Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

23 A company buys a machine for $76,000 that has an expected life of 7 years and no salvage value. The company anticipates a yearly

image text in transcribed
image text in transcribed
23 A company buys a machine for $76,000 that has an expected life of 7 years and no salvage value. The company anticipates a yearly net income of $3,650 after taxes of 22%, with the cash flows to be received evenly throughout each year. What is the accounting rate of return? o 750%. 4.80%. 33.62%. 2.11%. o 961%. The following present value factors are provided for use in this problem. Present vallue Of 1 at 9% 0.9174 0.8417 0.7722 0,7084 Present value of an annuity of 1 at 9% 0.9174 17591 2.5313 3.2397 Periods Cliff Co. wants to purchase a machine for $46,000, but needs to earn an 9% return. The expected year-end net cash flows are $16,000 in each of the first three years, and $20,000 in the fourth year. What is the machine's net present value (round to the nearest whole dollar)? O$(5,499) O $8,669 O $54,669 O $(31,832) O $68.000

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Auditing & Assurance Services

Authors: Timothy Louwers, Penelope Bagley, Allen Blay, Jerry Strawser, Jay Thibodeau

8th Edition

978-1260703733, 1260703738

More Books

Students also viewed these Accounting questions

Question

Do you know anyone with problems like Professor Smith's?

Answered: 1 week ago

Question

How do cultures and social communities shape communication?

Answered: 1 week ago