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Komok [63]
3 years ago
14

Hawkins Poultry Farms is considering the purchase of feeding equipment that costs $139,000 and will produce annual cash flows of

approximately $36,000 for five years. The equipment is expected to be sold at the end of five years for $40,000. What is the net present value of the proposed investment
Business
1 answer:
pychu [463]3 years ago
7 0

Answer:

NPV = $1,564.65

Explanation:

Here is the full question :

Hawkins Poultry Farms is considering the purchase of feeding equipment that costs $139,000 and will produce annual cash flows of approximately $36,000 for five years. The equipment is expected to be sold at the end of five years for $40,000.

What is the net present value of the proposed investment? Hawkins requires a 15 percent return on all capital investments

Net present value is the present value of after tax cash flows from an investment less the amount invested.  

NPV can be calculated using a financial calculator  

Cash flow in year 0 = $-139,000

Cash flow each year from year 1 to 4 = $36,000

Cash flow in year 5 = $36,000 + $40,000 = $76,000.

i = 15%

NPV = $1,564.65

To find the NPV using a financial calculator:

1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.

2. after inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.  

3. Press compute  

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3 years ago
Selected financial data regarding current assets and current liabilities for ACME Corporation and Wayne Enterprises, are as foll
gavmur [86]

Answer:

1-a. ACME corporation is 1.26

Wayne corporation is 1.09

1-b. ACME corporation

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                                     ACME ($ in millions)               Wayne ($ in millions)

Total current assets          $ 12,987                                 $ 8,258

Total current liabilities      $ 10,301                                  $ 7,545

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5 0
3 years ago
Classify each of the following costs as a direct cost or an indirect​ cost, assuming that the cost object is the Juniors Departm
Damm [24]

Answer:

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Explanation:

Indirect costs cannot be directly traced to a cost object, while direct costs can be directly traced. Usually direct costs tend to vary depending on total output, while indirect costs tend to be fixed.

3 0
3 years ago
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