ACCT 556 RANK Learn by Doing/acct556rank.com ACCT 556 RANK Learn by Doing/acct556rank.com | Page 5

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.
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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.
The Hale Company is currently working on its cash budget for the
coming year. The following information is available:
Projected sales for the coming year:
The collection history of the Hale Company has been as follows:
20% of sales are collected in the month of the sale.
60% of the sales are collected in the month following the sale.