Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

PLEASE HELP. ON THE FIRST TWO PICS I ONLY NEED THE BOTTOM HALF Sentinel Company is considering an investment in technology to improve its operations.

PLEASE HELP. ON THE FIRST TWO PICS I ONLY NEED THE BOTTOM HALFimage text in transcribedimage text in transcribedimage text in transcribedimage text in transcribed

Sentinel Company is considering an investment in technology to improve its operations. The investment will require an initial outlay of $245,000 and will yield the following expected cash flows. Management requires investments to have a payback period of 3 years, and it requires a 10% return on investments. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the table provided.) Period 1 2 3 4 5 U WNP Cash Flow $ 48,200 53,000 77,000 94,400 126,300 Required: 1. Determine the payback period for this investment. 2. Determine the break-even time for this investment. 3. Determine the net present value for this investment. Required 1 Required 2 Required 3 Determine the payback period for this investment. (Enter cash outflows with a minus sign. to 1 decimal place.) Cumulative Net Cash inflow Year Cash Inflow (outflow) (outflow) 0 $ (245,000)| $ (245,000) 1 48,200 (196,800) 2 53,000 (143,800) 3 77,000 (66,800) 4 94,400 27,600 5 126,300 153,900 153,900 Calculate the payback period: Payback occurs between year: 3 Calculate the portion of the year: Numerator for partial year Denominator for partial year and year: 4 0 Payback period = 3.7 years Required 1 Required 2 Required 3 Determine the break-even time for this investment. (Enter cash outflows with a minus sign. Round y answer to 1 decimal place.) Year Cash inflow (outflow) Table factor Present Value of Cash Flows Cumulative Present Value of Cash Flows 0 1.0000 1 0.9090 $ 2 0.8260 | (245,000) 48,200 53,000 77,000 94,400 126,300 153,900 (245,000) $ 43,814 43,778 57,827 64,475 78,432 (245,000) (201,186) (157,408) (99,581) (35,106) 43,326 3 0.7510 $ 4 0.6830 $ $ 5 0.6210 Calculate the break even time: Break-even time occurs between year: 3 and year: 4 Calculate the portion of the year: Numerator for partial year Denominator for partial year 0 Break-even time = 4.5 years Required 1 Required 2 Required 3 Determine the net present value for this invest Net present value

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Software Licence Compliance Survive The Audits

Authors: R. Concessao

1st Edition

1539161560, 978-1539161561

More Books

Students also viewed these Accounting questions

Question

What benefits do you deliver to your customers?

Answered: 1 week ago

Question

I am paid fairly for the work I do.

Answered: 1 week ago

Question

I receive the training I need to do my job well.

Answered: 1 week ago