Need help completing seven multi step accounting questions. please explain how answer was achieved and explain work. I'm having difficulty picking up the concepts. Questions are attached as well as supporting material for appendix A

\f\\ \\ The owner of Waco Waffle House is considering an expansion of the business. He has identified two alternatives, as follows: Build a new restaurant near the mall. Buy and renovate an old building downtown for the new restaurant. The projected cash flows from these two alternatives are shown below. The owner of the restaurant uses a 6 percent after-tax discount rate. Cash Outflow: Time 0 Investment Proposal Mall restaurant Downtown restaurant $ 872,000 337,500 Net After-Tax Cash Inflows* Years 11- Years 1-10 20 $ 78,500 $ 78,500 49,000 * Includes after-tax cash flows from all sources, including incremental revenue, incremental expenses, and depreciation tax shield. Use Appendix A for your reference. (Use appropriate factor(s) from the tables provided.) Required: 1. Compute the net present value of each alternative restaurant site. 2. Compute the profitability index for each alternative. 3. How do the two sites rank in terms of NPV and the profitability index? Compute the net present value of each alternative restaurant site. (Round your final answers to the nearest dollar.) Net Present Value Mall restaurant Downtown restaurant Compute the profitability index for each alternative. (Round your answers to 2 decimal places.) Profitablility Index Mall restaurant Downtown restaurant How do the two sites rank in terms of NPV and the profitability index? NPV Profitablility Index Mall restaurant Downtown restaurant Answer each of the following independent questions. Ignore personal income taxes. Use Appendix A for your reference. (Use appropriate factor(s) from the tables provided.) Required: 1. Suppose you invest $3,000 in an account bearing interest at the rate of 14 percent per year. What will be the future value of your investment in six years? 2. Your best friend won the state lottery and has offered to give you $10,500 in five years, after he has made his first million dollars. You figure that if you had the money today, you could invest it at 12 percent annual interest. What is the present value of your friend's future gift? 3. In four years, you would like to buy a small cabin in the mountains. You estimate that the property will cost you $57,500 when you are ready to buy. How much money would you need to invest each year in an account bearing interest at the rate of 6 percent per year in order to accumulate the $57,500 purchase price? 4. You have estimated that your educational expenses over the next three years will be $13,500 per year. How much money do you need in your account now in order to withdraw the required amount each year? Your account bears interest at 10 percent per year. 5. Required 1 6. Required 2 7. Required 3 8. Required 4 Suppose you invest $3,000 in an account bearing interest at the rate of 14 percent per year. What will be the future value of your investment in six years? (Round your answer to 2 decimal places.) The future value of the investment Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Your best friend won the state lottery and has offered to give you $10,500 in five years, after he has made his first million dollars. You figure that if you had the money today, you could invest it at 12 percent annual interest. What is the present value of your friend's future gift? (Round your answer to 2 decimal places.) The present value of the gift In four years, you would like to buy a small cabin in the mountains. You estimate that the property will cost you $57,500 when you are ready to buy. How much money would you need to invest each year in an account bearing interest at the rate of 6 percent per year in order to accumulate the $57,500 purchase price? (Round your answer to 2 decimal places.) Required investment per year In four years, you would like to buy a small cabin in the mountains. You estimate that the property will cost you $57,500 when you are ready to buy. How much money would you need to invest each year in an account bearing interest at the rate of 6 percent per year in order to accumulate the $57,500 purchase price? (Round your answer to 2 decimal places.) Required investment per year Required information [The following information applies to the questions displayed below.] Washington County's Board of Representatives is considering the construction of a longer runway at the county airport. Currently, the airport can handle only private aircraft and small commuter jets. A new, long runway would enable the airport to handle the midsize jets used on many domestic flights. Data pertinent to the board's decision appear below. Cost of acquiring additional land for 66,00 $ runway 0 255,0 Cost of runway construction 