Paragas, Inc., is considering the purchase of a machine that would cost $370,000 and would last for 8 years. At the end of 8 years, the machine would have a salvage value of $52,000. The machine would reduce labor and other costs by $96,000 per year. Additional working capital of $4,000 would be needed immediately. All of this working capital would be recovered at the end of the life of the machine. The company requires a minimum pretax return of 19% on all investment projects. (Ignore income taxes.)Refer to Exhibit 12B-1 and Exhibit 12B-2, to determine the appropriate discount factor(s) using the tables provided.The net present value of the proposed project is closest to:
A. $9,584
B. $78,530
C. $19,528
D. $22,532
Answer: C
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Indicate whether the statement is true or false.
Indicate how each event affects the elements of financial statements. Use the following letters to record your answer in the box shown below each element. You do not need to enter dollar amounts. (Note that "Not Affected" means that the event does not affect that element of the financial statements or the event causes an increase in that element that is offset by a decrease in the same element.)Increase = IDecrease = DNot Affected = NAAfter a physical count of its inventory, Wetzel Co. discovered that $400 of inventory is missing. Show how the adjustment for inventory shrinkage would affect Wetzel Co.'s statements.AssetsLiabilitiesStk. EquityRevenuesExpensesNet IncomeStmt of Cash Flows???????
What will be an ideal response?
Your company has received a $50,000 loan from an industrial finance company. The annual
payments are $6,202.70. If the company is paying 9 percent interest per year, how many loan payments must the company make? A) 13 B) 19 C) 12 D) 15