Question: BASIC EVALUATION METHOD: The following data are given for the Alright Aluminum Company: Initial cost of proposed equipment Php85,000 Estimated useful life 7 years Estimated

BASIC EVALUATION METHOD: The following data are given for the Alright Aluminum Company:

Initial cost of proposed equipment Php85,000

Estimated useful life 7 years

Estimated annual savings in cash Php18,000

operating expenses

Predicted residual value at the end of the Php3,000

useful life

Cost of Capital 10%

Compute the:

a)Payback period

b)Present value of estimated annual savings

c)Present value of estimated residual value

d)Total present value of estimated cash inflows

e)NPV

f) IRR

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!

Q:

A glass tube is attached to a water pipe, as shown in Fig. P1107. If the water pressure at the bottom of the tube is 107 kPa and the local atmospheric pressure is 99 kPa, determine how high the water...

Q:

The following data are given for Al Good Silver Company: Initial cost of proposed equipment $75,000 Estimated useful life 7 years Estimated annual savings in cash operating expenses $18,000 Predicted...

Q:

The following data are given for the Alright Aluminum Company: Initial cost of proposed equipment: Estimated useful Life: Estimated annual savings in cash operating expenses: Predicted residual value...

Q:

The following data are given for the XYZ Company Ltd.: Initial cost of proposed equipment K75,000 Estimated useful life 6 years Estimated annual savings in cash operating expenses K18,000 Predicted...

Q:

2 1 Encino Aluminium Company Year Cash Flow Cost of Capital 12% 3 0 $ (75,000) 4 1 $ 18,000 5 2 $ 18,000 6 3 $ 18,000 7 4 $ 18,000 8 5 $ 18,000 6 $ 18,000 10 7 $ 18,000 $ 3,000 12 13 11 Question 4 1...

Q:

Compute the payback period in years: Compute the present value of the estimated annual profit: Compute the present value of the estimated residual value: Compute the total present value of estimated...

Q:

The following data are given for Encino Aluminium Company: Initial cost of proposed equipment $75,000 Estimated useful life 7 years Estimated annual profit $18,000 Predicted residual value at the end...

Q:

Taking on a responsibility you know can be better completed by someone else would violate the ethical conduct standard of: competency. confidentiality. credibility. integrity. Question 2 Which term...

Q:

QUESTION ONE (a) i. What do you understand by the term "Engineering Economics"? ii. describe what you understand by "Time Value of Money (b) A N 2.5 million loan was originally made 8% simple...

Q:

QUESTION ONE (a) i. What do you understand by the term "Engineering Economics"? ii. describe what you understand by "Time Value of Money (b) A N 2.5 million loan was originally made 8% simple...

Q:

The following data are given for the Alright Company: Initial Cash Cost of Investment Estimated Annual Cash Savings Predicted Residual Value at End of Life Estimated Useful Life $ 7 5 , 0 0 0 1 8 , 0...

Q:

An ice cream shop has the following sales data: Day Actual Sales (in lbs) 1 137.1 2 123.6 3 134.9 4 160.0 140.4 5 10 Q2a). Forecast the pounds of ice cream that the shop will sell in Day 6 using a...

Q:

John Ltd enters into a non-cancellable 5 year lease agreement with Dawn Ltd on 1 July 2018. The economic life of the asset is assumed to be 5 years and the truck is assumed to have no residual value....

Q:

The YTM on a bond is the interest rabe you cam on yout invoratene if inserest tates dont change. If you actualy sell the bond before it maneres, your realzed return is known is the holding penody...

Q:

Hypothesis Testing of a Single Mean LCTCS Tuition: Louisiana Community And Technical College System consist of 2 community colleges across the state. I think RPCC's tuition and fees is lower than the...

Q:

5. How successful is Orbitzs mobile strategy? Explain your answer. When it comes to mobile apps and gauging their impact on consumers and business, the online travel industry and its airline and...

Q:

10-11 Explore the Web sites of the following companies: Eurosparkle, Promod, Kingfisher plc, and ebookers. com. Determine which of these Web sites would benefit most from adding a company-sponsored...

Q:

10-13 This project will help develop your Internet skills in commercial services for hosting an e-commerce site for a small start-up company. You would like to set up a Web site to sell towels,...