00 32,52 Cost of extending perimeter fence 5 34,00 Cost of runway lights 0 Annual cost of maintaining new 17,00 runway 0 Annual incremental revenue from 30,00 landing fees 0 In addition to the preceding data, two other facts are relevant to the decision. First, a longer runway will require a new snowplow, which will cost $125,000. The old snowplow could be sold now for $12,500. The new, larger plow will cost $8,500 more in annual operating costs. Second, the County Board of Representatives believes that the proposed long runway, and the major jet service it will bring to the county, will increase economic activity in the community. The board projects that the increased economic activity will result in $84,000 per year in additional tax revenue for the county. In analyzing the runway proposal, the board has decided to use a 10-year time horizon. The county's hurdle rate for capital projects is 15 percent. Use Appendix A for your reference. (Use appropriate factor(s) from the tables provided.) Required: 1. 1. Compute the initial cost of the investment in the long runway. 2. 2. Compute the annual net cost or benefit from the runway. 3. 3-a. Determine the IRR on the proposed long runway. (Round your answer to the nearest whole percent.) 4. 3-b. Should it be built considering IRR? Determine the IRR on the proposed long runway. (Round your answer to the nearest whole percent.) IRR % The following information applies to the questions displayed below.] Washington County's Board of Representatives is considering the construction of a longer runway at the county airport. Currently, the airport can handle only private aircraft and small commuter jets. A new, long runway would enable the airport to handle the midsize jets used on many domestic flights. Data pertinent to the board's decision appear below. Cost of acquiring additional land for 66,00 $ runway 0 255,0 Cost of runway construction 00 32,52 Cost of extending perimeter fence 5 34,00 Cost of runway lights 0 Annual cost of maintaining new 17,00 runway 0 Annual incremental revenue from 30,00 landing fees 0 In addition to the preceding data, two other facts are relevant to the decision. First, a longer runway will require a new snowplow, which will cost $125,000. The old snowplow could be sold now for $12,500. The new, larger plow will cost $8,500 more in annual operating costs. Second, the County Board of Representatives believes that the proposed long runway, and the major jet service it will bring to the county, will increase economic activity in the community. The board projects that the increased economic activity will result in $84,000 per year in additional tax revenue for the county. In analyzing the runway proposal, the board has decided to use a 10-year time horizon. The county's hurdle rate for capital projects is 15 percent. Use Appendix A for your reference. (Use appropriate factor(s) from the tables provided.) In analyzing the runway proposal, the board has decided to use a 10-year time horizon. The county's hurdle rate for capital projects is 15 percent. The County Board of Representatives believes that if the county conducts a promotional effort costing $25,500 per year, the proposed long runway will result in substantially greater economic development than was projected originally. However, the board is uncertain about the actual increase in county tax revenue that will result. Required: Suppose the board builds the long runway and conducts the promotional campaign. What would the increase in the county's annual tax revenue need to be in order for the proposed runway's internal rate of return to equal the county's hurdle rate of 15 percent? (Round intermediate and final answer to the nearest dollar amount.) The chief ranger of the state's Department of Natural Resources is considering a new plan for fighting forest fires in the state's forest lands. The current plan uses eight fire-control stations, which are scattered throughout the interior of the state forest. Each station has a four-person staff, whose annual compensation totals $370,000. Other costs of operating each base amount to $270,000 per year. The equipment at each base has a current salvage value of $290,000. The buildings at these interior stations have no other use. To demolish them would cost $27,000 each. The chief ranger is considering an alternative plan, which involves four firecontrol stations located on the perimeter of the state forest. Each station would require a six-person staff, with annual compensation costs of $470,000. Other operating costs would be $280,000 per base. Building each perimeter station would cost $370,000. The perimeter bases would need helicopters and other equipment costing $670,000 per station. Half of the equipment from the interior stations could be used at the perimeter stations. Therefore, only half of the equipment