Question Help The Borgin Company is a national portable building manufacturer. Its Benton plant will become ide on Present Value of $1 table December 31, 2017. Mary Carter, the corporate controller, has been asked to look at the options Present ole of Annuity of $1 table regarding the plant Future Value of $1 table (Click the icon to view the options) Future of Annuity of $1 table Bergin Company treats all cash flows as if they occur at the end of the year, and uses anfor tax required Read the movements rate of return of 10%. Bergin is subject to a 30% tax rate on all income, including capital gains. Requirement 1. Calculato not present value of each of the options and determine which option Berpin should select using the NPV anterion The net present value of Option is Begin the calculation of Option 2 by determining the shor-tax cash inflow for rent. Then, determine the wher-tax cash flow for the material purchases discount. Finally, determine the after-tax cash flow on sale of the plant and the total net present value (NPV) of Option 2. (Use factors to three decimal places, XXXX, and use a minus signor parentheses for a negative nel present value Enter the represent value of the investment rounded to the nearest whole dollar) Net Cash Present Value PV factor Inflow of Cash Flows Present value of net cash flows, Option 2 After-tax cash inflows from rent: Dec 31, 2018 Dec 31, 2010 Dec 31, 2000 Choose from any list or enter any number in the input fields and then continue to the next question Save for later The Borgin Company is a national portable building manufacturer. Its Benton plant will become ide on Present Value of $1 table December 31, 2017 Mary Carter, the corporate controller, has been asked to look at three options Present Value of Annuity of $1 table regarding the plant: Future Value of $1 table (Click the icon to view the options.) Future Value of Aeruity of $1 table Read the requirements Bergin Company treats all cash flows as if they occur at the end of the year, and uses an after-tax required rate of return of 10%. Bergin is subject to a 30% tax rate on all income, including capital gains Dec 31, 2021 After-tax cash inflows from discount on purchases: Dec 31, 2018 Dec 31, 2019 Dec 31, 2020 Dec 31, 2021 Present value of after-tax cash flow from sale of plant Net present value Option 2 Begin the calculation of Option 3 by determining the other tax cash inflow from operations (excluding depreciation). Then, determine the after tax cash savings from annual depreciation deductions. Finally, determine the after-tax cash inflow on sale of the plant and the total represent value (NPV) of Option 3. (Use factors to three decimal places, XXXX, and use a minus sign or perhees for a negative present value of net cash flows. Enter the represent value of the investment rounded to the nearest whole dolar) Natach Presenta Choose from any lot or enter any number in the input fields and then continue to the next question Save for Later 3 esc A # 3 $ 4 % 5 & 7 6 8 0 O Q W R T Y U m (Click the icon to view the options.) Future Value of Annuity of $1 table Read the requirements Bergin Company treats all cash flows as if they occur at the end of the year, and uses an after tax required rate of return of 10%. Bergin is subject to a 30% tax rate on all income, including capital gains Bogin the calculation of Option 3 by determining the after-tax cash inflow from operations (excluding depreciation). Then, determine the worlax cash savings from annual depreciation deductions. Finally, determine the after-tax cash inflow on sale of the plant and the total not present value (NPV) of Option 3. (Use factors to the decimal places, XXXX, and use a minus sign or perorthoses for a negative present value of net cash flows. Enter the net present value of the investment rounded to the nearest whole dollar.) Net Cash Inflow Present Value of Cash Flows PV factor Present value of net cash flows, Option 3: Initial equipment investment After-tax cash inflows from operations (excluding depreciation) Dec 31, 2018 Dec 31, 2019 Dec 31, 2020 Dec 31, 2021 - I ARA Choose from any list or enter any number the input fields and then continue to the next question Save for Later MacBook Pro F4 A # 3 $ 4 % 5 & 7 8 0 9 6 2 0 C E T Y L J G K H D A Bergin Company treats all cash flows as if they occur at the end of the year, and uses an after-tax required rate of return of 10%. Bergin is subject to a 30% tax rate on all income, including capital gains. After-tax cash savings from annual depreciation deductions: Dec 31, 2018 Dec 31, 2019 Dec 31, 2020 Dec 31, 2021 Present value of after-tax cash flow from sale of plant Net prenent valus, Option Bergin Company should choose for the Benton plant Requirement 2. What nonfinancial factors should Bergin consider before making its choice? Choose from any list or enter any number in the input fields and then continue to the next question Save for Later MacBook Pro SO ... esc FE F3 F5 F6 * # 3 % 5 & 7 6 8 9 H Bergin Company should choose for the enton plant Requirement 2. What nonfinancial factors should Bergin consider before making its choice? For