Salsa Company is considering an investment in technology to improve its operations. The investment costs $240,000...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Salsa Company is considering an investment in technology to improve its operations. The investment costs $240,000 and will yield the following net cash flows. Management requires a 10% return on investments. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.) Net cash Flow Year 1 $ 47,900 2 53,800 3 75,100 4 94,800 5 125,600 Required: 1. Determine the payback period for this investment. 2. Determine the break-even time for this investment. 3. Determine the net present value for this investment. 4. Should management invest in this project based on net present value? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Determine the payback period for this investment. (Enter cash outflows with a minus sign. Round your Payback Period answer to 1 decimal place.) Cumulative Net Cash Year Net Cash Flows Flows Initial investment $ (240,000) Year 1 47,900 Year 2 53,800 Year 3 75,100 Year 4 94,800 Year 5 125,600 Payback period = < Required 1 Required 2 Required 1 Required 2 Required 3 Required 4 Determine the break-even time for this investment. (Enter cash outflows with a minus sign. Round your break-even time answer to 1 decimal place.) Present Value of Present Value of Net Year Net Cash Flows 1 at 10% Cash Flows per Year Cumulative Present Value of Net Cash Flows Initial investment $ (240,000) Year 1 Year 2 Year 3 Year 4 Year 5 Break-even time = years < Required 1 Required 3 > 0 0 0 Determine the net present value for this investment. Net present value Required 1 Required 2 Required 3 Required 4 Should management invest in this project based on net present value? Should management invest in this project based on net present value? < Required 3 Invest in the project as it has a positive net present value. Don't invest in the project as it has a negative net present value. Salsa Company is considering an investment in technology to improve its operations. The investment costs $240,000 and will yield the following net cash flows. Management requires a 10% return on investments. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.) Net cash Flow Year 1 $ 47,900 2 53,800 3 75,100 4 94,800 5 125,600 Required: 1. Determine the payback period for this investment. 2. Determine the break-even time for this investment. 3. Determine the net present value for this investment. 4. Should management invest in this project based on net present value? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Determine the payback period for this investment. (Enter cash outflows with a minus sign. Round your Payback Period answer to 1 decimal place.) Cumulative Net Cash Year Net Cash Flows Flows Initial investment $ (240,000) Year 1 47,900 Year 2 53,800 Year 3 75,100 Year 4 94,800 Year 5 125,600 Payback period = < Required 1 Required 2 Required 1 Required 2 Required 3 Required 4 Determine the break-even time for this investment. (Enter cash outflows with a minus sign. Round your break-even time answer to 1 decimal place.) Present Value of Present Value of Net Year Net Cash Flows 1 at 10% Cash Flows per Year Cumulative Present Value of Net Cash Flows Initial investment $ (240,000) Year 1 Year 2 Year 3 Year 4 Year 5 Break-even time = years < Required 1 Required 3 > 0 0 0 Determine the net present value for this investment. Net present value Required 1 Required 2 Required 3 Required 4 Should management invest in this project based on net present value? Should management invest in this project based on net present value? < Required 3 Invest in the project as it has a positive net present value. Don't invest in the project as it has a negative net present value.
Expert Answer:
Posted Date:
Students also viewed these accounting questions
-
The Quality Athletics Company produces a wide variety of sports equipment. Its newest division, Golf Technology, manufactures and sells a single product AccuDriver, a golf club that uses global...
-
1. Does the court have the right to do that, when neither partner has asked for a dissolution? 2. So what is the moral of the story?
-
Solve each inequality. Express your solution in interval notation. (a) 1.99 < 1/ x < 2.01 (b) 2.99 < 1/x + 2 < 3.01
-
Discuss the validity of the give, get, or get off statement.
-
Hoi Chong Transport, Ltd; operates a fleet of delivery trucks in Singapore. The company has determined that if a truck is driven 105,000 kilometers during a year, the average operating cost is 11.4...
-
Luke Company has three divisions: Peak, View, and Grand. The company has a hurdle rate of 6.51 percent. Selected operating data for the three divisions follow: Peak Sales revenue Cost of goods sold $...
-
Alanco, Incorporated manufactures a variety of products and is currently manufacturing all of its own component parts. An outside supplier has offered to sell one of those components to Alanco. The...
-
The controller of Rather Production has collected the following monthly expense data for analyzing the cost behavior of electricity costs. Total Electricity Costs Total Machine Hours January $2,500...
-
KneeFix is a medical device manufactured by KneeKing Pty Ltd. KneeFix was designed to be inserted into the knee joint during knee replacement surgery. KneeFix was sold and used in Australia for a...
-
A break-even analysis is used to determine the break-even quantity of a firm's output by examining the relationships among the firm's cost structure, volume of output, and profit. Break-even quantity...
-
Determine whether the following pairs are equivalent by constructing truth tables: [bc abd + ab'd] and [bc + ad] [abc'd] and [((a'+b') (cd'))']
-
You work for an electronics manufacturing company located in the United States. Your company plans to sell mobile phones to a distributor in Argentina, and you have drafted a distribution contract. A...
-
Qn 1. Consider the poset category A = (A,) whose objects are all elements of the set A, and a typical arrow is b Describe, with reasons, the identity arrow, compositions and [15] a if and only if a ...
-
Tell whether the angles or sides are corresponding angles, corresponding sides, or neither. AC and JK
-
Alleghany Technologies Incorporated disclosed in its annual report that: Discuss why a liquidation of LIFO inventory quantities would reduce a companys cost of goods sold. Does this event indicate...
-
The Financial Times reported that Delphi, Inc., a manufacturer of automotive parts, would take a \($100\) million write-down of its inventory to reflect reduced demand for some of its products. The...
-
The following information was disclosed in the 2015 annual report of The Arcadia Company. Fill in the missing values. Beginning inventory. Purchase of inventory.. Inventory available for sale. Ending...
Study smarter with the SolutionInn App