Required : 1 . What is the annual accounting income ? 2 . What is the annual after tax cash flow ? 3 . What is the payback based upon the initial cash outflows ? 4 . What is the discounted payback based on the initial cash outflows ? 5 . What is the simple rate of return based upon the initial cash outflows ? 6 . What is the net present value ? 7 . What is the net present value 8 . What is the internal rate of return 9 . Would you recommend this project ? Why or why not . =================================================== ACCT 556 Week 5 Homework Assignment
Cost of new equipment $ 80,000 Increase need for Working Capital ( to be released at end of project ) $ 20,000 Length of project 6 years Salvage Value of equipment at end of project $ 8,000 Annual cash savings if equipment is purchased ( cash inflows ) $ 28,500 Tax rate 35 % Discount rate required of all investements 14 %
Required : 1 . What is the annual accounting income ? 2 . What is the annual after tax cash flow ? 3 . What is the payback based upon the initial cash outflows ? 4 . What is the discounted payback based on the initial cash outflows ? 5 . What is the simple rate of return based upon the initial cash outflows ? 6 . What is the net present value ? 7 . What is the net present value 8 . What is the internal rate of return 9 . Would you recommend this project ? Why or why not . =================================================== ACCT 556 Week 5 Homework Assignment
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ACCT 556 Week 5 Problem Cash Budget
Note : It is expected that this problem will be complete using an Excel spreadsheet using formulas . Please see the Excel Tutorial that is available under the course home tab .