Answered step by step
Verified Expert Solution
Link Copied!

Question

00
1 Approved Answer

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

image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
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 $580,000 cost with an expected four-year life and a $30.000 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 factors from the tables provided Round PV factor value to 4 decimal places 52, e9e, eee Expected Bee of the product Expect costs or be product Direct Materials Direct labor Overhead (excluding straight line depreciation on new sachine) Selling and administrative expenses The thes 490,000 682,000 436,000 170,000 3ex 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 pa ack period, assuming that cash flows occur evenly throughout each year 4. Compute this machine's accounting rate of return, assuming that Income is earned evenly throughout each year, 5. Comoute the net present value for this machine using a discount rate of 4% and assuming that cash flows occur at each year-end. The Salvage value is a cash inflow at the end of the asset's life Complete this question by entering your answers in the tabs below. tudi Quind Required Reeds Computs straight line depreciation for each year of the new machine life Bergh RINN Home Salvage value is a cash inflow at the end of the asset's life.) Complete this question by entering your answers in the tibs below. Required Required 2 Required Required 4 Required 5 Determine expected net income and net cash flow for each year of this machine's life. Expected Net Income Revenues Expenses + Expected Net Cash Flow Requin Required 3 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. Compute this machine's accounting rate of return, assuming that income is earned evenly throughout each year. 5. Compute the net present value for this machine using a discount rate of 4% 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.) Complete this question by entering your answers in the tabs below. Required Required Required 3 Required 4 Required s Compute this machine's payback penod, assuming that cash flows occur evenly throughout each year. Payback Period Choose Numerator Choose Denominator Payback Period Payback period 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 Itfe. 3. Compute this machine's payback period, assuming that cash flows occur evenly throughout each year. 4. Compute this machine's accounting rate of return, assuming that income is eamed evenly throughout each year 5. Compute the net present value for this machine using a discount rate of 4% 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.) Complete this question by entering your answers in the tabs below. Required Required 2 Required a Required 4 Requids Compute this machine's accounting rate of return, assuming that income is eamed evenly throughout each year. Accounting Rate of Retum Choose Denominator Choose Numerator Accounting Rate of Return Accounting rate of return Lid come med every roughout each year 5. Compute the net present value for this machine using a discount rate of 4% and assuming that cash flows occur at each year-end. ( Salvage value is a cash inflow at the end of the asset's life) Complete this quesbon by entering your answers in the tabs below. Required Required Required 3 Required 4 Required 5 Compute the net present value for this machine using a discount rate of 4% 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.) Chat Valter Based on n Set Chart Amount PV Factor Present Value Cash Flow Annual cash flow Resdual valve Net present value Required

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Income Tax Fundamentals 2013

Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill

31st Edition

9781285586618

Students also viewed these Accounting questions