Ch 19 > Payback and ARR Each of the following scenarios is independent. All cash flows...
Fantastic news! We've Found the answer you've been seeking!
Question:
![image text in transcribed](https://s3.amazonaws.com/si.experts.images/answers/2024/06/665be1e11beb9_632665be1e091ceb.jpg)
Transcribed Image Text:
Ch 19 > Payback and ARR Each of the following scenarios is independent. All cash flows are after-tax cash flows. Required: 1. Michael Kimathi has purchased a tractor for $93,750. He expects to receive a net cash flow of $28,500 per year from the investment. What is the payback period for Michael? Round your answer to two decimal places. 3.29 years 2. Bertha Lafferty invested $367,500 in a laundromat. The facility has a 10-year life expectancy with no expected salvage value. The laundromat will produce a net cash flow of $109,000 per year. What is the accounting rate of return? Enter your answer as a whole percentage value (for example, 16% should be entered as "16" in the answer box). 20 % 3. Melannie Bayless has purchased a business building for $327,000. She expects to receive the following cash flows over a 10- year period: Year 1: $45,500 Year 2: $55,500 Year 3-10: $87,200 What is the payback period for Melannie? Round your answer to one decimal place. 4.4 X years What is the accounting rate of return? Enter your answer as a whole percentage value (for example, 16% should be entered as "16" in the answer box). 14 % Feedback Check My Work 1. The payback period is the time required for a firm to recover its original investment. 2. The accounting rate of return measures the return on a project in terms of accrual based income as opposed to using a project's cash flow. 3. The payback period is the time required for a firm to recover its original investment. Check My Work Previous Assis Ch 19 > Payback and ARR Each of the following scenarios is independent. All cash flows are after-tax cash flows. Required: 1. Michael Kimathi has purchased a tractor for $93,750. He expects to receive a net cash flow of $28,500 per year from the investment. What is the payback period for Michael? Round your answer to two decimal places. 3.29 years 2. Bertha Lafferty invested $367,500 in a laundromat. The facility has a 10-year life expectancy with no expected salvage value. The laundromat will produce a net cash flow of $109,000 per year. What is the accounting rate of return? Enter your answer as a whole percentage value (for example, 16% should be entered as "16" in the answer box). 20 % 3. Melannie Bayless has purchased a business building for $327,000. She expects to receive the following cash flows over a 10- year period: Year 1: $45,500 Year 2: $55,500 Year 3-10: $87,200 What is the payback period for Melannie? Round your answer to one decimal place. 4.4 X years What is the accounting rate of return? Enter your answer as a whole percentage value (for example, 16% should be entered as "16" in the answer box). 14 % Feedback Check My Work 1. The payback period is the time required for a firm to recover its original investment. 2. The accounting rate of return measures the return on a project in terms of accrual based income as opposed to using a project's cash flow. 3. The payback period is the time required for a firm to recover its original investment. Check My Work Previous Assis
Expert Answer:
Posted Date:
Students also viewed these accounting questions
-
Why is the term liquidating dividend used to describe cash dividends debited against contributed capital accounts?
-
Budget Hardware Consultants purchased a building for $452,000 and depreciated it on a straight-line basis over a 35-year period. The estimated residual value is $102,000. After using the building for...
-
Cost Estimation, Interpretation, and Analysis (requires computer spreadsheet) Newport Table Company produces two styles of tables, dining room and kitchen. Attached is monthly information on...
-
Payments of1,000pa are payable quarterly in arrears from1/1/20to31/12/25. The annual effective rate of interest is3.4%for calendar years2020-2023(inclusive)and4.2% thereafter. Calculate: (i)the...
-
Obtain the Boolean expression for the following diagram:
-
Q1 The company adopted the following depreciation policy for its non-current assets: Information: Useful Life Residual Value Building 40 Nil Equipment 10 10% of cost price On 1 December 20X2, the...
-
1. A debt of $7000 is to be amortized with 6 equal semiannual payments. If the interest rate is 11%, compounded semiannually, what is the size of each payment? (Round your answer to the nearest...
-
To complete this key resonance structure showing the effect OCH3 on OH Draw key resonance structure. Which symbol / word is needed? 1 OH 2 6 H3C 8- 8+ no .. -bond stable unstable ne A B C D E F G H I...
-
Read/Review the following article. Use the AD-AS model to explain the current macroeconomics issue we are facing today: inflation. Your graph can be hand or computer drawn. Make sure to label the...
-
The following costs result from the production and sale of 4,100 drum sets manufactured by Tight Drums Company for the year ended December 31, 2019. The drum sets sell for $260 each. The company has...
-
What is a budget decrement? LO2
-
Why is it important to use outside auditors rather than inside auditors who would be more familiar with the company and the project? LO3
-
What must the PM do in planning, scheduling, monitoring, and closing out the project? LO2
![Mobile App Logo](https://dsd5zvtm8ll6.cloudfront.net/includes/images/mobile/finalLogo.png)
Study smarter with the SolutionInn App