Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Harry's Seafoodis considering the addition of a fish hatchery. Construction of the facility is estimated to cost $1,100,000 and will be depreciated over 10 years
Harry's Seafoodis considering the addition of a fish hatchery. Construction of the facility is estimated to cost $1,100,000 and will be depreciated over 10 years using the straight-line method. The hatchery is expected to have no estimated residual value. Harry's Seafood has a required rate of return of 12%. Incremental net income related to each year of the investment is as follows: Revenue $450,000 Expenses: Material cost $60,000 Labor 100,000 Depreciation 110,000 Other 10,000 280,000 Income before taxes 170,000 Income tax expense at 40% 68,000 Net income $102,000 DA table displays the present value of an annuity of $1 per period. There are fourteen columns. The first column displays index and the next 13 columns are: 6%, 7%, 8%, 9%, 10%, 11%, 12%, 13%, 14%, 15%, 16%, 20%, and 30%. The table data are: 1:6%, 0.9434,7%, 0.9346; 8%, 0.9259; 9%, 0.9174; 10%, 0.9091; 11%, 0.9009; 12%, 0.8929; 13%, 0.8850; 14%, 0.8772; 15%, 0.8696; 16%, 0.8621; 20%, 0.8333; 30%, 0.7692. 2: 6%, 1.8334; 7%, 1.8080; 8%, 1.7833; 9%, 1.7591; 10%, 1.7355; 11%, 1.7125; 12%, 1.6901; 13%, 1.6681; 14%, 1.6467, 15%, 1.6257, 16%, 1.6052; 20%, 1.5278; 30%, 1.3609.3: 6%, 2.6730; 7%, 2.6243; 8%, 2.5771; 9%, 2.5313; 10%, 2.4869; 11%, 2.4437; 12%, 2.4018; 13%, 2.3612; 14%, 2.3216; 15%, 2.2832; 16%, 2.2459; 20%, 2.1065; 30%, 1.8161. 4:6%, 3.4651; 7%, 3.3872; 8%, 3.3121; 9%, 3.2397; 10%, 3.1699; 11%, 3.1024; 12%, 3.0373; 13%, 2.9745; 14%, 2.9137, 15%, 2.8550; 16%, 2.7982; 20%, 2.5887; 30%, 2.1662. 5:6%, 4.2124; 7%, 4.1002; 8%, 3.9927; 9%, 3.8897; 10%, 3.7908; 11%, 3.6959, 12%, 3.6048; 13%, 3.5172, 14%, 3.4331; 15%, 3.3522; 16%, 3.2743; 20%, 2.9906; 30%, 2.4356. 6:6%, 4.9173; 7%, 4.7665; 8%, 4.6229; 9%, 4.4859; 10%, 4.3553; 11%, 4.2305; 12%, 4.1114; 13%, 3.9975; 14%, 3.8887, 15%, 3.7845, 16%, 3.6847; 20%, 3.3255; 30%, 2.6427.7:6%, 5.5824; 7%, 5.3893; 8%, 5.2064; 9%, 5.0330; 10%, 4.8684; 11%, 4.7122; 12%, 4.5638; 13%, 4.4226; 14%, 4.2883; 15%, 4.1604; 16%, 4.0386; 20%, 3.6046; 30%, 2.8021. 8: 6%, 6.2098; 7%, 5.9713; 8%, 5.7466; 9%, 5.5348; 10%, 5.3349; 11%, 5.1461; 12%, 4.9676; 13%, 4.7988; 14%, 4.6389; 15%, 4.4873; 16%, 4.3436; 20%, 3.8372; 30%, 2.9247. 9:6%, 6.8017; 7%, 6.5152; 8%, 6.2469; 9%, 5.9952; 10%, 5.7590; 11%, 5.5370; 12%, 5.3282; 13%, 5.1317; 14%, 4.9464; 15%, 4.7716; 16%, 4.6065; 20%, 4.0310; 30%, 3.0190. 10: 6%, 7.3601; 7%, 7.0236; 8%, 6.7101, 9%, 6.4177, 10%, 6.1446; 11%, 5.8892; 12%, 5.6502; 13%, 5.4262; 14%, 5.2161; 15%, 5.0188; 16%, 4.8332; 20%, 4.1925; 30%, 3.0915. 11:6%, 7.8869, 7%, 7.4987, 8%, 7.1390; 9%, 6.8052; 10%, 6.4951; 11%, 6.2065; 12%, 5.9377; 13%, 5.6869; 14%, 5.4527; 15%, 5.2337; 16%, 5.0286; 20%, 4.3271; 30%, 3.1473. 12:6%, 8.3838; 7%, 7.9427; 8%, 7.5361; 9%, 7.1607; 10%, 6.8137; 11%, 6.4924; 12%, 6.1944; 13%, 5.9176; 14%, 5.6603; 15%, 5.4206; 16%, 5.1971; 20%, 4.4392; 30%, 3.1903. 