at the interior stations would be sold if the perimeter stations were built. The state uses a 10 percent hurdle rate for all capital projects. The chief ranger has decided to use a 10-year time period for the analysis. Use Appendix A for your reference. (Use appropriate factor(s) from the tables provided.) Required: 1. Use the incremental-cost approach to prepare a net-presentvalue analysis of the chief ranger's decision between the interior fire-control plan and the perimeter fire-control plan. (Round your "Discount factors" to 3 decimal places. Negative amounts should be indicated by a minus sign.) You plan to retire at age 40 after a highly successful but short career. You would like to accumulate enough money by age 40 to withdraw $229,000 per year for 40 years. You plan to pay into your account 15 equal installments beginning when you are 25 and ending when you are 39. Your account bears interest of 14 percent per year. Use Appendix A for your reference. (Use appropriate factor(s) from the tables provided.) Required: 1. How much do you need to accumulate in your account by the time you retire? (Round your final answer to the nearest dollar amount.) 2. How much do you need to pay into your account in each of the 15 equal installments? (Round your final answer to 2 decimal places.) The supervisor of the county Department of Transportation (DOT) is considering the replacement of some machinery. This machinery has zero book value but its current market value is $980. One possible alternative is to invest in new machinery, which has a cost of $40,800. This new machinery would produce estimated annual operating cash savings of $13,400. The estimated useful life of the new machinery is four years. The DOT uses straight-line depreciation. The new machinery has an estimated salvage value of $2,180 at the end of four years. The investment in the new machinery would require an additional investment in working capital of $3,000, which would be recovered after four years. If the DOT accepts this investment proposal, disposal of the old machinery and investment in the new equipment will take place on December 31, 20x1. The cash flows from the investment will occur during the calendar years 20x2 through 20x5. Use Appendix A for your reference. (Use appropriate factor(s) from the tables provided.) Required: Prepare a net-present-value analysis of the county DOT's machinery replacement decision. The county has a 10 percent hurdle rate. (Round your "Discount factors" to 3 decimal places and final dollar amounts to whole dollars. Negative amounts should be indicated by a minus sign.) Investment Proposal Mall restaurant Downtown restaurant Cash Outflow: Time 0 $ Year Mall Restaurant Downtown restaurant $900,389 $360,644 $ 28,389 $ 23,144 $ 1 2 $ 1.03 $ 1.07 2 1 Total NPV NPV rank Profitability index Profitability index rank Net After-Tax Cash Inflows* Years 1-10 872,000 $ 337,500 The future value of the investment $3,000, 14%, 6 years $ 6,585.00 The present value of the gift $10,500, 5 years, 12% 5,953.50 $ Required investment per year $57500, 6%, 4 years Required investment per year $13,500, 10%, 3 years 5957.98 $16,594.01 $ 10,138.50 Compute the initial cost of the investment in the long runway. Add: Cost of acquiring additional land for runway $ Add: Cost of runway construction $ Add: Cost of extending perimeter fence $ Add: Cost of runway lights $ Add: Cost of new snowplow $ Less: Sale of old snowplow $ Initial cost of the investment in the long runway $ 66,000 255,000 32,525 34,000 125,000 12,500 500,025 Compute the annual net cost or benefit from the runway. Annual Annual incremental revenue from landing fees $ Add: additional tax revenue Less: Annual cost of maintaining new runway $ Less: annual operating costs Annual net benefit $ PV IRR on the proposed long runway 30,000 $84,000 17,000 $8,500 88,500 $444,161.0 12% Should it be built considering IRR? No promotional effort costing $25,500 Annual costs Annual incremental revenue from landing fees $ Less: Annual cost of maintaining new runway $ Less: annual operating costs Less: Annual promotional effort costing Annual cost before tax $ Expected benefit $99,631.01 Additionl revenue required $120,631.01 Increase in revenue $36,631.01 30,000 17,000 $8,500 $25,500 (21,000) State's Department of Natural Resources Costs Eight fire-control stationsFour fire-control stations Annual compensation $ 370,000.00 $ 470,000 Other costs $2,160,000 $ 1,120,000 Salvage value $2,320,000 Demolish $ 108,000 Building $ 1,480,000 Helicopters and other equipment costing $ 2,680,000 Year Helicopters and other equipment Building Demolish Salvage value Annual compensation Other costs Total cash flow Discounting factor Present value Net present value Amount to accumulate $229,000, 40 years, 14% $ $ $ $ $ $ 0 (2,680,000) (1,480,000) (108,000) 2,320,000 (1,948,000) 