Business, 20.03.2020 18:43 jairopanda8

Brandon Company is contemplating the purchase of a new piece of equipment for $45,000. Brandon is in the 30% income tax bracket. Predicted annual after-tax cash inflows from this investment are $18,000, $15,000, $9,000, $6,000 and $3,000 for years 1 through 5, respectively. The firm uses straight-line depreciation with no residual value at the end of five years. The hurdle rate for accepting new capital investment projects is 4%, after-tax.

Required:Calculate:

A) The payback period in years (rounded to the nearest 10th of a year) for this proposed investment (assume that the after-tax cash inflows occur evenly throughout the year) and the estimated (present value) payback period, in years (rounded to two decimal places).

B) The estimated accounting rate of return (ARR) on this project (rounded to two decimal points), based on the initial investment.

C)The estimated net present value (NPV) of the proposed investment (rounded to the nearest hundred dollars).

D) The estimated internal rate of return (IRR) on this investment.

Answers: 1

Show answers

Another question on Business

Business, 22.06.2019 11:00

Using a cps-sample of 7,440 individuals, you estimate the following regression: = 20.91 - 2.61 x female where female is a binary variable that takes on the value of 1 for females and is 0 otherwise. the standard error on the coefficient on female is 0.25. the 95% confidence interval for the gender wage gap, or the amount that females earn less, is: a) [-3.10, -2.12] b) [18.30, 23.52] c) [-3.02, -2.20] d) [-1.96, -1.64]

Answers: 3

Answer

Business, 22.06.2019 19:10

Ancho corp. is an automobile company whose core competency lies in manufacturing petrol- and diesel- based cars. the company realizes that more of its potential customers are switching to electric cars. the r& d department of the company acquires competencies in developing electric cars and launches its first hybrid car, which uses both gas and electricity. in this scenario, ancho is primarilya. leveraging new core competencies to improve current market position. b. redeploying existing core competencies to compete in future markets. c. unlearning existing core competencies to create and compete in markets of the future. d. building new core competencies to protect and extend current market position

Answers: 3

Answer

Business, 22.06.2019 20:40

Which one of the following statements is correct? process costing systems use periodic inventory systems. process costing systems assign costs to departments or processes for a time period. companies that produce many different products or services are more likely to use process costing systems. production is continuous when a job-order costing is used to ensure that adequate quantities are on hand.

Answers: 2

Answer

Business, 22.06.2019 21:20

What business practice contributed most to andrew carnegie’s ability to form a monopoly?

Answers: 1

Answer

You know the right answer?

Brandon Company is contemplating the purchase of a new piece of equipment for $45,000. Brandon is in...

Questions