Reference: Survey of Accounting 6th edition Book

These are practice study questions

VestCo expects to collect $57,000 3 years from today. Assuming an 6% required rate of return the present value of the $57,000 future collection is {Use the PV of $1 table] [Round your answer to the nearest whole dollar.) Multiple Choice O $510 00. O $518 58. O $47,858. The Wellington family has an offer to sell a plot of land to Land Developers, Inc. [LDI] for $1,190,000. However, to allow LDI time to generate the required payment from its operations, the Wellingtons must agree to delay collection ofthe money fora 3 year period. The Wellingtons have an atternative offer to sell the land to Sunshine Properties. Sunshine has the cash available to make an immediate cash payment for the property. Assuming a 12% required rate of return, at what price would Sunshine be required pay to in order to match LDl's offer? {Use the PV of $1 table} John Lang was injured in a car accident. As the result of his injuries Mr. Lang won a legal case that allows him to collect $12,000 cash per year for four years. In orderto pay his medical bills, Mr. Lang needs his money now. Assuming an ordinary annuity and a 7% required rate of return, which of the following represents the amount of cash a nancing company would be willing to pay today to buy the annuity owed to Mr. Lang? [Use the PVA of $_1table] {Round your answer to the nearest whole dollar.} Mendez Gaming Company has an opportunity to purchase a pinball machine. The machine is expected to produce a net cash inflow.r of $2,400 per year for 4 years and to have a $2,000 salvage value at the end of the machine's useful life. Assuming an ordinary annuity and a 4% required rate of returnv the present value of the machine is {Use the PV of $_1 and PVA of $1 tables} {Round intermediate and nal answer to the nearest whole dollar.) Cullman Transport Company is considering investing in a truck that is expected to generate cash inows of $38,000 per year. The purchase price of the truck is $162,000. The expected life of the truck is 4 years and it has a salvage value of $44,000. Cullman has a required rate of return of 5 percent. Based on this information the net present value of this investment opportunity is {Use the PV of $_1 and PVA of$_1tab|es] [Round intermediate and nal answer to the nearest whole dollar.) Which of the following is a cash inflow from an investment? Multiple Choice O The purchase price of an investment. O An increase in operating expenses. O A cost savings. O All of the answers are cash outflows.Glaze Manufacturing Company {GMC} is considering an opportunity to invest in a new piece of equipment. The equipment costs $55,000 with $35,000 due on the date of purchase and the remaining $20,000 due at the end of year three. The equipment is expected to have a 4 year useful life. GMC's accountant has developed the following cash flow information regarding the equipment. Purchase price of the equipment due up front $35,888 Remaining balance due at end of year 2 $28,888 Additional working capital required immediately upon purchase 5,588 Salvage value 12,588 Incremental income per year 1?,588 Working capital recovery at end of useful life $ 5,588 Assuming a required {desired} rate of return of 8%, the net present value of this investment opportunity is [Use the PV of $_1 and PVA of $_1 tables} {Round intermediate and final answer to the nearest whole dollar.)