Question : 121. The management of River Corporation considering the purchase of a : 1239648

 

 

121. The management of River Corporation is considering the purchase of a new machine costing $380,000. The company’s desired rate of return is 6%. The present value factor for an annuity of $1 at interest of 6% for 5 years is 4.212. In addition to the foregoing information, use the following data in determining the acceptability in this situation: 

Year

Income fromOperations

Net CashFlow

1

$20,000

$95,000

2

20,000

95,000

3

20,000

95,000

4

20,000

95,000

5

20,000

95,000

 

 

 

The net present value for this investment is: A. Positive $20,140B. Negative $20,140C. Positive $19,875D. Negative $19,875

 

122. Below is a table for the present value of $1 at compound interest. 

Year

6%

10%

12%

1

.943

.909

.893

2

.890

.826

.797

3

.840

.751

.712

4

.792

.683

.636

5

.747

.621

.567

 

 

 

 

Below is a table for the present value of an annuity of $1 at compound interest. 

Year

6%

10%

12%

1

.943

.909

.893

2

1.833

1.736

1.690

3

2.673

2.487

2.402

4

3.465

3.170

3.037

5

4.212

3.791

3.605

 

 

 

 

Using the tables above, what would be the present value of $15,000 (rounded to the nearest dollar) to be received at the end of each of the next two years, assuming an earnings rate of 6%? A. $27,495B. $26,040C. $30,000D. $25,350

 

123. Below is a table for the present value of $1 at compound interest. 

Year

6%

10%

12%

1

.943

.909

.893

2

.890

.826

.797

3

.840

.751

.712

4

.792

.683

.636

5

.747

.621

.567

 

 

 

 

Below is a table for the present value of an annuity of $1 at compound interest. 

Year

6%

10%

12%

1

.943

.909

.893

2

1.833

1.736

1.690

3

2.673

2.487

2.402

4

3.465

3.170

3.037

5

4.212

3.791

3.605

 

 

 

 

Using the tables above, what would be the present value of $8,000 (rounded to the nearest dollar) to be received one year from today, assuming an earnings rate of 12%? A. $7,544B. $7,120C. $7,272D. $7,144

 

124. Below is a table for the present value of $1 at compound interest. 

Year

6%

10%

12%

1

.943

.909

.893

2

.890

.826

.797

3

.840

.751

.712

4

.792

.683

.636

5

.747

.621

.567

 

 

 

 

Below is a table for the present value of an annuity of $1 at compound interest. 

Year

6%

10%

12%

1

.943

.909

.893

2

1.833

1.736

1.690

3

2.673

2.487

2.402

4

3.465

3.170

3.037

5

4.212

3.791

3.605

 

 

 

 

Using the tables above, what is the present value of $6,000 (rounded to the nearest dollar) to be received at the end of each of the next 4 years, assuming an earnings rate of 10%? A. $20,790B. $19,020C. $14,412D. $25,272

 

125. Below is a table for the present value of $1 at compound interest. 

Year

6%

10%

12%

1

.943

.909

.893

2

.890

.826

.797

3

.840

.751

.712

4

.792

.683

.636

5

.747

.621

.567

 

 

 

 

Below is a table for the present value of an annuity of $1 at compound interest. 

Year

6%

10%

12%

1

.943

.909

.893

2

1.833

1.736

1.690

3

2.673

2.487

2.402

4

3.465

3.170

3.037

5

4.212

3.791

3.605

 

 

 

 

Using the tables above, if an investment is made now for $20,000 that will generate a cash inflow of $7,000 a year for the next 4 years, what would be the present value (rounded to the nearest dollar) of the investment cash inflows, (assuming an earnings rate of 12%)? A. $20,352B. $3,969C. $22,190D. $21,259

 

126. The production department is proposing the purchase of an automatic insertion machine. They have identified 3 machines and have asked the accountant to analyze them to determine the best average rate of return. 

 

Machine A

Machine B

Machine C

Estimated Average Income

$40,000

$50,000

$75,000

Average Investment

$300,000

$250,000

$500,000

 

 

 

 

 A. Machine BB. Machine CC. Machine B or CD. Machine A

 

127. The production department is proposing the purchase of an automatic insertion machine. They have identified 3 machines and have asked the accountant to analyze them to determine the best cash payback. 

 

Machine A

Machine B

Machine C

Annual Cash Flow

$40,000

$50,000

$75,000

Average Investment

$300,000

$250,000

$500,000

 

 

 

 

 A. Machine AB. Machine CC. Machine BD. All are equal.

 

128. Which of the following is true of the cash payback period? A. The longer the payback, the longer the estimated life of the asset.B. The longer the payback, the sooner the cash spent on the investment is recovered.C. The shorter the payback, the less likely the possibility of obsolescence.D. All of the above are correct.

 

129. The production department is proposing the purchase of an automatic insertion machine. They have identified 3 machines and have asked the accountant to analyze them to determine which of the proposals (if any) meet or exceed the company’s policy of a minimum desired rate of return of 10% using the net present value method. Each of the assets has a estimated useful life of 10 years.

 

Machine A

Machine B

Machine C

Present Value of Future Cash Flows computed using 10% rate of return

$305,000

$295,000

$300,000

Amount of initial investment

$300,000

$300,000

$300,000

 

 

 

 

 A. A & CB. B & CC. BD. A only

 

130. The production department is proposing the purchase of an automatic insertion machine. They have identified 3 machines, each with an estimated life of 10 years. Which machine offers the best internal rate of return?

 

Machine A

Machine B

Machine C

Annual net cash flows

$50,000

$40,000

$75,000

Average investment

$250,000

$300,000

$500,000

 

 

 

 

 A. Machine BB. Machine CC. Machine A and BD. Machine A

 

 

Place your order
(550 words)

Approximate price: $22

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
$26
The price is based on these factors:
Academic level
Number of pages
Urgency
Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Read more

Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

Read more

Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.

Read more

Privacy policy

Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.

Read more

Fair-cooperation guarantee

By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.

Read more