Salsa Company is considering an investment in technology to improve its operations. The investment costs $250,000 and
Question:
Salsa Company is considering an investment in technology to improve its operations. The investment costs $250,000 and will yield the following net cash flows. Management requires a 10% return on investments.
Required
1. Determine the payback period for this investment.
2. Determine the break-even time for this investment.
3. Determine the net present value for this investment.
Analysis Component
4. Should management invest in this project based on net present value?
Transcribed Image Text:
Year 1 Year 2 Year 3 Year 4 Year 5 Net cash flows $47,000 $52,000 $75,000 $94,000 $125,000 ..... ...
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 33% (6 reviews)
Part 1 Payback period 38 years Once 76000 of net cash flow is ...View the full answer
Answered By
Ali Khawaja
my expertise are as follows: financial accounting : - journal entries - financial statements including balance sheet, profit & loss account, cash flow statement & statement of changes in equity -consolidated statement of financial position. -ratio analysis -depreciation methods -accounting concepts -understanding and application of all international financial reporting standards (ifrs) -international accounting standards (ias) -etc business analysis : -business strategy -strategic choices -business processes -e-business -e-marketing -project management -finance -hrm financial management : -project appraisal -capital budgeting -net present value (npv) -internal rate of return (irr) -net present value(npv) -payback period -strategic position -strategic choices -information technology -project management -finance -human resource management auditing: -internal audit -external audit -substantive procedures -analytic procedures -designing and assessment of internal controls -developing the flow charts & data flow diagrams -audit reports -engagement letter -materiality economics: -micro -macro -game theory -econometric -mathematical application in economics -empirical macroeconomics -international trade -international political economy -monetary theory and policy -public economics ,business law, and all regarding commerce
4.00+
1+ Reviews
10+ Question Solved
Related Book For
Question Posted:
Students also viewed these Business questions
-
Sentinel Company is considering an investment in technology to improve its operations. The investment will require an initial outlay of $250,000 and will yield the following expected cash flows....
-
Lenitnes Company is considering an investment in technology to improve its operations. The investment will require an initial outlay of $250,000 and will yield the following expected cash flows....
-
Aster Company is considering an investment in technology to improve its operations. The investment will require an initial outlay of $800,000 and yield the following expected cash flows. Management...
-
Write the shear and momentfunctions and draw shear and moment diagrams for the following frames: (a) Support A is a roller, B and C are fixed and support C is a pin.
-
We propose to heat a house in the winter with a heat pump. The house is to be maintained at 20C at all times. When the ambient temperature outside drops to 10C, the rate at which heat is lost from...
-
Prepare a comparative common-size income statement for Enchanted Designs, Inc., using the 2007 and 2006 data of Exercise 17-13 and rounding percentages to one-tenth percent (three decimal places). To...
-
Discuss the following accounting assumptions and concepts: 1. Accrual basis of accounting 2. Cash basis of accounting 3. Going concern assumption 4. Materiality concept 5. Information role of...
-
Premium Woods manufactures jewelry boxes. The primary materials (wood, brass, and glass) and direct labor are assigned directly to the products. Manufacturing overhead costs are allocated based on...
-
You are a new junior accountant at Corporation, maker of lenses for eyeglasses. Your company sells generic-quality lenses for a moderate price. Your boss, the controller, has given you the latest...
-
A manufacturing company provides jobs for many people in a small town where employment is not easy to find. The company has stayed in the town even though it could find cheaper workers elsewhere...
-
Project A requires a $280,000 initial investment for new machinery with a five-year life and a salvage value of $30,000. Project A is expected to yield annual income of $20,000 per year and net cash...
-
Information for two alternative projects involving machinery investments follows. a. Compute accounting rate of return for each project. b. Based on accounting rate of return, which project is...
-
Kirit Devis employer receives a creditor garnishment order to withhold $100 from Devis paycheck each week. This week his disposable earnings were $250. How much will the employer withhold from this...
-
on C++. I cant figure this out. Please help. Using the ASCII chart in Appendix B, complete the following program by assigning the char variables with your initials. There are 4 different ways you can...
-
The bank advertises a mortgage amortized over 30 years for 5% compounded quarterly. I decide to go for the quarterly payment option. What will my quarterly payment be for each dollar borrowed?
-
Our company - Public Eye Corp. - is an early-stage company providing real-time access to satellite images. Our clients include government entities and private firms. Demand for our services has been...
-
Our firm - Coffee Services Company - makes and delivers coffee kits used in high-throughput coffee machines used by restaurants and large offices. The kits are made at a single central facility; they...
-
IT environments comprise of complex architectures, various software and hardware nodes, and now encompass cloud and multi-region designs. For this assignment, you are to develop a plan that will...
-
Brinker International, Inc. is the parent company that owns casual dining chains Chili's Grill and Bar and Maggiano's Little Italy. You can learn more about the company at www.brinker.com. In its...
-
A copper wire (density = 8.96 g/cm 3 ) has a diameter of 0.25 mm. If a sample of this copper wire has a mass of 22 g, how long is the wire?
-
Handy Home sells windows and doors in the ratio of 8:2 (windows: doors). The selling price of each window is $200 and of each door is $500. The variable cost of a window is $125 and of a door is...
-
R& R Tax Service offers tax and consulting services to individuals and small businesses. Data for fees and costs of three types of tax returns follow. R& R provides services in the ratio of 5:3:2...
-
Company A is a manufacturer with current sales of $ 6,000,000 and a 60% contribution margin . Its fixed costs equal $ 2,600,000. Company B is a consulting firm with current service revenues of $...
-
Amal is currently producing long-form content in the form of e-books and guides that are not directly accessible on the website. What term best describes the assets she is working to create
-
2. Which variables have the strongest relationship with ticket sales? Concessions? Think about what drives your own behavior with respect to attending sporting events, movies, plays, etc
-
kahn incorporated has a Target capital structure of 5 0 % common equity and 5 0 % debt to fund i 1 0 billion in operating assets for the more common Incorporated has a wacc of 1 6 % a before tax cost...
Study smarter with the SolutionInn App