1 -1948000 3,827,893.08 Incremental costs $ 100,000.00 $ (1,040,000) $ (2,320,000) $ 108,000 $ 1,480,000 $ 2,680,000 1 2 100000 100000 -1040000 -1040000 940000 940000 0.909 0.826 854545.454545455 776859.504132 $1,627,054.38 How much do you need to pay into your account in each of the 15 equal installments? $264,899.04 Time 0 $ Acquisition cost Investment in working capital Recovery of working capital Salvage value of old machinery $ Salvage value of new machinery Annual operating cash savings Total cash flow $ Discounting factor Present value $ Net present value Time 1 (40,800.00) $ $ $ 980.00 $ $ $ (39,820.00) $ 1 (39,820.00) $ Time 2 (3,000.00) 13,400.00 10,400.00 $ 0.909 9,454.55 $ ### ### ### ### ### 13,400.00 0.826 11,074.38 fter-Tax Cash Inflows* 78,500 49,000 Years 11-20 $ 78,500 mental costs 3 4 5 6 7 8 9 100000 100000 100000 100000 100000 100000 100000 -1040000 -1040000 -1040000 -1040000 -1040000 -1040000 -1040000 940000 940000 940000 940000 940000 940000 940000 0.751 0.683 0.621 0.564 0.513 0.467 0.424 706235.912847 642032.6480432 583666.0437 530605.4943 482368.6311 438516.9374 398651.7613 Time 3 $ $ $ $ $ $ Time 4 - $ ### 13,400.00 13,400.00 1.331 17,835.40 $ $ $ $ $ $ $ 3,000.00 2,180.00 13,400.00 18,580.00 0.683 12,690.39 11,234.72 10 100000 -1040000 940000 0.386 362410.6921 Investment Proposal Mall restaurant Downtown restaurant Cash Outflow: Time 0 $ Year Mall Restaurant Downtown restaurant $900,389 $360,644 $ 28,389 $ 23,144 $ 1 2 $ 1.03 $ 1.07 2 1 Total NPV NPV rank Profitability index Profitability index rank Net After-Tax Cash Inflows* Years 1-10 872,000 $ 337,500 The future value of the investment $3,000, 14%, 6 years $ 6,585.00 The present value of the gift $10,500, 5 years, 12% 5,953.50 $ Required investment per year $57500, 6%, 4 years Required investment per year $13,500, 10%, 3 years 5957.98 $16,594.01 $ 10,138.50 Compute the initial cost of the investment in the long runway. Add: Cost of acquiring additional land for runway $ Add: Cost of runway construction $ Add: Cost of extending perimeter fence $ Add: Cost of runway lights $ Add: Cost of new snowplow $ Less: Sale of old snowplow $ Initial cost of the investment in the long runway $ 66,000 255,000 32,525 34,000 125,000 12,500 500,025 Compute the annual net cost or benefit from the runway. Annual Annual incremental revenue from landing fees $ Add: additional tax revenue Less: Annual cost of maintaining new runway $ Less: annual operating costs Annual net benefit $ PV IRR on the proposed long runway 30,000 $84,000 17,000 $8,500 88,500 $444,161.0 12% Should it be built considering IRR? No promotional effort costing $25,500 Annual costs Annual incremental revenue from landing fees $ Less: Annual cost of maintaining new runway $ Less: annual operating costs Less: Annual promotional effort costing Annual cost before tax $ Expected benefit $99,631.01 Additionl revenue required $120,631.01 Increase in revenue $36,631.01 30,000 17,000 $8,500 $25,500 (21,000) State's Department of Natural Resources Costs Eight fire-control stationsFour fire-control stations Annual compensation $ 370,000.00 $ 470,000 Other costs $2,160,000 $ 1,120,000 Salvage value $2,320,000 Demolish $ 108,000 Building $ 1,480,000 Helicopters and other equipment costing $ 2,680,000 Year Helicopters and other equipment Building Demolish Salvage value Annual compensation Other costs Total cash flow Discounting factor Present value Net present value Amount to accumulate $229,000, 40 years, 14% $ $ $ $ $ $ 0 (2,680,000) (1,480,000) (108,000) 2,320,000 (1,948,000) 1 -1948000 3,827,893.08 Incremental costs $ 100,000.00 $ (1,040,000) $ (2,320,000) $ 108,000 $ 1,480,000 $ 2,680,000 1 2 100000 100000 -1040000 -1040000 940000 940000 0.909 0.826 854545.454545455 776859.504132 $1,627,054.38 How much do you need to pay into your account in each of the 15 equal installments? $264,899.04 Time 0 $ Acquisition cost Investment in working capital Recovery of working capital Salvage value of old machinery $ Salvage value of new machinery Annual operating cash savings Total cash flow $ Discounting factor Present value $ Net present value Time 1 (40,800.00) $ $ $ 980.00 $ $ $ (39,820.00) $ 1 (39,820.00) $ Time 2 (3,000.00) 13,400.00 10,400.00 $ 0.909 9,454.55 $ ### ### ### ### ### 13,400.00 0.826 11,074.38 fter-Tax Cash Inflows* 78,500 49,000 Years 11-20 $ 78,500 mental costs 3 4 5 6 7 8 9 100000 100000 100000 100000 100000 100000 100000 -1040000 -1040000 -1040000 -1040000 -1040000 -1040000 -1040000 940000 940000 940000 940000 940000 940000 940000 0.751 0.683 0.621 0.564 0.513 0.467 0.424 706235.912847 642032.6480432 583666.0437 530605.4943 482368.6311 438516.9374 398651.7613 Time 3 $ $ $ $ $ $ Time 4 - $ ### 13,400.00 13,400.00 1.331 17,835.40 $ $ $ $ $ $ $ 3,000.00 2,180.00 13,400.00 18,580.00 0.683 12,690.39 11,234.72 10 100000 -1040000 940000 0.386 362410.6921