each option, select one or more nonfinancial factors that Bergin should consider (Select all that apply. If a box is not used in the table, leave the box empty) Option 1 Option 2 Option 3 Choose from any list or enter any number in the input fields and then continue to the next question Save for Later MacBook Pro 4) esc F6 # 3 $ 4 % 5 & 7 0 6 B 2 O U W 70 T Y J D F UL H Requirement 2. What nonfinancial factors should Bergin consider before making its choice? For each option, select one or more nonfinancial factors that Bergin should consider. (Select all that apply. If a box is not used in the table, leave the box empty.) Option 1 Option 2 Failure to recognize savings from depreciation Gives Bergin immediate liquidity Gives Borgin a closer relationship with the supplier Has Bergin entering a new line of business Option 3 of successful, option could be expanded to cover other accessories Limits Bergin's flexibility if the supplier's quality is not comparable to competitors Limits Bergin's liquidity due to working capital requirements Potential risks of failing to meet predicted sales Choose from any list or enter any number in the input fields and then continue to the next question Save for Later MacBook Pro 189 SC F4 F2 * A # 3 $ 4 % 5 & 7 9 8 6 2 W E R Y T Question Help rk The Ralling Company is a national portable building manufacturer. Its Benton plant Present Value of $1 table will become idle on December 31, 2017. Mary Carter, the corporate controller, has Present Value of Annuity of $1 table been asked to look at three options regarding the plant: Future Value of $1 table (Click the icon to view the options.) Future Value of Annuity of $1 table Read the requirements Ralling Company treats all cash flows as if they occur at the end of the year, and uses an after-tax required rate of return of 8%. Ralling is subject to a 40% tax rate on all income, including capital gains. Test Requirement 1. Calculate net present value of each of the options and determine which option Ralling should select using the NPV criterion The net present value of Option 1 is Begin the calculation of Option 2 by determining the after tax cash inflow for rent. Then, determine the after-tax cash inflow for the material purchases discount. Finally, determine the after-tax cash inflow on sale of the plant and the total net present value (NPV) of Option 2. (Use factors to three decimal places, X.XXX, and use a minus sign or parentheses for a negative net present value. Enter the net present value of the investment rounded to the nearest whole dollar.) Net Cash Present Value PV factor Inflow of Cash Flows Choose from any list or enter any number in the input fields and then continue to the next question Save for Later see 06/07/20 Chap 4-6 Supplement Test EC 180min 1 of See 17 EPIC GA rate of return of 8%. Ralling is subject to a 40% tax rate on all income, Net Cash Present Value Inflow PV factor of Cash Flows Present value of net cash flows, Option 2: After-tax cash inflows from rent: Dec 31, 2018 Dec 31, 2019 Dec 31, 2020 Dec 31, 2021 After-tax cash inflows from discount on purchases: Dec 31, 2018 Dec 31, 2019 Dec 31, 2020 Dec 31, 2021 TUTTE Present value of after-tax cash flow from sale of plant Choose from any list or enter any number in the input fields and then continue to the next question. Save for Later Future Value of Annuity of $1 tabl (Click the icon to view the options.) Read the requirements. Ralling Company treats all cash flows as if they occur at the end of the year, and uses an after-tax required rate of return of 8%. Ralling is subject to a 40% tax rate on all income, including capital gains. Net Cash Present Value PV factor Inflow of Cash Flows Present value of net cash flows, Option 3: Initial equipment investment After-tax cash inflows from operations (excluding depreciation); Dec 31, 2018 Dec 31, 2019 Dec 31, 2020 Dec 31, 2021 After-tax cash savings from annual depreciation deductions: Dec 31, 2018 Dec 31, 2019 Dec 31, 2020 Dec 31, 2021 Choose from any list or enter any number in the input fields and then continue to the next question. Save for Later Present Value of $1 table Present Value of Annuity of $1 table Future Value of $1 table Future Value of Annuity of $1 table The Ralling Company is a national portable building manufacturer. Its Benton plant will become idle on December 31, 2017 Mary Carter, the corporate controller, has been asked to look at three options regarding the plant: (Click the icon to view the options.) Ralling Company treats all cash flows as if they occur at the end of the year, and uses an after-tax required rate of return of 8%. Ralling is subject to a 40% tax rate on all income, including capital gains, Present value of after-tax cash flow from Read the requirements sale of plant Net present value, Option 3 Ralling Company should choose for the Benton plant. Requirement 2. What nonfinancial factors should Ralling consider before making its choice? For each option, select one or more nonfinancial factors that Rolling should consider (Select all that apply. If a box is not used in the table, leave the box empty) Option 1 