Question

# 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 \$900,000. 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 \$1,400,000 \$1,000,000 2 1,400,000 1,000,000 3 1,400,000 1,000,000 4 1,400,000 1,000,000 5 1,400,000 1,000,000 Required: Compute the payback period for the NC equipment. Round your answer to one decimal place.

Payback period = years

 Year Cash Revenues Cash expenses Net cash flow 0 -900000 1 1400000 1000000 400000 2 1400000 1000000 400000 3 1400000 1000000 400000 4 1400000 1000000 400000 5 1400000 1000000 400000 Payback Period = Initial Investment/ Annual net cash flow Payback period = \$900000/400000 2.3 Years

#### Earn Coins

Coins can be redeemed for fabulous gifts.

Similar Homework Help Questions
• ### 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 123.1 and Exhibit 128.2 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 \$ 730,671. The NC equipment will last five years with no expected salvage value. The expected after-tax cash flows associated with the project follow: Year...

• ### Blaylock Company wants to buy a numerically controlled (NC) machine to be used in producing specially...

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 \$1,000,000 \$1,300,000 1,300,000 1,000,000 1,300,000 1,000,000 1,300,000 1,000,000 1,000,000 1,300,000 Required: Compute the NC equipment's ARR. Enter as a percent and round your answer to...

• ### Blaylock Company wants to buy a numerically controlled (NC) machine to be used in producing specially...

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 \$700,000. 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 \$1,000,000 2 1,600,000 1,000,000 1,600,000 1,000,000 1,600,000 1,000,000 1,600,000 1,000,000 Required: Compute the investment's Net Present Value, assuming a required rate of return...

• ### 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 123.1 and Exhibit 120.2 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 \$806,784. 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...

• ### signment/a ssignmentMain.doFinvoker assignments&takeAssignmentSessionLocator assignment-takeinprogressefalse Calculator Payback, Accounting Rate of Return, Net Present Value, Internal Rate of...

signment/a ssignmentMain.doFinvoker assignments&takeAssignmentSessionLocator assignment-takeinprogressefalse Calculator Payback, Accounting Rate of Return, Net Present Value, Internal Rate of Return Melnik Company wants to buy a new machine costing \$800,000. The 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 \$1,400,000 \$1,116,000 1,400,000 1,116,000 1.480,000 1,116,000 1,400,000 1,116,000 1,400,000 1,116,000 Required: Compute the equipment's accounting rate of return. Enter as a percent and round your answer...

• ### Payback, Accounting Rate of Return, Present Value, Net Present Value, Internal Rate of Return For discount...

Payback, Accounting Rate of Return, Present Value, Net Present Value, Internal Rate of Return For discount factors use Exhibit 12B.1 and Exhibit 12B.2 All scenarios are independent of all other scenarios. Assume that all cash flows are after-tax cash flows a. Kambry Day is considering investing in one of the following two projects. Either project will require an investment of \$20,000. The expected cash flows for the two projects follow. Assume that each project is depreciable. ProjectA 6,000 8,000 10,000...

• ### Help please! Accounting Rabe of R X keAssignment/takeAssignmentMain.dotinvokersassignments&takeAssignmentSessioniocator assignment-takedinprogress false Calculator Payback, Accounting Rate of Return,...

Help please! Accounting Rabe of R X keAssignment/takeAssignmentMain.dotinvokersassignments&takeAssignmentSessioniocator assignment-takedinprogress false Calculator Payback, Accounting Rate of Return, Net Present Value, Intermal Rate of Return Melnik Company wants to buy a new machine costing \$700,000. The equipment will last five years with ne expected salvage value. The expected after-tax cash fows associated with the project follow: Year Cash Revenues Cash Expenses 1 \$1,300,000 \$1,000,000 2 1,300,000 1,000,000 3 1,300,000 1,000,000 4 1,300,000 1,000,000 1,300,000 1,000,000 Required Compute the payback period forr the...

• ### Problem 24-1A Computation of payback period, accounting rate of return, and net present value LO P1,...

Problem 24-1A Computation of payback period, accounting rate of return, and net present value LO P1, P2, P3 Factor Company is planning to add a new product to its line. To manufacture this product, the company needs to buy a new machine at a \$720,000 cost with an expected four-year life and a \$44,000 salvage value. All sales are for cash, and all costs are out-of-pocket, except for depreciation on the new machine. Additional information includes the following. (PV of...

• ### Problem 25-1A Computation of payback period, accounting rate of return, and net present value LO P1,...

Problem 25-1A Computation of payback period, accounting rate of return, and net present value LO P1, P2, P3 Factor Company is planning to add a new product to its line. To manufacture this product, the company needs to buy a new machine at a \$800,000 cost with an expected four-year life and a \$52,000 salvage value. All sales are for cash, and all costs are out-of-pocket, except for depreciation on the new machine. Additional information includes the following. (PV of...

• ### Saved Problem 24-1A Computation of payback period, accounting rate of return, and net present value LO...

Saved Problem 24-1A Computation of payback period, accounting rate of return, and net present value LO P1, P2, P3 Factor Company is planning to add a new product to its line. To manufacture this product, the company needs to buy a new machine at a \$560,000 cost with an expected four-year life and a \$28,000 salvage value. All sales are for cash, and all costs are out-of-pocket, except for depreciation on the new machine. Additional information includes the following. (PV...