Question
I need help calculating the bold portions. Revenues $650,000 Less: Materials $70,000 Labor 150,000 Deprciation 80,000 Other 10,000 310,000 Income before Taxes 340,000 Taxes @
I need help calculating the bold portions.
Revenues $650,000 Less: Materials $70,000 Labor 150,000 Deprciation 80,000 Other 10,000 310,000 Income before Taxes 340,000 Taxes @ 40% 136,000 Net Income $204,000 New Production Building 800,000 Deprecaition Years 10 Required Rate of Return 12% Net Present Value Net Income $204,000 Add Depreciation 80,000 Annual Cash Flow $284,000 Cash Flow 12% Present Value Factors PV Amounts $284,000 $5.6502 $1,604,657 ($800,000) 1 ($800,000) $804,657 Calculate IRR Initial Outlay Annuity Amount PV of Annuity Factor Reduce Expenses each year Cash Flow -800,000 $284,000 $284,000 $284,000 $284,000 $284,000 $284,000 $284,000 $284,000 $284,000 $284,000 Required Rate of Return 12% IRR Calculate PayBack Period Initial Outlay Annual Cash flow $284,000 Number of Year to Recover initial Investment Calculate Accounting Rate of Return Average Income Average Investment Accounting Rate of Return Will you invest in the new production facility? Why or Why Not? What nonfinancial information will you consider in your decision?
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