Required information Use the following information for the Quick Study below. [The following information applies to the questions displayed below.) Peng Company is considering an investment expected to generate an average net income after taxes of $2,300 for three years. The investment costs $48,900 and has an estimated $11,100 salvage value. QS 24-7 Computation of accounting rate of return LO P2 Compute the accounting rate of return for this investment assume the company uses straight-line depreciation Answer is complete and correct. Accounting Rate of Return Choose Denominator: Accounting Rate of Return Annual average Investment Accounting rate of retum $ 30.000 7.67 Chooto Numerator Annual after tax not income 2.300 Use the following information for the Quick Study below. {The following information applies to the questions displayed below.) Peng Company is considering an investment expected to generate an average net income after taxes of $2,300 for three years. The investment costs $48,900 and has an estimated $11,100 salvage value. QS 24-8 Net present value LO P3 Assume Peng requires a 15% return on its investments. Compute the net present value of this investment. Assume the company uses straight-line depreciation. (PV of S1, FV of $1. PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided. Negative amounts should be indicated by a minus sign. Round your present value factor to 4 decimals.) Select Chart Amount PV Factor Cash Flow Annual cash flow Residual value Prosent Value S 0 0 Not present value Beyer Company is considering the purchase of an asset for $230,000. It is expected to produce the following net cash flows. The cash flows occur evenly within each year. Assume that Beyer requires a 15% return on its investments. (PV of $1. Ev of $1. PVA of $1, and FVA of $1 (Use appropriate factor(s) from the tables provided.) Year 1 Year 2 Year 3 Year 4 Year 5 Totat Net cash flows $80,000 $53,000 $80,000 $154,000 $55,000 $422,000 a. Compute the net present value of this investment b. Should Beyer accept the investment? Complete this question by entering your answers in the tabs below. Required A Required B Compute the net present value of this investment. (Round your answers to the nearest whole, dollar) Year Net Cash Flows Present Value of 1 at 15% Present Value of Net Cash Flows 1 2 3 4 5 Totais Amount invested Net present value Exercise 24-2 Net present value LO P3 Beyer Company is considering the purchase of an asset for $230,000. It is expected to produce the following net cash flows. The cash flows occur evenly within each year. Assume that Beyer requires a 15% return on its investments. (PV of $1. FV of $1. PVA of $1. and FVA of $1 (Use appropriate factor(s) from the tables provided.) Year 1 'Year 2 Year 3 Year 4 Year 5 Total Net cash flows $80,000 $53,000 $80,000 $154,000 $55,000 $422,000 a. Compute the net present value of this investment. b. Should Beyer accept the investment? Complete this question by entering your answers in the tabs below. Required A Required B Should Beyer accept the investment? Should Beyer accept the investment?