Option 2 Choose from any list or enter any number in the input fields and then continue to the next question. Save for Later The Ralling Company is a national portable building manufacturer. Its Benton plant will become idlo on December 31, 2017 Mary Carter, the corporate controller, has been asked to look at three options regarding the plant (Click the icon to view the options.) Ralling Company treats all cash flows as if they occur at the end of the year, and uses an after-tax required rate of return of 8%. Ralling is subject to a 40% tax rato on al income, including capital gains. Prosent Value of $1 table Prosent Value of Annuity of $1 table Future Value of $1 table Future Value of Annuity of $1 table Read the requirements Net present value, Option 3 Ralling Company should choose for the Benton plant. Requirement 2. What nonfinancial factors should Ralling consider before making its choice? For each option, select one or more nonfinancial factors that Rolling should consider. (Select all that apply. If a box is not used in the table, leave the box empty) Option 1 Option 2 Option 3 Choose from any list or enter any number in the input fields and then continue to the next question Save for Later fact -, has More Info - the e on all me Bent Ring con rs that Option 1: The plant, which has been fully depreciated for tax purposes, can be sold immediately for $720,000, Option 2: The plant can be leased to the Timber Corporation, one of Ralling's suppliers, for 4 years. Under the lease terms, Timber would pay Ralling $174,000 rent per year (payable at year-end) and would grant Ralling a $62,000 annual discount from the normal price of lumber purchased by Ralling. (Assume that the discount is received at year-end for each of the 4 years.) Timber would bear all of the plant's ownership costs. Ralling expects to sell this plant for $300,000 at the end of the 4-year lease. Option 3: The plant could be used for 4 years to make porch swings as an accessory to be sold with a portable building. Fixed overhead costs (a cash outflow) before any equipment upgrades are estimated to be $27,000 annually for the 4-year period. The swings are expected to sell for $50 each. Variable cost per unit is expected to be $26. The following production and sales of swings are expected: 2018, 13,000 units: 2019, 18,000 units: 2020, 16,000 units: 2021.9,000 units. In order to manufacture the swings, some of the plant equipment would need to be upgraded at an immediate cost of $170,000. The equipment would be depreciated using the straight-line depreciation method and zero terminal disposal value over the 4 years it would be in use. Because of the equipment upgrades, Ralling could sell the plant for $400,000 at the end of 4 years. No change in working capital would be required pty che input field Print Done come, including capital gains. Requirements . 1. Calculate net present value of each of the options and determine which option Ralling should select using the NPV criterion. What nonfinancial factors should Ralling consider before making its choice? 2. Print Done put fields and then continue to the next question. Present Value of $1 Periods 2% 4% Period 1 0.980 0.962 Period 2 0.961 0.925 Period 3 0.942 0.889 Period 4 0.924 0.855 Period 5 0.906 0.822 Period 6 0.888 0.790 Period 7 0.871 0.760 Period 8 0.853 0.731 Period 9 0.837 0.703 Period 10 0.820 0.676 Period 11 0.804 0.650 Period 12 0.788 0.625 Period 13 0.773 0.601 Period 14 0.758 0.577 Period 15 0.743 0.555 Period 16 0.7280534 6% 0.943 0.890 0.840 0.792 0.747 0.705 0.665 0.627 0.592 0.558 0.527 0.497 0.469 0.442 0.417 0 394 8% 0.926 0.857 0.794 0.735 0.681 0.630 0.583 0.540 0.500 0.463 0.429 0.397 0.368 0.340 0.315 0.292 10% 0.909 0.826 0.751 0.683 0.621 0.564 0.513 0.467 0.424 0.386 0.350 0.319 0.290 0.263 0.239 0.218 12% 0.893 0.797 0.712 0.636 0.567 0.507 0.452 0.404 0.361 0.322 0.287 0.257 0.229 0.205 0.183 0.163 14% 0.877 0.769 0.675 0.592 0.519 0.456 0.400 0.351 0.308 0.270 0.237 0.208 0.182 0.160 0.140 0.123 16% 0.862 0.743 0.641 0.552 0.476 0.410 0.354 0.305 0.263 0.227 0.195 0.168 0.145 0.125 0.108 0.093 18% 0.847 0.718 0.609 0.516 0.437 0.370 0.314 0.266 0.225 0.191 0.162 0.137 0.116 0.099 0.084 0.071 20% 0.833 0.694 0.579 0.482 0.402 0.335 0.279 0.233 0.194 0.162 0.135 0.112 0.093 0.078 0.065 0.054 22% 0.820 0.672 0.551 0.451 0.370 0.303 0.249 0.204 0.167 0.137 0.112 0.092 0.075 0.062 0.051 0.042 24% 0.806 0.650 0.524 0.423 0.341 0.275 0.222 0.179 0.144 0.116 0.094 0.076 0.061 0.049 0.040 0.032 26% 28% 30% 0.794 0.781 0.769 0.630 0.610 0.592 0.500 0.477 0.455 0.397 0.373 0.350 0.315 0.291 0.269 0.250 0.227 0.207 0.198 0.178 0.159 0.157 0.139 0.123 0.125 0.108 0.094 0.099 0.085 0.073 0.079 0.066 0.056 0.062 0.052 0.043 0.050 0.040 0.033 0.039 0.032 0.025 0.031 0.025 0.020 0.025 0.019 0.015 VOOOOOOOOOOOOOOOO 10 Print Done incom 11:59pm 150min 1 of Present Value of Annuity of $1.00 in Arrears Periods 2% 4% 6% 8% Period 1 0.980 0.962 0.943 0.926 Period 2 1.942 1.886 1.833 1.783 Porlod 3 2.884 2.775 2.673 2.577 Period 4 3.808 3.630 3.465 3.312 Period 5 4.713 4.452 4.212 3.993 Period 6 5.601 5.242 4.917 4.623 Period 