Revisit the Lifetime Care X-ray machine project. Assume, as before, that Life- time is a nonprofit organization
Question:
Revisit the Lifetime Care X-ray machine project. Assume, as before, that Life- time is a nonprofit organization and the expected annual cash inflows from the operating cost savings are $30,000 higher in each year (that is, $130,000 in years 1-4 and $120,000 in year 5). All other facts are unchanged: a $379,100 net initial investment, a five-year useful life, a zero terminal disposal price, and an 8% re- quired rate of return. Year 5 cash inflows of $130,000 include $10,000 recovery of working capital. Required Compute the following: 1. Net present value 2. Internal rate of return 3. Payback period 4. Accrual accounting rate of return on net initial investment
Step by Step Answer:
Cost Accounting A Managerial Emphasis
ISBN: 9780137605545
10th Edition
Authors: Charles T. Horngren, George Foster, Srikant M. Datar