Share
Explore BrainMass

Payback Period and Discounted Payback Period

Total period costs

ABC co obtained the following from its absorption costing accounting records: Operating income - $8,000 Total product costs incurred during the period - $12,000 Value of beginning WIP and FGI - $0 Value of ending WIP and FGI - $0 Sales - $25,000 Calculate total period costs incurred during this period. My answer w

ABC Corporation's Project: The Project's Simple, Regular Payback

The ABC Corporation is considering a project which has an up-front cost paid today at t = 0. The project will generate positive cash flows of $70,000 a year at the end of each of the next five years. The project's NPV is $90,000 and the company's WACC is 12 percent. What is the project's simple, regular payback?

Calculate - average collection period, inventory turnover

ABC Fitness 000's Income Statement Dec-05 Sales 2004.016 Cost of Goods Sold 1446.733 Gross Profit 557.283 Selling and Ad Expenses 361.402 Depreciation 56.87 Operating Income (EBIT) 139.011 Interest expense 34.482 Other Expense 14.124 EBT 90.405 Taxes 24.701 Net Income 65.704 Balance Sheet Assets Cash 25.32 Ne

Payback Decision Rule

An Electronics firm has a required payback period of 3 years for all of its projects. Currently the firm is analyzing two independent projects. Project A has an expected payback period of 2.8 yrs and a net present value of $6,900. Project B has and expected payback period of 3.1 years with a net present value of $28,400. Whic

Break-Even Analysis, Payback Period for new product in two scales of operation

2. The management of a firm wants to introduce a new product. The product will sell for $4 a unit and can be produced by either of two scales of operation. In the first, total costs are TC=$3000 +$2.8Q. In the second scale of operation, total costs are TC=$5000 +$2.4Q a. What is the break-even level of output for ea

Payback period

Payback period The Bingo Corporation is considering a project which has an up-front cost paid today at t = 0. The project will generate positive cash flows of $85,000 a year at the end of each of the next five years. The project's NPV is $100,000 and the company's WACC is 10 percent. What is the project's simple, regular paybac

What is the project's discounted payback?

15. Fernando Designs is considering a project that has the following cash flow and WACC data. What is the project's discounted payback? WACC: 10.00% Year 0 1 2 3 Cash flows -$700 $500 $500 $500 1.26 years 1.47 years 1.59 years 1.86 years 1.39 years

What is the Project's Discounted Payback?

9. Fernando Designs is considering a project that has the following cash flow and WACC data. What is the project's discounted payback? WACC: 10.00% Year 0 1 2 3 Cash flows -$950 $500 $500 $500.

What is the project's payback?

4. Stern Associates is considering a project that has the following cash flow data. What is the project's payback? Year 0 1 2 3 4 5 Cash flows -$950 $300 $310 $320 $330 $340 3.06 years 3.24 years 2.97 years 3.70 years 3.49 years

Blue Ridge Furniture: Ratio and analysis to determine which equipment to purchase

Blue Ridge Furniture is considering the purchase of two different items of equipment as described below: 1. Machine A would permit Blue Ridge to compress sawdust into various shelving products. At present, the sawdust is disposed of as a waste product.The following info is available about the machine: a) The machine would

Find the Discounted Pay back Periods using Excel

Can you help me get started with this assignment? ---------------------- Find the Discounted Pay back Periods using Excel: Project A: -$283,000; $46,000; $89,000; $104,000; $123,000; $187,000; $72,000 Project B: -$318,000; $72,000; $213,000; $131,000; $112,000; $92,000; $64,000 (The interest rate =10%, and the cost

Define the Art term Period Eye and apply it to the Ford Pinto Case

There is a term in art known as the period eye, referring to how an image is viewed during and after the time in which it was created. Examine the dilemma with a period eye. Is the solution you formulated the same today as it would have been in 1971, when this case took place? Support your argument. Ford Pinto Case would be a

Calculating Hoding Period Return

The shares of Nike, Inc., traded at $55 per share at the beginning of fiscal year 2008 and closed at $67 per share at the end of the year. Nike paid a dividend of 87.5 cents per share during the year. What was the return to holding Nike's shares during 2008.