13: 6%, 8.8527; 7%, 8.3577; 8%, 7.9038; 9%, 7.4869; 10%, 7.1034; 11%, 6.7499, 12%, 6.4235; 13%, 6.1218; 14%, 5.8424; 15%, 5.5831; 16%, 5.3423, 20%, 4.5327; 30%, 3.2233. 14: 6%, 9.2950; 7%, 8.7455; 8%, 8.2442; 9%, 7.7862; 10%, 7.3667; 11%, 6.9819; 12%, 6.6282; 13%, 6.3025; 14%, 6.0021; 15%, 5.7245, 16%, 5.4675; 20%, 4.6106; 30%, 3.2487. 15: 6%, 9.7122; 7%, 9.1079; 8%, 8.5595; 9%, 8.0607; 10%, 7.6061; 11%, 7.1909; 12%, 6.8109; 13%, 6.4624; 14%, 6.1422; 15%, 5.8474; 16%, 5.5755; 20%, 4.6755; 30%, 3.2682. 16: 6%, 10.1059; 7%, 9.4466; 8%, 8.8514; 9%, 8.3126; 10%, 7.8237; 11%, 7.3792; 12%, 6.9740; 13%, 6.6039; 14%, 6.2651; 15%, 5.9542; 16%, 5.6685; 20%, 4.7296; 30%, 3.2832. 17:6%, 10.4773; 7%, 9.7632; 8%, 9.1216; 9%, 8.5436; 10%, 8.0216; 11%, 7.5488; 12%, 7.1196; 13%, 6.7291; 14%, 6.3729; 15%, 6.0472; 16%, 5.7487; 20%, 4.7746; 30%, 3.2948. 18: 6%, 10.8276; 7%, 10.0591; 8%, 9.3719; 9%, 8.7556; 10%, 8.2014; 11%, 7.7016; 12%, 7.2497; 13%, 6.8399; 14%, 6.4674; 15%, 6.1280; 16%, 5.8178; 20%, 4.8122; 30%, 3.3037. 19: 6%, 11.1581; 7%, 10.3356; 8%, 9.6036; 9%, 8.9501; 10%, 8.3649; 11%, 7.8393; 12%, 7.3658; 13%, 6.9380; 14%, 6.5504; 15%, 6.1982; 16%, 5.8775; 20%, 4.8435; 30%, 3.3105. 20:6%, 11.4699; 7%, 10.5940; 8%, 9.8181; 9%, 9.1285; 10%, 8.5136; 11%, 7.9633; 12%, 7.4694; 13%, 7.0248; 14%, 6.6231; 15%, 6.2593; 16%, 5.9288; 20%, 4.8696; 30%, 3.3158. Determine the net present value of the investment. (Round present value factor calculations to 4 decimal places, e.g. 1.2151 and final answer to 0 decimal places, e.g. 5,275. Enter negative amounts using either a negative sign preceding the number e.g. -5,275 or parentheses e.g. (5,275).) $ enter the net present value in dollars rounded to 0 decimal places Net present value L Should Harry's Seafood invest in the hatchery? Harry's Seafood select an effect. should invest in the hatchery. eTextbook and Media Calculate the internal rate of return of the investment to the nearest V2 percent. (Round answer to 1 decimal place, e.g. 15.5%.) enter internal rate of return in percentages rounded to 1 decimal place Internal rate of return % Should Harry's Seafood invest in the hatchery? Harry's Seafood select an effect. should v invest in the hatchery. eTextbook and Media Calculate the internal rate of return of the investment to the nearest y percent. (Round answer to 1 decimal place, e.g. 15.5%.) enter internal rate of return in percentages rounded to 1 decimal place Internal rate of return % eTextbook and Media Calculate the payback period of the investment. (Round answer to 3 decimal places, e.g. 15.253.) enter payback period in years rounded to 3 decimal places Payback period Years Nnj eTextbook and Media Calculate the accounting rate of return. (Round answer to 2 decimal places, e.g. 15.25%.) enter rate of return in percentages rounded to 2 decimal places Rate of return %
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored 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