7 6.472 6.002 5.582 5.206 Period 8 7.325 6.733 6.210 5.747 Period 9 8.162 7.435 6.802 6.247 Period 10 8.983 8.111 7.360 6.710 Period 11 9.787 8.760 7.887 7.139 Period 12 10.575 9.385 8.384 7.536 Period 13 11.348 9.986 8.853 7.904 Period 14 12.106 10.563 9.295 8.244 Period 15 12.849 11.118 9.712 8.569 Period 16 13.578 11.652 10.106 8851 10% 0.909 1.736 2.487 3.170 3.791 4.355 4.868 5.335 5.759 6.145 6.495 6.814 7.103 7.367 7.606 7.824 12% 0.893 1.690 2.402 3.037 3.605 4.111 4.564 4.968 5.328 5.650 5.938 6.194 6.424 6.628 6.811 6.974 14% 0.877 1.647 2.322 2.914 3.433 3.889 4.288 4.639 4.946 5.216 5.453 5.660 5.842 6.002 6.142 6265 16% 0.862 1.605 2.246 2.798 3.274 3.685 4.039 4.344 4.607 4.833 5.029 5.197 5.342 5.468 5.575 5.668 18% 0.847 1.566 2.174 2.690 3.127 3.498 3.812 4.078 4.303 4.494 4.656 4.793 4.910 5.008 5.092 5.162 20% 0.833 1.528 2.106 2.589 2.991 3.326 3.605 3.837 4.031 4.192 4.327 4.439 4.533 4.611 4.675 4.730 22% 0.820 1,492 2.042 2.494 2.864 3.167 3.416 3.619 3.786 3.923 4.035 4.127 4.203 4.265 4.315 4.357 24% 0.806 1.457 1.981 2.404 2.745 3.020 3.242 3.421 3.566 3.682 3.776 3.851 3.912 3.962 4.001 4.033 26% 0.794 1.424 1.923 2.320 2.635 2.885 3.083 3.241 3.366 3.465 3.543 3.606 3.656 3.695 3.726 3.751 28% 0.781 1.392 1.868 2.241 2.532 2.759 2.937 3.076 3.184 3.269 3.335 3.387 3.427 3.459 3.483 3.503 30% 0.769 1.361 1.816 2.166 2.436 2.643 2.802 2.925 3.019 3.092 3.147 3.190 3.223 3249 3.268 3.283 Print Done 11:59pm incomplete 06/07/20 Chapter Test 4,5,6 150min 1 of 1 a 18 AN EPIC DW t GAMES 0 Reference Compound Amount of $1.00 (The Future Value of $1.00) Periods 2% 4% 6% 8% 10% 12% Period 1 1.020 1.040 1.060 1.080 1.100 1.120 Period 2 1.040 1.082 1.124 1.166 1.210 1.254 Period 3 1.061 1.125 1.191 1.260 1.331 1.405 Period 4 1.082 1.170 1.262 1.360 1.464 1.574 Period 5 1.104 1.217 1.338 1.469 1.611 1.762 Period 6 1.126 1.265 1.419 1.587 1.772 1.974 Period 7 1.149 1.316 1.504 1.714 1.949 2.211 Period 8 1.172 1.369 1.594 1.851 2.144 2.476 Period 9 1.195 1.423 1.689 1.999 2.358 2.773 Period 10 1.219 1.480 1.791 2.159 2.594 3.106 Period 11 1.243 1.539 1.898 2.332 2.853 3.479 Period 12 1.268 1.601 2.012 2.518 3.138 3.896 Period 13 1.294 1.665 2.133 2.720 3.452 4.363 Period 14 1.319 1.732 2.261 2.937 3.797 4.887 Period 15 1.346 1.801 2.397 3.172 4.177 5.474 Period 16 1.373 1.873 2.540 3.426 4.595 6.130 14% 1.140 1.300 1.482 1.689 1.925 2.195 2.502 2.853 3.252 3.707 4.226 4.818 5,492 6.261 7.138 A.137 16% 1.160 1.346 1.561 1.811 2.100 2.436 2.826 3.278 3.803 4.411 5.117 5.936 6.886 7.988 9.266 10.748 18% 1.180 1.392 1.643 1.939 2.288 2.700 3.185 3.759 4,435 5.234 6.176 7 288 8.599 10.147 11.974 14 129 20% 1.200 1.440 1.728 2.074 2.488 2.986 3.583 4.300 5.160 6.192 7.430 8.916 10.699 12.839 15.407 18.488 22% 1.220 1.488 1.816 2.215 2.703 3.297 4.023 4.908 5.987 7.306 8.912 10.872 13.264 16.182 19.742 24 OAR 24% 1.240 1.538 1.907 2.364 2.932 3.635 4.508 5.590 6.931 8.594 10.657 13.215 16.386 20.319 25.196 31.243 26% 1.260 1.588 2.000 2.520 3.176 4.002 5.042 6.353 8.005 10.086 12.708 16.012 20.175 25.421 32.030 40.358 28% 1.280 1.638 2.097 2.684 3.436 4.398 5.629 7 206 9.223 11.806 15.112 19.343 24.759 31.691 40.565 51.923 Print Done 11:59pm incompl 06/07/20 Chapter Test 4,5,6 150min 1 of 1 EPIC @ 18 W 0 Reference al G Compound Amount of Annuity of $1.00 in Arrears (Future Value of Annuity) Periods 2%. 4% 6% 8% 10% 12% 14% 16% 18% Period 1 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 Period 2 2.020 2.040 2.060 2.080 2.100 2.120 2.140 2.160 2.180 Perlod 3 3.060 3.122 3.184 3.246 3.310 3.374 3.440 3.506 3.572 Period 4 4.122 4.246 4.375 4.506 4.641 4.779 4.921 5.066 5.215 Period 5 5.204 5.416 5.637 5.867 6.105 6.353 6.610 6.877 7.154 Period 6 6.308 6.633 6.975 7.336 7.716 8.115 8.536 8.977 9.442 Period 7 7.434 7.898 8.394 8.923 9.487 10.089 10.730 11.414 12.142 Period 8 8.583 9.214 9.897 10.637 11.436 12.300 13.233 14.240 15.327 Period 9 9.755 10.583 11.491 12.488 13.579 14.776 16.085 17.519 19.086 Period 10 10.950 12.006 13.181 14.487 15.937 17.549 19.337 21.321 23.521 Period 11 12.169 13.486 14.972 16.645 18.531 20.655 23.045 25.733 28.755 Period 12 13.412 15.026 16.870 18.977 21.384 24.133 27.271 30.850 34931 Period 13 14.680 16.627 18.882 21.495 24.523 28.029 32.089 36.78642219 Period 14 15 974 18.292 21.015 24.215 27.975 32.393 37.581 43.672 50.818 Period 15 17 293 20.024 23.276 27.152 31.772 37.280 43.842 51.660 60.965 Period 16 18 639 21.825 25.673 30.324 35.950 42.75350 900 925 72939 20% 1.000 2.200 3.640 5.368 7.442 9.930 12 916 16.499 20.799 25.959 32.150 39.581 48.497 59.196 72.035 87.442 22% 1.000 2.220 3.70B 5.524 7.740 10.442 13.740 17.762 22.670 28.657 35.962 44.874 55.746 69.010 85.192 104.935 24% 1.000 2240 3.778 5.684 8.048 10.980 14.615 19.123 24.712 31.643 40.238 50.895 64.110 80.496 100.815 126.011 26% 1.000 2.260 3.848 5.848 8.368 11.544 15.546 20.588 26.940 34.945 45.031 57.739 73.751 93.926 119.347 151377 28% 1.000 2.280 3.918 6.016 8.700 12.136 16.534 22.163 29 369 38.593 50.398 65.510 84.853 109.612 141.303 181 AGR op Print Done incomplete 11:59pm 150min 1 of 1 06/07/20 Chapter Test 4,5,6 EPIC w t GAMES 18 