Anderson Taylor Consulting plans to replace all their computers in the office, the old computers will be
Fantastic news! We've Found the answer you've been seeking!
Question:
Anderson Taylor Consulting plans to replace all their computers in the office, the old computers will be sold for market value. The cost of the combined new computers and annual software updates are expected to provide efficiency gains and increased volume of sales. Information related to this investment is as follows:
Cost new computers $
Salvage value of new computers at end of useful life
Life of new computers years
Market value of old computers Today book value
Annual software update cost all computers new and old
Annual operating cash inflow efficiency & increased sales from new computers
Minimum required rate of return
Applicable Tax rate
a calculate the NPV of the investment
b calculate the IRR for this investment
c determine simple payback period using before tax cash flow, after tax cash flow
d determine the discounted payback period suing after tax cash flow
e find the ARR
f calculate the profitability index for this investment
Related Book For
Cornerstones of Financial and Managerial Accounting
ISBN: 978-1111879044
2nd edition
Authors: Rich, Jeff Jones, Dan Heitger, Maryanne Mowen, Don Hansen
Posted Date: