Factor Company is planning to add a new product to its line. To manufacture this product,...
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Factor Company is planning to add a new product to its line. To manufacture this product, the company needs to buy a new $480,000 cost with an expected four-year life and a $20,000 salvage value. Additional annual information for this new produc follows. Sales of new product Expenses Materials, labor, and overhead (except depreciation) Depreciation Machinery Selling, general, and administrative expenses $1,840,000 1,488,000 115,000 183,100 Required 1. Determine income and net cash flow for each year of this machine's life. 2. Compute this machine's payback period, assuming that cash flows occur evenly throughout each year. 3. Compute net present value for this machine using a discount rate of 7%. Factor Company is planning to add a new product to its line. To manufacture this product, the company needs to buy a new $480,000 cost with an expected four-year life and a $20,000 salvage value. Additional annual information for this new produc follows. Sales of new product Expenses Materials, labor, and overhead (except depreciation) Depreciation Machinery Selling, general, and administrative expenses $1,840,000 1,488,000 115,000 183,100 Required 1. Determine income and net cash flow for each year of this machine's life. 2. Compute this machine's payback period, assuming that cash flows occur evenly throughout each year. 3. Compute net present value for this machine using a discount rate of 7%.
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Lets calculate the income and net cash flow for each year of the machines life 1 Income and Net Cash ... View the full answer
Related Book For
Fundamental accounting principle
ISBN: 978-0078025587
21st edition
Authors: John J. Wild, Ken W. Shaw, Barbara Chiappetta
Posted Date:
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