Question Help The Borgin Company is a national portable building manufacturer. Its Benton plant will become ide on Present Value of $1 table December 31, 2017. Mary Carter, the corporate controller, has been asked to look at the options Present ole of Annuity of $1 table regarding the plant Future Value of $1 table (Click the icon to view the options) Future of Annuity of $1 table Bergin Company treats all cash flows as if they occur at the end of the year, and uses anfor tax required Read the movements rate of return of 10%. Bergin is subject to a 30% tax rate on all income, including capital gains. Requirement 1. Calculato not present value of each of the options and determine which option Berpin should select using the NPV anterion The net present value of Option is Begin the calculation of Option 2 by determining the shor-tax cash inflow for rent. Then, determine the wher-tax cash flow for the material purchases discount. Finally, determine the after-tax cash flow on sale of the plant and the total net present value (NPV) of Option 2. (Use factors to three decimal places, XXXX, and use a minus signor parentheses for a negative nel present value Enter the represent value of the investment rounded to the nearest whole dollar) Net Cash Present Value PV factor Inflow of Cash Flows Present value of net cash flows, Option 2 After-tax cash inflows from rent: Dec 31, 2018 Dec 31, 2010 Dec 31, 2000 Choose from any list or enter any number in the input fields and then continue to the next question Save for later The Borgin Company is a national portable building manufacturer. Its Benton plant will become ide on Present Value of $1 table December 31, 2017 Mary Carter, the corporate controller, has been asked to look at three options Present Value of Annuity of $1 table regarding the plant: Future Value of $1 table (Click the icon to view the options.) Future Value of Aeruity of $1 table Read the requirements Bergin Company treats all cash flows as if they occur at the end of the year, and uses an after-tax required rate of return of 10%. Bergin is subject to a 30% tax rate on all income, including capital gains Dec 31, 2021 After-tax cash inflows from discount on purchases: Dec 31, 2018 Dec 31, 2019 Dec 31, 2020 Dec 31, 2021 Present value of after-tax cash flow from sale of plant Net present value Option 2 Begin the calculation of Option 3 by determining the other tax cash inflow from operations (excluding depreciation). Then, determine the after tax cash savings from annual depreciation deductions. Finally, determine the after-tax cash inflow on sale of the plant and the total represent value (NPV) of Option 3. (Use factors to three decimal places, XXXX, and use a minus sign or perhees for a negative present value of net cash flows. Enter the represent value of the investment rounded to the nearest whole dolar) Natach Presenta Choose from any lot or enter any number in the input fields and then continue to the next question Save for Later 3 esc A # 3 $ 4 % 5 & 7 6 8 0 O Q W R T Y U m (Click the icon to view the options.) Future Value of Annuity of $1 table Read the requirements Bergin Company treats all cash flows as if they occur at the end of the year, and uses an after tax required rate of return of 10%. Bergin is subject to a 30% tax rate on all income, including capital gains Bogin the calculation of Option 3 by determining the after-tax cash inflow from operations (excluding depreciation). Then, determine the worlax cash savings from annual depreciation deductions. Finally, determine the after-tax cash inflow on sale of the plant and the total not present value (NPV) of Option 3. (Use factors to the decimal places, XXXX, and use a minus sign or perorthoses for a negative present value of net cash flows. Enter the net present value of the investment rounded to the nearest whole dollar.) Net Cash Inflow Present Value of Cash Flows PV factor Present value of net cash flows, Option 3: Initial equipment investment After-tax cash inflows from operations (excluding depreciation) Dec 31, 2018 Dec 31, 2019 Dec 31, 2020 Dec 31, 2021 - I ARA Choose from any list or enter any number the input fields and then continue to the next question Save for Later MacBook Pro F4 A # 3 $ 4 % 5 & 7 8 0 9 6 2 0 C E T Y L J G K H D A Bergin Company treats all cash flows as if they occur at the end of the year, and uses an after-tax required rate of return of 10%. Bergin is subject to a 30% tax rate on all income, including capital gains. After-tax cash savings from annual depreciation deductions: Dec 31, 2018 Dec 31, 2019 Dec 31, 2020 Dec 31, 2021 Present value of after-tax cash flow from sale of plant Net prenent valus, Option Bergin Company should choose for the Benton plant Requirement 2. What nonfinancial factors should Bergin consider before making its choice? Choose from any list or enter any number in the input fields and then continue to the next question Save for Later MacBook Pro SO ... esc FE F3 F5 F6 * # 3 % 5 & 7 6 8 9 H Bergin Company should choose for the enton plant Requirement 2. What nonfinancial factors should Bergin consider before making its choice? For