Business, 06.05.2021 22:30, michaireid04
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. Assume that the after-tax hurdle rate for accepting new capital investment projects by the company is 4%, after-tax.
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
Business, 22.06.2019 13:40, vanessam16
Salge inc. bases its manufacturing overhead budget on budgeted direct labor-hours. the variable overhead rate is $8.10 per direct labor-hour. the company's budgeted fixed manufacturing overhead is $74,730 per month, which includes depreciation of $20,670. all other fixed manufacturing overhead costs represent current cash flows. the direct labor budget indicates that 5,300 direct labor-hours will be required in september. the company recomputes its predetermined overhead rate every month. the predetermined overhead rate for september should be:
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Business, 22.06.2019 17:00, kamrulh278
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Business, 22.06.2019 20:20, abbz13
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Brandon Company is contemplating the purchase of a new piece of equipment for $45,000. Brandon is in...
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