Please provide me with step by step explanations for each and every MULTIPLE CHOICE QUESTION with formulas. The answers are already given. Hope to hear from you soon. Thanks

Please provide with step by step explanations for each and every question with formulas. The answers are already given. Thanks 1. Mini Inc. is contemplating a capital project costing $31,346. The project will provide annual cost savings of $12,000 for 3 years and have a salvage value of $2,000. The company's required rate of return is 10%. The company uses straight-line depreciation. Year 1 2 3 Present Value of 1 at 10% .909 .826 .751 PV of an Annuity of 1 at 10% .909 1.736 2.487 This project is d. acceptable because it has a zero NPV. 2. Johnson Corp. has an 8% required rate of return. It's considering a project that would provide annual cost savings of $30,000 for 5 years. The most that Johnson would be willing to spend on this project is Year 1 2 3 4 5 Present Value of 1 at 8% .926 .857 .794 .735 .681 PV of an Annuity of 1 at 8% .926 1.783 2.577 3.312 3.993 c. $119,790. c. included using conservative estimated values. 3. Miles, Inc. is considering the purchase of a new machine for $200,000 that has an estimated useful life of 5 years and no salvage value. The machine will generate net annual cash flows of $35,000. It is believed that the new machine will reduce downtime because of its reliability. Assume the discount rate is 8%. In order to make the project acceptable, the reduction in downtime must be worth Year 1 2 3 4 5 d. $15,088 per year. Present Value of 1 at 8% .926 .857 .794 .735 .681 PV of an Annuity of 1 at 8% .926 1.783 2.577 3.312 3.993 4. The following information is available for a potential investment for Panda Company: Initial investment Net annual cash inflow Net present value Salvage value Useful life $80,000 20,000 36,224 10,000 10 yrs. The potential investment's profitability index is d. 1.45. 5. A project with an initial investment of $50,000 and a profitability index of 1.239 also has an internal rate of return of 12%. The present value of net cash flows is b. $61,950. 6. A project with a profitability index of 1.156 also has net cash flows with a present value of $46,240. The project's internal rate of return was 10%. The initial investment was c. $40,000. Use the following information for questions 7 and 8. Selma Inc. is comparing several alternative capital budgeting projects as shown below: Initial investment Present value of net cash flows A $40,000 60,000 Projects B C $60,000 $ 80,000 55,000 100,000 7. Using the profitability index, the projects rank as a. A, C, B. 8. Using the profitability index, how many of the projects are acceptable? b. 2 Use the following information for questions 9-11. Cleaners, Inc. is considering purchasing equipment costing $30,000 with a 6-year useful life. The equipment will provide cost savings of $7,300 and will be depreciated straight-line over its useful life with no salvage value. Cleaners requires a 10% rate of return. Period 6 8% 4.623 Present Value of an Annuity of 1 9% 10% 11% 12% 4.486 4.355 4.231 4.111 9.What is the approximate net present value of this investment? b. $1,792 15% 3.784 10.What is the approximate profitability index associated with this equipment? c. 1.06 11.What is the approximate internal rate of return for this investment? d. 12% Use the following table for questions 12-14. Periods 1 2 3 Present Value of an Annuity of 1 8% 9% 10% .926 .917 .909 1.783 1.759 1.736 2.577 2.531 2.487 12. A company has a minimum required rate of return of 9%. It is considering investing in a project that costs $140,000 and is expected to generate cash inflows of $56,000 at the end of each year for three years. The net present value of this project is d. $1,736. 13. A company has a minimum required rate of return of 9%. It is considering investing in a project that costs $50,000 and is expected to generate cash inflows of $20,000 at the end of each year for three years. The profitability index for this project is c. 1.01. 14. A company has a minimum required rate of return of 8%. It is considering investing in a project that costs $68,337 and is expected to generate cash inflows of $27,000 each year for three years. The approximate internal rate of return on this project is b. 9%. Use the following information for questions 15-18. Carr Company is considering two capital investment proposals. Estimates regarding each project are provided below: Project Soup Project Nuts Initial investment $400,000 $600,000 Annual net income 20,000 42,000 Net annual cash inflow 100,000 142,000 Estimated useful life 5 years 6 years Salvage value -0-0The company requires a 10% rate of return on all new investments. Periods 5 6 Present Value of an Annuity of 1 9% 10% 11% 12% 3.890 3.791 3.696 3.605 4.486 4.355 4.231 4.111 15. The cash payback period for Project Soup is d. 4 years. 16. The net present value for Project Nuts is d. $18,410. 17. The internal rate of return for Project Nuts is approximately b. 11%. 18.The annual rate of return for Project Soup is b. 10%. 19. 20. In using the internal rate of return method, the internal rate of return factor was 4.0 and the equal annual cash inflows were $12,000. The initial investment in the project must have been c. $48,000. If a project costing $50,000 has a profitability index of 1.00 and the discount rate was 12%, then the present value of the net cash flows was a. $50,000. 21.If a 2-year capital project has an internal rate of return factor equal to 1.690 and net annual cash flows of $40,000, the initial capital investment was a. $67,600. 22. 23. If a 3-year capital project costing $38,655 has an internal rate of return factor equal to 2.577, the net annual cash flows assuming straight-line depreciation are b. $15,000. Use the following table, Present Value of an Annuity of 1 Period 8% 9% 10% 1 .926 .917 .909 2 1.783 1.759 1.736 3 2.577 2.531 2.487 A company has a minimum required rate of return of 8%. It is considering investing in a project that costs $227,790 and is expected to generate cash inflows of $90,000 each year for three years. The approximate internal rate of return on this project is b. 9%. 24 . A company is considering purchasing a machine that costs $320,000 and is estimated to have no salvage value at the end of its 8-year useful life. If the machine is purchased, annual revenues are expected to be $100,000 and annual operating expenses exclusive of depreciation expense are expected to be $38,000. The straight-line method of depreciation would be used. If the machine is purchased, the annual rate of return expected on this machine is d. 13.8%. 