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Please do all five. thank you ! Required information [The following information applies to the questions displayed below.) Falcon Crest Aces (FCA), Inc., is considering
Please do all five. thank you
! Required information [The following information applies to the questions displayed below.) Falcon Crest Aces (FCA), Inc., is considering the purchase of a small plane to use in its wing-walking demonstrations and aerial tour business. Various information about the proposed investment follows: $ Initial investment Useful life Salvage value Annual net income generated FCA's cost of capital $ 210,000 10 years 20,000 $ 4,800 7% Assume straight line depreciation method is used. Required: Help FCA evaluate this project by calculating each of the following: 1. Accounting rate of return. (Round your answer to 2 decimal places.) Accounting Rate of Return % 2. Help FCA evaluate this project by calculating each of the following: Payback period. (Round your answer to 2 decimal places.) Payback Period years 3. Help FCA evaluate this project by calculating each of the following: Net present value (NPV). (Future Value of $1, Present Value of $1, Future Value Annuity of $1, Present Value Annuity of $1.) (Use appropriate factor(s) from the tables provided. Do not round intermediate calculations. Negative amount should be indicated by a minus sign. Round the final answer to nearest whole dollar.) Net Present Value 4. Help FCA evaluate this project by calculating each of the following: Recalculate FCA's NPV assuming the cost of capital is 3 percent. (Future Value of $1, Present Value of $1, Future Value Annuity of $1, Present Value Annuity of $1.) (Use appropriate factor(s) from the tables provided. Round your final answer to the nearest whole dollar amount.) Net Present Value 5. Without doing any calculations, what is the project's IRR? Multiple Choice Between 3% and 7% Greater than 7% Less than 3%Step by Step Solution
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