Payback Method: Determining Acceptance or Rejection

Assume a $40,000 investment and the following cash flows for two alternatives. Year Investment X Investment Y 1 $ 6,000 $15,000 2 8,000 20,000 3 9,000 10,000 4 17,000 5 20,000 Which of the alternatives would you select under the payback method? Why?

Bingo Corporation

Payback period The Bingo Corporation is considering a project which has an up-front cost paid today at t = 0. The project will generate positive cash flows of $85,000 a year at the end of each of the next five years. The project's NPV is $100,000 and the company's WACC is 10 percent. What is the project's simple, regular paybac

Payback Period for Sewart Associates

10. (TCO B, F) Sewart Associates is considering a project that has the following cash flow data. What is the project's payback? Year Cash flow 0 ($1,000) 1 $300 2 $310 3

Payback Period Profitability Ratio

Which of the following is not a profitability ratio? a. revenues minus expenses divided by net assets b. operating revenue divided by revenue less expenses c. total increase in net assets divided by total revenue d. return on assets Answer: C Project A costs $10,000 and returns $3,000 a year f

The length of a payback period

A company with $2,000,000 in operating assets is considering purchasing a machine that costs $300,000 and which is expected to reduce operating costs by $60,000 each year. The payback period for this machine in years is closest to ______?

Breakeven Period (In Months)

Please help provide step by step calculations for each of these problems. 2. A new MRI machine costs $15,000 and is expected to generate $4,000 in profit each year for the next 6 years. 2a. What is the breakeven period (in months)? A new electronic medical records system

Payback Period with Uneven Cash Flows

A particular project requires an in initial investment of $10,000 and is expected to generate future cash flows of $4,000 for Year 1, and $3,000 for years 2 through 5. Calculate the project's payback period in years.

The Time Period Principle and Order of Statements

1. Discuss/explain the importance of periodic reporting and the time period principle. 2. What is the usual order in which financial statements are prepared from the adjusted trial balance? Why are they prepared in that order?

Simple Rate of Return and Payback

Misty pizza wants to purchase a large oven and equipment for mixing bread. Both will cost $120,000 to deliver and install. The company plan to use it for 15 years, with a scrap value of 10%. Add info: 1. The purchase of the oven and equipment is estimated to bake and sell 72,000 loaves of bread each year. The bread sells for

Payback Period and Average Rate of Return for Midnight Corp.

The management of midnight Corp. is considering the purchase of a new machine costing $1,015,000. In addition to the forgoing information use the following data in determining the acceptability of this situation: Year Income from Operations Net cash flow 1 $25,000 $150,000 2

The Bingo Corporation: Payback Period

The Bingo Corporation is considering a project which has an up-front cost paid today at t=0. The project will generate positive cash flows of $85,000 a year at the end of each of the next five years. The project's NPV is $100,000 and the company's WACC is 10 percent . What is the project's simple, regular payback?

S&P, Wal-Mart, and Target: Holding Period Returns

a. Use the price data from the table that follows for the Standard & Poor's 500 Index, Wal-Mart, and Target to calculate the holding period returns for the 24 month from December 2002 through November 2004. Month and Year S&P 500 Wal-Mart Target 2002 November $928.62 $53.90 34.78 December 876.99 50.51 30.00

Payback period

Jordan Enterprises is considering a capital expenditure that requires an initial investment of $42,000 and returns after-tax cash inflows of $7,000 per year for 10 years. The firm has a maximum acceptable payback period of 8 years. a) Determine the payback period for this project b) Should the company accept the project? Why

Investment Proposals of Madison Manufacturing

Madison Manufacturing Company is considering the following investment proposal: Initial investment: Depreciable assets (straight-line) $30,000 Working capital 4,000 Operations (per year for 4 years): Cash receipts $20,000 Cash expenditures 11,000 Disinvestment: Salvage value of equipment $2,000 Recovery