25.A company projects an increase in net income of $225,000 each year for the next five years if it invests $900,000 in new equipment. The equipment has a five-year life and an estimated salvage value of $300,000. What is the annual rate of return on this investment? b. 37.5% 26.Garza Company is considering buying equipment for $240,000 with a useful life of five years and an estimated salvage value of $12,000. If annual expected income is $21,000, the denominator in computing the annual rate of return is c. $126,000. 27.Mussina Company had an investment which cost $260,000 and had a salvage value at the end of its useful life of zero. If Mussina's expected annual net income is $15,000, the annual rate of return is: c. 11.5%. 28.A project has an annual rate of return of 15%. The project cost $80,000, has a 5-year useful life, and no salvage value. Straight-line depreciation is used. The annual net income, exclusive of depreciation, was b. $22,000. 29. A project that cost $50,000 has a useful life of 5 years and a salvage value of $2,000. The internal rate of return is 12% and the annual rate of return is 18%. The amount of the annual net income was a. $4,680. 30.A project has annual income exclusive of depreciation of $60,000. The annual rate of return is 15% and annual depreciation is $15,000. There is no salvage value. The internal rate of return is 12%. The initial cost of the project was d. $600,000. 31. A project that cost $80,000 with a useful life of 5 years is being considered. Straight-line depreciation is being used and salvage value is $5,000. The project will generate annual cash flows of $21,375. The annual rate of return is a. 15%. Use the following information for questions 32 and 33. A company is considering purchasing factory equipment that costs $480,000 and is estimated to have no salvage value at the end of its 8-year useful life. If the equipment is purchased, annual revenues are expected to be $135,000 and annual operating expenses exclusive of depreciation expense are expected to be $57,000. The straight-line method of depreciation would be used. 32. 33. If the equipment is purchased, the annual rate of return expected on this equipment is c. 7.5%. The cash payback period on the equipment is c. 6.2 years. 34 . A company projects an increase in net income of $60,000 each year for the next five years if it invests $300,000 in new equipment. The equipment has a five-year life and an estimated salvage value of $100,000. What is the annual rate of return on this investment? b. 30% 35. Colaw Company is considering buying equipment for $80,000 with a useful life of five years and an estimated salvage value of $4,000. If annual expected income is $7,000, the denominator in computing the annual rate of return is c. $42,000. 36. If $20,000 is put in a savings account paying interest of 4% compounded annually, what amount will be in the account at the end of 5 years? d. $24,333 37. The future value of 1 factor will always be b. greater than 1. 38. McGoff Company deposits $15,000 in a fund at the end of each year for 5 years. The fund pays interest of 4% compounded annually. The balance in the fund at the end of 5 years is computed by multiplying d. $15,000 by the future value of an annuity factor. 39. If $20,000 is deposited in a savings account at the end of each year and the account pays interest of 5% compounded annually, what will be the balance of the account at the end of 10 years? c. $251,558 40. If you are able to earn an 8% rate of return, what amount would you need to invest to have $20,000 one year from now? b. $18,519 41. If you are able to earn a 15% rate of return, what amount would you need to invest to have $10,000 one year from now? d. $8,696 42. If the single amount of $2,500 is to be received in 2 years and discounted at 11%, its present value is b. $2,029. 43. If the single amount of $5,000 is to be received in 3 years and discounted at 6%, its present value is a. $4,198. 44. Which of the following discount rates will produce the smallest present value? c. 10% 45. Suppose you have a winning lottery ticket and you are given the option of accepting $5,000,000 three years from now or taking the present value of the $5,000,000 now. The sponsor of the prize uses a 6% discount rate. If you elect to receive the present value of the prize now, the amount you will receive is a. $4,198,100. 46. The amount you must deposit now in your savings account, paying 6% interest, in order to accumulate $4,000 for a down payment 5 years from now on a new car is b. $2,989. 47. The amount you must deposit now in your savings account, paying 5% interest, in order to accumulate $5,000 for your first tuition payment when you start college in 3 years is c. $4,319. 48. Dexter Company is considering purchasing equipment. The equipment will produce the following cash flows: Year 1 $60,000 Year 2 $100,000 Dexter requires a minimum rate of return of 10%. What is the maximum price Dexter should pay for this equipment? a. $137,190 34. If Sloane Joyner invests $14,019.74 now and she will receive $40,000 at the end of 11 years, what annual rate of interest will she be earning on her investment? d. 10% 35. Suzy Douglas has been offered the opportunity of investing $91,925 now. The investment will earn 8% per year and at the end of its life will return $250,000 to Suzy. How many years must Suzy wait to receive the $250,000? d. 13 36. Peter Johnson invests $21,310.08 now for a series of $3,000 annual returns beginning one year from now. Peter will earn 10% on the initial investment. How many annual payments will Peter receive? c. 13 38. A $10,000, 8%, 5-year note payable that pays interest quarterly would be discounted back to its present value by using tables that would indicate which one of the following period-interest combinations? c. 20 interest periods, 2% interest 39. Hazel Company has just purchased equipment that requires annual payments of $30,000 to be paid at the end of each of the next 4 years. The appropriate discount rate is 15%. What is the present value of the payments? a. $85,649 40. Perdue Company has purchased equipment that requires annual payments of $20,000 to be paid at the end of each of the next 6 years. The appropriate discount rate is 12%. What amount will be used to record the equipment? b. $82,228