Answered step by step
Verified Expert Solution
Question
00
1 Approved Answer
Happy Conpanty is considering the purchase of a ficw machine that wouli cost 5120,000 . The machiae would have a usefal life of 6 years.
Happy Conpanty is considering the purchase of a ficw machine that wouli cost 5120,000 . The machiae would have a usefal life of 6 years. Ilappy Company plans on using straight-line deprociation with an estimated salvage value of 50 . Happy Company has a hurdle rate of 8% and is subject to an income tax rate of 60%. The annual cash income is ectimated to be $40,000.PV TABIES CAN RE FOUND O V PAGE 13 4. The Accounting Rate of Retura (AROR) is: A. 6.17% B. 6.37% C. 6.67% D. 7.17% E. 7.67% 5. The Net Present Value (NPV) is: A. 512,444 B. $8,444 C. $10,444 D. $9,444 E. $11,444 6. The Profitability Index (P1) is: A. 1.08 B. 1.05 C. 1.11 D. 1.01 E. 1.15 7. The Payback period is: A. 4.09 years B. 4.39 years C. 4.49 year D. 4.19 yean E. 4.29 years 8. Using intepolation, the laternal Rate of Returs (IRR) is: A. 9.57% B. 11.57% C. 12.57% D. 13.57% E. 10.57%
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