Examlex
Pique Corporation wants to purchase a new machine for $300,000. Management predicts that the machine can produce sales of $200,000 each year for the next 5 years. Expenses are expected to include direct materials, direct labor, and factory overhead (excluding depreciation) totaling $80,000 per year. The firm uses straight-line depreciation with no residual value for all depreciable assets. Pique's combined income tax rate is 40%. Management requires a minimum after-tax rate of return of 10% on all investments.
What is the net present value (NPV) of the investment, rounded to the nearest whole dollar? (The PV annuity factor for 5 years, 10% is 3.791.) Assume that the cash inflows occur at year-end.
Audience Size
The number of individuals reached or engaged by a communication effort, presentation, or performance.
Geography Location
The specific place or position of something on the earth's surface as determined by its latitude and longitude.
A method of exchanging digital messages across the internet or other computer networks.
Specific Purpose
A precise intent or goal behind an action, document, or speech, aimed at achieving a particular outcome.
Q12: Relevant costs in a make-vs.-buy decision of
Q34: If the plugs are purchased and the
Q39: Maintaining a constant production level in a
Q77: The estimated net present value (NPV) of
Q96: Assume that cash inflows occur evenly throughout
Q99: The Bambola Doll Company produces a single
Q100: What was the actual purchase price (AP)
Q117: Employee morale and social responsibility represent two
Q127: What is the fixed factory overhead spending
Q141: The accounting (book) rate of return based