Annual Rate of Return Cash Payback Period, and Net Present Value
Not what you're looking for?
Morgan Company is considering a capital investment of $180,000 in additional productive facilities. The new machinery is exected to have a useful life of 6 years with no salvage value. Depreciation is by the straght-line method. During the life of the investment, annual net income and net annual ash flows ar expected to be $20,000ad $50,000 respctively. Morgan has a 15% cost of capital rate which is the required rate of return on the investment.
Instructions
(round to two decimals)
a. Compute (1) the cash aybak period and (2) the annual rate of return of the proposed capital expenditure.
b. Using the discounted cash flow technique, compute the net present value.
Purchase this Solution
Solution Summary
The solution determines Morgan Company's annual rate of return cash payback period, and net present value.
Purchase this Solution
Free BrainMass Quizzes
Lean your Process
This quiz will help you understand the basic concepts of Lean.
IPOs
This Quiz is compiled of questions that pertain to IPOs (Initial Public Offerings)
Managing the Older Worker
This quiz will let you know some of the basics of dealing with older workers. This is increasingly important for managers and human resource workers as many countries are facing an increase in older people in the workforce
Organizational Leadership Quiz
This quiz prepares a person to do well when it comes to studying organizational leadership in their studies.
Operations Management
This quiz tests a student's knowledge about Operations Management