{ "key_pair_value_system": true, "answer_rating_count": "", "question_feedback_html": { "html_star": "", "html_star_feedback": "" }, "answer_average_rating_value": "", "answer_date_js": "2024-06-28T09:35:50-04:00", "answer_date": "2024-06-28 09:35:50", "is_docs_available": null, "is_excel_available": null, "is_pdf_available": null, "count_file_available": 0, "main_page": "student_question_view", "question_id": "4284656", "url": "\/study-help\/questions\/spanish-peaks-railroad-inc-is-considering-acquiring-equipment-at-a-4284656", "question_creation_date_js": "2024-06-28T09:35:50-04:00", "question_creation_date": "Jun 28, 2024 09:35 AM", "meta_title": "[Solved] Spanish Peaks Railroad Inc. is considerin | SolutionInn", "meta_description": "Answer of - Spanish Peaks Railroad Inc. is considering acquiring equipment at a cost of $400,000. The equipment has an estimated l | SolutionInn", "meta_keywords": "spanish,peaks,railroad,inc,acquiring,equipment,cost,$400,000,estimated,life,10,years", "question_title_h1": "Spanish Peaks Railroad Inc. is considering acquiring equipment at a cost of $400,000. The equipment has an estimated life of 10 years and no residual", "question_title": "Spanish Peaks Railroad Inc. is considering acquiring equipment at a cost of", "question_title_for_js_snippet": "Spanish Peaks Railroad Inc is considering acquiring equipment at a cost of $400,000 The equipment has an estimated life of 10 years and no residual value It is expected to provide yearly net cash flows of $50,000 The company's minimum desired rate of return for net present value analysis is 10 Present Value of an Annuity of $1 at Compound Interest Year 6 10 12 15 20 1 0 943 0 909 0 893 0 870 0 833 2 1 833 1 736 1 690 1 626 1 528 3 2 673 2 487 2 402 2 283 2 106 4 3 465 3 170 3 037 2 855 2 589 5 4 212 3 791 3 605 3 353 2 991 6 4 917 4 355 4 111 3 785 3 326 7 5 582 4 868 4 564 4 160 3 605 8 6 210 5 335 4 968 4 487 3 837 9 6 802 5 759 5 328 4 772 4 031 10 7 360 6 145 5 650 5 019 4 192 Compute the following a The average rate of return, giving effect to straight line depreciation on the investment If required, round your answer to one decimal place 10 X b The cash payback period 8 years c The net present value Use the above table of the present value of an annuity of $1 Round to the nearest dollar If required, use a minus sign to indicate negative net present value for current grading purpose Present value of annual net cash flows x Amount to be invested Net present value $ $ x x", "question_description": "

Spanish Peaks Railroad Inc. is considering acquiring equipment at a cost of $400,000. The equipment has an estimated life of 10 years and no residual value. It is expected to provide yearly net cash flows of $50,000. The company's minimum desired rate of return for net present value analysis is 10%. Present Value of an Annuity of $1 at Compound Interest Year 6% 10% 12% 15% 20% 1 0.943 0.909 0.893 0.870 0.833 2 1.833 1.736 1.690 1.626 1.528 3 2.673 2.487 2.402 2.283 2.106 4 3.465 3.170 3.037 2.855 2.589 5 4.212 3.791 3.605 3.353 2.991 6 4.917 4.355 4.111 3.785 3.326 7 5.582 4.868 4.564 4.160 3.605 8 6.210 5.335 4.968 4.487 3.837 9 6.802 5.759 5.328 4.772 4.031 10 7.360 6.145 5.650 5.019 4.192 Compute the following: a. The average rate of return, giving effect to straight-line depreciation on the investment. If required, round your answer to one decimal place. 10 X % b. The cash payback period. 8 years c. The net present value. Use the above table of the present value of an annuity of $1. Round to the nearest dollar. If required, use a minus sign to indicate negative net present value for current grading purpose. Present value of annual net cash flows x Amount to be invested Net present value $ $ x x\"image<\/p>", "transcribed_text": "", "related_book": { "title": "Core Macroeconomics", "isbn": "978-1429278478, 1429278471, 978-1429278492, 1429278498, 1464191433, 978-1464191435", "edition": "3rd edition", "authors": "Eric Chiang", "cover_image": "https:\/\/dsd5zvtm8ll6.cloudfront.net\/si.question.images\/book_images\/648.jpg", "uri": "\/textbooks\/core-macroeconomics-3rd-edition-648", "see_more_uri": "" }, "free_related_book": { "isbn": "032124544X", "uri": "\/textbooks\/vpns-illustrated-tunnels-vpns-and-ipsec-tunnels-vpns-and-ipsec-1st-edition-978-0321245441-308404", "name": "Vpns Illustrated Tunnels Vpns And Ipsec Tunnels Vpns And Ipsec", "edition": "1st Edition" }, "question_posted": "2024-06-28 09:35:50", "see_more_questions_link": "\/study-help\/questions\/business-marketing-2022-June-08", "step_by_step_answer": "The Answer is in the image, click to view ...", "students_also_viewed": [ { "url": "\/in-february-2014-storage-company-worked-on-five-job-orders", "description": "In February 2014, Storage Company worked on five job orders for specialty cedar storage cabinets. 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