Answered step by step
Verified Expert Solution
Question
00
1 Approved Answer
Benson Company has a choice of two Investment alternatives. The present value of cash inflows and outflows for the first alternative is $140,000 and $106,000,
Benson Company has a choice of two Investment alternatives. The present value of cash inflows and outflows for the first alternative is $140,000 and $106,000, respectively. The present value of cash inflows and outflows for the second alternative is $315,000 and $270,000, respectively. Required a. Calculate the net present value of each Investment opportunity. (Negative amounts should be indicated by a minus sign.) b. Calculate the present value index for each investment opportunity (Round "PVI" to 2 decimal places.) c. Indicate which investment will produce the higher rate of return. Alternative 1 (NPV) Alternative 2 (NPV) b. Alternative 1 (PVI) Alternative 2 (PVI) The investment that will produce the higher rate of retum is City Taxi Service purchased a new auto to use as a taxi on January 1, 2018. for $25.000. In addition, City paid sales tax and title fees of $650 for the vehicle. The taxi is expected to have a five-year life and a salvage value of $6,250. Required a. Using the straight-line method, compute the depreciation expense for 2018 and 2019. (Round your answers to the nearest whole dollar amount.) b. Assume the van was sold on January 1, 2020, for $20,574. Determine the amount of gain or loss that would be recognized on the asset disposal. (Amounts to be deducted should be indicated with minus sign. Round the Intermediate calculations to nearest whole dollar amount.) 2018 Depreciation 2019 Depreciation per year per year b. on sale
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started