Business, 07.05.2021 01:00, sleimanabir

Balloons By Sunset (BBS) is considering the purchase of two new hot air balloons so that it can expand its desert sunset tours. Various information about the proposed investment follows: Initial investment (for two hot air balloons) $510,000
Useful life 9 years Salvage value $51,000
Annual net income generated 40,290
BBSâs cost of capital 9%.

Assume straight line depreciation method is used.

Required:
Help BBS evaluate this project by calculating each of the following:

a. Accounting rate of return.
b. Payback period.
c. Net present value (NPV).
d. Recalculate the NPV assuming BBS's cost of capital is 15 percent.

Answers: 1

Show answers

Other questions on the subject: Business

Business, 22.06.2019 07:30, davidleew24

Jewelry manufacturers produce a range of products such as rings, necklaces, bracelets, and brooches. what fundamental economic question are they addressing by offering this range of items?

Answers: 3

continue

Business, 22.06.2019 21:00, crazylogic963

China's new 5 percent tax on disposable wooden chopsticks, reflecting concerns about deforestation, has been praised by environmentalists. the move is hitting hard at the japanese, who consume 25 billion set of wooden chopsticks annually. almost all of the chopsticks used in japan come from china. the reuirements for chinese manufacturers of wooden chopsticks to pay the 5 percent tax is a factor in their external environment.

Answers: 3

continue

Business, 22.06.2019 21:20, Geo777

How success was the first day of the bus boycott

Answers: 1

continue

Business, 22.06.2019 23:00, cs101200

The discussion of the standards for selection of peanuts that will be used in m& ms and the placement of the m& m logo on the candies speaks to which building block of a sustainable competitive advantage:

Answers: 1

continue

Do you know the correct answer?

Balloons By Sunset (BBS) is considering the purchase of two new hot air balloons so that it can expa...