question 13
Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required 5 Compute the net present value for this machine using a discount rate of 6% and assuming that cash flows occur at each year-end. (Hint: Salvage value is a cash inflow at the end of the asset's life.) (Do not round intermediate calculations. Amounts to be deducted should be indicated by a minus sign.) Chart Values are Based on: n = % Cash Flow Select Chart Amount PV Factor Present Value Annual cash flow $ 0 Present Value of an Annuity of 1 Present Value of 1 Residual value ol Present value of cash inflows Present value of cash outflows Net present value Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required 5 Determine expected net income and net cash flow for each year of this machine's life. Expected Net Income Revenues Sales Expenses Direct materials Direct labor Overhead excluding straight-line depreciation on new machine Straight-line depreciation on new machine Selling and administrative expenses 0 Expected Net Cash Flow 0 Net cash flow Factor Company is planning to add a new product to its line. To manufacture this product, the company needs to buy a new machine at a $515,000 cost with an expected four-year life and a $23,000 salvage value. All sales are for cash, and all costs are out-of-pocket, except for depreciation on the new machine. Additional information includes the following. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.) $1,960,000 Expected annual sales of new product Expected annual costs of new product Direct materials Direct labor Overhead (excluding straight-line depreciation on new machine) Selling and administrative expenses Income taxes 495,000 672,000 337,000 142,000 34% Required: 1. Compute straight-line depreciation for each year of this new machine's life. 2. Determine expected net income and net cash flow for each year of this machine's life. 3. Compute this machine's payback period, assuming that cash flows occur evenly throughout each year. 4. Co ute this machine's accounting rate of return, iming that income is earned eve 5. Compute the net present value for this machine using a discount rate of 6% and assuming that cash flows occur at each year-end. (Hint. Salvage value is a cash inflow at the end of the asset's life.) each year. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required 5 Compute straight-line depreciation for each year of this new machine's life. Straight-line depreciation
