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zubka84 [21]
3 years ago
6

Western Electronics (WE) is reviewing the following data relating to a new equipment proposal: Net initial investment outlay Aft

er-tax cash inflow from disposal of the asset after 5 years $10,000 Present value of an annuity of $i at 128for 5 years Present value of $1 at 128 in 5 years $50,000 3.605 0.567 WE expects the net after-tax savings in cash outflows from the investment to be equal in each of the 5 years. What is the minimum amount of after-tax annual savings oncluding depreciation effects) needed to make the investment yield a 12% return (rounded to the nearest whole dollar)?
$13,889.
$12,297
$8,189.
$11,111
$15,678
Business
1 answer:
alexira [117]3 years ago
4 0

Answer:

$12.297

Explanation:

From the given information:

The required amount for the after-tax annual savings to yield a return of 12% can be calculated as follows:

The Present value PV of future salvage value, after tax is:

= $10000 × 0.567

= $5670

From the original outlay of investment which is = $50000

The net amount to be recovered in terms of the present value = $50000 - $5670

= $44330

Finally, the required amount for the after-tax annual savings = \dfrac{\$44330}{3.605}

= $12.297

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5 0
1 year ago
Explain what is meant by "Information Technology (IT) flattens organizations?
Shalnov [3]

Answer: The answer is given below

Explanation:

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5 0
3 years ago
Varto Company has 12,600 units of its sole product in inventory that it produced last year at a cost of $31 each. This year’s mo
grandymaker [24]

Answer:

It is more profitable to sell the units as-is.

Explanation:

Giving the following information:

Number of units= 12,600

Varto has two alternatives for these items:

(1) they can be sold to a wholesaler for $13 each

(2) they can be processed further for $272,300 and then sold for $34 each.

The first cost of $31 is a sunk cost, it will remain no matter which option is chosen. We will not take it into account for the decision making process.

Option 1:

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Option 2:

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7 0
3 years ago
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5 0
3 years ago
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Paul [167]

Answer: False

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3 0
3 years ago
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