputs being produced if the efficiency of the system concerned is to be maximized. QS 25-7 Computation of accounting rate of return LO P2 Compute the accounting rate of return for this investment; assume the company uses straight-line depreciation. The payback period f. Elmdale Company is considering an investment that will return a lump sum of $743,100, 7 years from now. The machine will cost $1,812,000 and is expected to produce a $203,000 after-tax net income to be re, A company can buy a machine that is expected to have a three-year life and a $23,000 salvage value. Assume the company uses straight-line depreciation (PV of $1. The estimated life of the machine is 5yrs, with no salvage value. QS 11-8 Net present value LO P3 Peng Company is considering an Assume Peng requires a 15% return on its investments. The fair value of the equipment is $476,000. Assume Peng requires a 5% return on its investments. A new operating system for an existing machine is expected to cost $, A machine costs $700,000 and is expected to yield an after-tax net income of $52,000 each year. For (n= 10, i= 9%), the PV factor is 6.4177. c. Retained earnings. Calculate the payback period for the proposed e, You have the following information on a potential investment. #12 Peng Company is considering an investment expected to generate an average net income after taxes of $2,900 for three years. The investment costs $45,600 and has an estimated $6,600 salvage value Compute the accounting rate of return for this investment, assume the company uses straight-line depreciation. Assume that net income is received evenly throughout each year and straight-line depreciation is used. Experts are tested by Chegg as specialists in their subject area. Projected annual cash flows are: Year 1 $500,000 Year 2 $600,000 Year 3 $700,000 Year 4 $400,000 Calculate the NPV and the IRR. check bags. Assume Peng requires a 10% return on its investments, compute the net present value of this investment. Empirical Evolution of the WTO Security Exceptions Clause and China's Required information The following information applies to the questions displayed below] Peng Company is considering an investment expected to generate an average net income after taxes of $3,500 for three years. QS 11-8 Net present value LO P3Peng Company is considering an investment expected to generate an average net income after taxes of $1,950 for three years. ROI is equal to turnover multiplied by earning as a percent of sales. The company has projected the following annual cash flows for the investment. First we determine the depreciation expense per year. $40,000 Economic life 5 years Salvage value Zero Tax rate payable (assume paid in year of income) 30, A machine costs $500,000, has a $28,700 salvage value, is expected to last eight years, and will generate an after-tax income of $72,000 per year after straight-line depreciation. 7 years c. 6 years d. 5 years, The amount of the estimated average income for a proposed investment of $90,000 in a fixed asset, giving effect to depreciation (straight-line method), with a useful life of 4 years, no residual value. a. Multiple Choice, returns on investment is computed in the following manner. The income tax depreciation method referred to as CCA: a) Allows a corporation some flexibility in choosing the class an asset is assigned to. The project is expected to have an after-tax return of $250,000 in each of years 1 and 2. Peng Company is considering an investment expected to generate an The company currently has no debt, and its cost of equity is 15 percent. The amount to be invested is $210,000. Become a Study.com member to unlock this answer! TABLE B.4 f= [(1 + i)"-1Vi Future Value of an Annuity of 1 Rate Periods 1% 2% 3% 6% 7% 8% 9% 10% 12% 15% 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 0000 .0000 1.0000 10000 2.0100 2.0200 2.0300 2.0400 2.0500 2.0600 2.0700 2.0800 2.0900 2.1000 2.1200 3.0301 3.0604 3.0909 3.1216 3.1525 3.1836 3.2149 3.2464 3.2781 3.3100 3.3744 4.0604 4.1216 4.1836 4.2465 4.3101 4.3746 4.4399 5.1010 5.2040 5.3091 5.4163 5.5256 5.6371 5.7507 5.8666 5.9847 6.1051 6.3528 6.1520 6.3081 6.4684 6.6330 6.8019 6.9753 7.1533 7.3359 7.5233 7.7156 8.1152 7.2135 7.4343 7.6625 7.8983 8.1420 8.3938 8.6540 8.9228 9.2004 9.4872 10.0890 8.2857 8.5830 8.8923 9.2142 9.5491 9.8975 10.2598 10.6366 11.0285 11.4359 12.2997 9.3685 9.7546 10.1591 10.5828 11.0266 11.4913 11.9780 12.4876 13.0210 13.5795 14.7757 1.0000 2.1500 3.4725 4.9934 6.7424 8.7537 11.0668 4.5061 4.5731 4.6410 4.7793 16.7858 10 10.4622 10.9497 11.4639 12.0061 12.5779 13.1808 13.8164 14.4866 15.1929 15.9374 17.5487 20.3037 11.5668 12.1687 12.8078 13.4864 14.2068 14.9716 15.7836 16.6455 7.5603 18.5312 20.6546 24.3493 12.6825 13.4121 14.1920 15.0258 15.9171 16.8699 17.8885 18.9771 20.1407 21.3843 24.1331 12 13 13.8093 14.6803 15.6178 16.6268 17.7130 18.8821 20.1406 21.4953 22.9534 24.5227 28.0291 14 14.9474 15.9739 17.0863 18.2919 19.5986 21.0151 22.5505 24.2149 26.0192 27.9750 32.3926 40.5047 15 16 17.2579 18.6393 20.1569 21.8245 23.6575 25.6725 27.8881 30.3243 33.0034 35.9497 42.7533 55.7175 17 18.4304 20.0121 21.7616 23.6975 25.8404 28.2129 30.8402 33.7502 36.9737 40.5447 48.8837 65.0751 18 19 20.8109 22.8406 25.1169 27.6712 30.5390 33.7600 37.3790 41.4463 46.0185 51.1591 63.4397 88.2118 20 22.0190 24.2974 26.8704 29.7781 33.0660 36.7856 40.9955 45.7620 51.1601 57.2750 72.0524 102.4436 25 30 35 41.6603 49.9945 60.4621 73.6522 90.3203 111.4348 138.2369 172.3168 215.7108 271.0244 431.6635 40 48.8864 60.4020 75.4013 95.0255 120.7998 154.7620 199.6351 259.0565 337.8824 442.5926 767.0914 1,779.0903 29.0017 34.3519 16.0969 7.2934 18.5989 20.0236 21.5786 23.2760 25.1290 27.1521 29.3609 31.7725 37.2797 47.5804 19.6147 21.4123 23.4144 25.6454 28.1324 30.9057 33.9990 37.4502 41.3013 45.5992 55.7497 75.8364 28.2432 32.0303 36.4593 41.6459 47.7271 54.8645 63.2490 73.1059 84.7009 98.3471 133.3339 212.7930 34.7849 40.5681 47.5754 56.0849 66.4388 79.0582 94.4608 113.2832 136.3075 164.4940 241.3327 434.7451 881.1702 Used to calculate the future value of a series of equal payments made at the end of each period.