each option, select one or more nonfinancial factors that Bergin should consider (Select all that apply. If a box is not used in the table, leave the box empty) Option 1 Option 2 Option 3 Choose from any list or enter any number in the input fields and then continue to the next question Save for Later MacBook Pro 4) esc F6 # 3 $ 4 % 5 & 7 0 6 B 2 O U W 70 T Y J D F UL H Requirement 2. What nonfinancial factors should Bergin consider before making its choice? For each option, select one or more nonfinancial factors that Bergin should consider. (Select all that apply. If a box is not used in the table, leave the box empty.) Option 1 Option 2 Failure to recognize savings from depreciation Gives Bergin immediate liquidity Gives Borgin a closer relationship with the supplier Has Bergin entering a new line of business Option 3 of successful, option could be expanded to cover other accessories Limits Bergin's flexibility if the supplier's quality is not comparable to competitors Limits Bergin's liquidity due to working capital requirements Potential risks of failing to meet predicted sales Choose from any list or enter any number in the input fields and then continue to the next question Save for Later MacBook Pro 189 SC F4 F2 * A # 3 $ 4 % 5 & 7 9 8 6 2 W E R Y T Question Help rk The Ralling Company is a national portable building manufacturer. Its Benton plant Present Value of $1 table will become idle on December 31, 2017. Mary Carter, the corporate controller, has Present Value of Annuity of $1 table been asked to look at three options regarding the plant: Future Value of $1 table (Click the icon to view the options.) Future Value of Annuity of $1 table Read the requirements Ralling Company treats all cash flows as if they occur at the end of the year, and uses an after-tax required rate of return of 8%. Ralling is subject to a 40% tax rate on all income, including capital gains. Test Requirement 1. Calculate net present value of each of the options and determine which option Ralling should select using the NPV criterion The net present value of Option 1 is Begin the calculation of Option 2 by determining the after tax cash inflow for rent. Then, determine the after-tax cash inflow for the material purchases discount. Finally, determine the after-tax cash inflow on sale of the plant and the total net present value (NPV) of Option 2. (Use factors to three decimal places, X.XXX, and use a minus sign or parentheses for a negative net present value. Enter the net present value of the investment rounded to the nearest whole dollar.) Net Cash Present Value PV factor Inflow of Cash Flows Choose from any list or enter any number in the input fields and then continue to the next question Save for Later see 06/07/20 Chap 4-6 Supplement Test EC 180min 1 of See 17 EPIC GA rate of return of 8%. Ralling is subject to a 40% tax rate on all income, Net Cash Present Value Inflow PV factor of Cash Flows Present value of net cash flows, Option 2: After-tax cash inflows from rent: Dec 31, 2018 Dec 31, 2019 Dec 31, 2020 Dec 31, 2021 After-tax cash inflows from discount on purchases: Dec 31, 2018 Dec 31, 2019 Dec 31, 2020 Dec 31, 2021 TUTTE Present value of after-tax cash flow from sale of plant Choose from any list or enter any number in the input fields and then continue to the next question. Save for Later Future Value of Annuity of $1 tabl (Click the icon to view the options.) Read the requirements. Ralling Company treats all cash flows as if they occur at the end of the year, and uses an after-tax required rate of return of 8%. Ralling is subject to a 40% tax rate on all income, including capital gains. Net Cash Present Value PV factor Inflow of Cash Flows Present value of net cash flows, Option 3: Initial equipment investment After-tax cash inflows from operations (excluding depreciation); Dec 31, 2018 Dec 31, 2019 Dec 31, 2020 Dec 31, 2021 After-tax cash savings from annual depreciation deductions: Dec 31, 2018 Dec 31, 2019 Dec 31, 2020 Dec 31, 2021 Choose from any list or enter any number in the input fields and then continue to the next question. Save for Later Present Value of $1 table Present Value of Annuity of $1 table Future Value of $1 table Future Value of Annuity of $1 table The Ralling Company is a national portable building manufacturer. Its Benton plant will become idle on December 31, 2017 Mary Carter, the corporate controller, has been asked to look at three options regarding the plant: (Click the icon to view the options.) Ralling Company treats all cash flows as if they occur at the end of the year, and uses an after-tax required rate of return of 8%. Ralling is subject to a 40% tax rate on all income, including capital gains, Present value of after-tax cash flow from Read the requirements sale of plant Net present value, Option 3 Ralling Company should choose for the Benton plant. Requirement 2. What nonfinancial factors should Ralling consider before making its choice? For each option, select one or more nonfinancial factors that Rolling should consider (Select all that apply. If a box is not used in the table, leave the box empty) Option 1 Option 2 Choose from any list or enter any number in the input fields and then continue to the next question. Save for Later The Ralling Company is a national portable building manufacturer. Its Benton plant will become idlo on December 31, 2017 Mary Carter, the corporate controller, has been asked to look at three options regarding the plant (Click the icon to view the options.) Ralling Company treats all cash flows as if they occur at the end of the year, and uses an after-tax required rate of return of 8%. Ralling is subject to a 40% tax rato on al income, including capital gains. Prosent Value of $1 table Prosent Value of Annuity of $1 table Future Value of $1 table Future Value of Annuity of $1 table Read the requirements Net present value, Option 3 Ralling Company should choose for the Benton plant. Requirement 2. What nonfinancial factors should Ralling consider before making its choice? For each option, select one or more nonfinancial factors that Rolling should consider. (Select all that apply. If a box is not used in the table, leave the box empty) Option 1 Option 2 Option 3 Choose from any list or enter any number in the input fields and then continue to the next question Save for Later fact -, has More Info - the e on all me Bent Ring con rs that Option 1: The plant, which has been fully depreciated for tax purposes, can be sold immediately for $720,000, Option 2: The plant can be leased to the Timber Corporation, one of Ralling's suppliers, for 4 years. Under the lease terms, Timber would pay Ralling $174,000 rent per year (payable at year-end) and would grant Ralling a $62,000 annual discount from the normal price of lumber purchased by Ralling. (Assume that the discount is received at year-end for each of the 4 years.) Timber would bear all of the plant's ownership costs. Ralling expects to sell this plant for $300,000 at the end of the 4-year lease. Option 3: The plant could be used for 4 years to make porch swings as an accessory to be sold with a portable building. Fixed overhead costs (a cash outflow) before any equipment upgrades are estimated to be $27,000 annually for the 4-year period. The swings are expected to sell for $50 each. Variable cost per unit is expected to be $26. The following production and sales of swings are expected: 2018, 13,000 units: 2019, 18,000 units: 2020, 16,000 units: 2021.9,000 units. In order to manufacture the swings, some of the plant equipment would need to be upgraded at an immediate cost of $170,000. The equipment would be depreciated using the straight-line depreciation method and zero terminal disposal value over the 4 years it would be in use. Because of the equipment upgrades, Ralling could sell the plant for $400,000 at the end of 4 years. No change in working capital would be required pty che input field Print Done come, including capital gains. Requirements . 1. Calculate net present value of each of the options and determine which option Ralling should select using the NPV criterion. What nonfinancial factors should Ralling consider before making its choice? 2. Print Done put fields and then continue to the next question. Present Value of $1 Periods 2% 4% Period 1 0.980 0.962 Period 2 0.961 0.925 Period 3 0.942 0.889 Period 4 0.924 0.855 Period 5 0.906 0.822 Period 6 0.888 0.790 Period 7 0.871 0.760 Period 8 0.853 0.731 Period 9 0.837 0.703 Period 10 0.820 0.676 Period 11 0.804 0.650 Period 12 0.788 0.625 Period 13 0.773 0.601 Period 14 0.758 0.577 Period 15 0.743 0.555 Period 16 0.7280534 6% 0.943 0.890 0.840 0.792 0.747 0.705 0.665 0.627 0.592 0.558 0.527 0.497 0.469 0.442 0.417 0 394 8% 0.926 0.857 0.794 0.735 0.681 0.630 0.583 0.540 0.500 0.463 0.429 0.397 0.368 0.340 0.315 0.292 10% 0.909 0.826 0.751 0.683 0.621 0.564 0.513 0.467 0.424 0.386 0.350 0.319 0.290 0.263 0.239 0.218 12% 0.893 0.797 0.712 0.636 0.567 0.507 0.452 0.404 0.361 0.322 0.287 0.257 0.229 0.205 0.183 0.163 14% 0.877 0.769 0.675 0.592 0.519 0.456 0.400 0.351 0.308 0.270 0.237 0.208 0.182 0.160 0.140 0.123 16% 0.862 0.743 0.641 0.552 0.476 0.410 0.354 0.305 0.263 0.227 0.195 0.168 0.145 0.125 0.108 0.093 18% 0.847 0.718 0.609 0.516 0.437 0.370 0.314 0.266 0.225 0.191 0.162 0.137 0.116 0.099 0.084 0.071 20% 0.833 0.694 0.579 0.482 0.402 0.335 0.279 0.233 0.194 0.162 0.135 0.112 0.093 0.078 0.065 0.054 22% 0.820 0.672 0.551 0.451 0.370 0.303 0.249 0.204 0.167 0.137 0.112 0.092 0.075 0.062 0.051 0.042 24% 0.806 0.650 0.524 0.423 0.341 0.275 0.222 0.179 0.144 0.116 0.094 0.076 0.061 0.049 0.040 0.032 26% 28% 30% 0.794 0.781 0.769 0.630 0.610 0.592 0.500 0.477 0.455 0.397 0.373 0.350 0.315 0.291 0.269 0.250 0.227 0.207 0.198 0.178 0.159 0.157 0.139 0.123 0.125 0.108 0.094 0.099 0.085 0.073 0.079 0.066 0.056 0.062 0.052 0.043 0.050 0.040 0.033 0.039 0.032 0.025 0.031 0.025 0.020 0.025 0.019 0.015 VOOOOOOOOOOOOOOOO 10 Print Done incom 11:59pm 150min 1 of Present Value of Annuity of $1.00 in Arrears Periods 2% 4% 6% 8% Period 1 0.980 0.962 0.943 0.926 Period 2 1.942 1.886 1.833 1.783 Porlod 3 2.884 2.775 2.673 2.577 Period 4 3.808 3.630 3.465 3.312 Period 5 4.713 4.452 4.212 3.993 Period 6 5.601 5.242 4.917 4.623 Period 7 6.472 6.002 5.582 5.206 Period 8 7.325 6.733 6.210 5.747 Period 9 8.162 7.435 6.802 6.247 Period 10 8.983 8.111 7.360 6.710 Period 11 9.787 8.760 7.887 7.139 Period 12 10.575 9.385 8.384 7.536 Period 13 11.348 9.986 8.853 7.904 Period 14 12.106 10.563 9.295 8.244 Period 15 12.849 11.118 9.712 8.569 Period 16 13.578 11.652 10.106 8851 10% 0.909 1.736 2.487 3.170 3.791 4.355 4.868 5.335 5.759 6.145 6.495 6.814 7.103 7.367 7.606 7.824 12% 0.893 1.690 2.402 3.037 3.605 4.111 4.564 4.968 5.328 5.650 5.938 6.194 6.424 6.628 6.811 6.974 14% 0.877 1.647 2.322 2.914 3.433 3.889 4.288 4.639 4.946 5.216 5.453 5.660 5.842 6.002 6.142 6265 16% 0.862 1.605 2.246 2.798 3.274 3.685 4.039 4.344 4.607 4.833 5.029 5.197 5.342 5.468 5.575 5.668 18% 0.847 1.566 2.174 2.690 3.127 3.498 3.812 4.078 4.303 4.494 4.656 4.793 4.910 5.008 5.092 5.162 20% 0.833 1.528 2.106 2.589 2.991 3.326 3.605 3.837 4.031 4.192 4.327 4.439 4.533 4.611 4.675 4.730 22% 0.820 1,492 2.042 2.494 2.864 3.167 3.416 3.619 3.786 3.923 4.035 4.127 4.203 4.265 4.315 4.357 24% 0.806 1.457 1.981 2.404 2.745 3.020 3.242 3.421 3.566 3.682 3.776 3.851 3.912 3.962 4.001 4.033 26% 0.794 1.424 1.923 2.320 2.635 2.885 3.083 3.241 3.366 3.465 3.543 3.606 3.656 3.695 3.726 3.751 28% 0.781 1.392 1.868 2.241 2.532 2.759 2.937 3.076 3.184 3.269 3.335 3.387 3.427 3.459 3.483 3.503 30% 0.769 1.361 1.816 2.166 2.436 2.643 2.802 2.925 3.019 3.092 3.147 3.190 3.223 3249 3.268 3.283 Print Done 11:59pm incomplete 06/07/20 Chapter Test 4,5,6 150min 1 of 1 a 18 AN EPIC DW t GAMES 0 Reference Compound Amount of $1.00 (The Future Value of $1.00) Periods 2% 4% 6% 8% 10% 12% Period 1 1.020 1.040 1.060 1.080 1.100 1.120 Period 2 1.040 1.082 1.124 1.166 1.210 1.254 Period 3 1.061 1.125 1.191 1.260 1.331 1.405 Period 4 1.082 1.170 1.262 1.360 1.464 1.574 Period 5 1.104 1.217 1.338 1.469 1.611 1.762 Period 6 1.126 1.265 1.419 1.587 1.772 1.974 Period 7 1.149 1.316 1.504 1.714 1.949 2.211 Period 8 1.172 1.369 1.594 1.851 2.144 2.476 Period 9 1.195 1.423 1.689 1.999 2.358 2.773 Period 10 1.219 1.480 1.791 2.159 2.594 3.106 Period 11 1.243 1.539 1.898 2.332 2.853 3.479 Period 12 1.268 1.601 2.012 2.518 3.138 3.896 Period 13 1.294 1.665 2.133 2.720 3.452 4.363 Period 14 1.319 1.732 2.261 2.937 3.797 4.887 Period 15 1.346 1.801 2.397 3.172 4.177 5.474 Period 16 1.373 1.873 2.540 3.426 4.595 6.130 14% 1.140 1.300 1.482 1.689 1.925 2.195 2.502 2.853 3.252 3.707 4.226 4.818 5,492 6.261 7.138 A.137 16% 1.160 1.346 1.561 1.811 2.100 2.436 2.826 3.278 3.803 4.411 5.117 5.936 6.886 7.988 9.266 10.748 18% 1.180 1.392 1.643 1.939 2.288 2.700 3.185 3.759 4,435 5.234 6.176 7 288 8.599 10.147 11.974 14 129 20% 1.200 1.440 1.728 2.074 2.488 2.986 3.583 4.300 5.160 6.192 7.430 8.916 10.699 12.839 15.407 18.488 22% 1.220 1.488 1.816 2.215 2.703 3.297 4.023 4.908 5.987 7.306 8.912 10.872 13.264 16.182 19.742 24 OAR 24% 1.240 1.538 1.907 2.364 2.932 3.635 4.508 5.590 6.931 8.594 10.657 13.215 16.386 20.319 25.196 31.243 26% 1.260 1.588 2.000 2.520 3.176 4.002 5.042 6.353 8.005 10.086 12.708 16.012 20.175 25.421 32.030 40.358 28% 1.280 1.638 2.097 2.684 3.436 4.398 5.629 7 206 9.223 11.806 15.112 19.343 24.759 31.691 40.565 51.923 Print Done 11:59pm incompl 06/07/20 Chapter Test 4,5,6 150min 1 of 1 EPIC @ 18 W 0 Reference al G Compound Amount of Annuity of $1.00 in Arrears (Future Value of Annuity) Periods 2%. 4% 6% 8% 10% 12% 14% 16% 18% Period 1 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 Period 2 2.020 2.040 2.060 2.080 2.100 2.120 2.140 2.160 2.180 Perlod 3 3.060 3.122 3.184 3.246 3.310 3.374 3.440 3.506 3.572 Period 4 4.122 4.246 4.375 4.506 4.641 4.779 4.921 5.066 5.215 Period 5 5.204 5.416 5.637 5.867 6.105 6.353 6.610 6.877 7.154 Period 6 6.308 6.633 6.975 7.336 7.716 8.115 8.536 8.977 9.442 Period 7 7.434 7.898 8.394 8.923 9.487 10.089 10.730 11.414 12.142 Period 8 8.583 9.214 9.897 10.637 11.436 12.300 13.233 14.240 15.327 Period 9 9.755 10.583 11.491 12.488 13.579 14.776 16.085 17.519 19.086 Period 10 10.950 12.006 13.181 14.487 15.937 17.549 19.337 21.321 23.521 Period 11 12.169 13.486 14.972 16.645 18.531 20.655 23.045 25.733 28.755 Period 12 13.412 15.026 16.870 18.977 21.384 24.133 27.271 30.850 34931 Period 13 14.680 16.627 18.882 21.495 24.523 28.029 32.089 36.78642219 Period 14 15 974 18.292 21.015 24.215 27.975 32.393 37.581 43.672 50.818 Period 15 17 293 20.024 23.276 27.152 31.772 37.280 43.842 51.660 60.965 Period 16 18 639 21.825 25.673 30.324 35.950 42.75350 900 925 72939 20% 1.000 2.200 3.640 5.368 7.442 9.930 12 916 16.499 20.799 25.959 32.150 39.581 48.497 59.196 72.035 87.442 22% 1.000 2.220 3.70B 5.524 7.740 10.442 13.740 17.762 22.670 28.657 35.962 44.874 55.746 69.010 85.192 104.935 24% 1.000 2240 3.778 5.684 8.048 10.980 14.615 19.123 24.712 31.643 40.238 50.895 64.110 80.496 100.815 126.011 26% 1.000 2.260 3.848 5.848 8.368 11.544 15.546 20.588 26.940 34.945 45.031 57.739 73.751 93.926 119.347 151377 28% 1.000 2.280 3.918 6.016 8.700 12.136 16.534 22.163 29 369 38.593 50.398 65.510 84.853 109.612 141.303 181 AGR op Print Done incomplete 11:59pm 150min 1 of 1 06/07/20 Chapter Test 4,5,6 EPIC w t GAMES 18