The management of Zachery Corporation is considering the purchase of an automated molding machine that would cost $203,255, would have a useful life of 5 years, and would have no salvage value. The automated molding machine would result in cash savings of $65,000 per year due to lower labor and other costs. (Ignore income taxes.)Refer to Exhibit 12B-1 and Exhibit 12B-2, to determine the appropriate discount factor(s) using the tables provided.Required:Determine the internal rate of return on the investment in the new automated molding machine.
What will be an ideal response?
Factor of the internal rate of return = Investment required ÷ Annual net cash inflow
= $203,255 ÷ $65,000 = 3.127
The factor of 3.127 for 5 years represents an internal rate of return of 18%.
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Judicial review is the power of the judiciary to declare an act of the federal government unconstitutional
Indicate whether the statement is true or false
A company reported net income of $78,000 and had 15,000 common shares outstanding throughout the current year. At year-end, the price per share of the company's stock was $49.40. What is the company's year-end price-earnings ratio?
What will be an ideal response?
Which of the following statements is CORRECT?
A. The term "IPO" stands for Introductory Price Offered, and it is the price at which shares of a new company are offered to the public. B. IPO prices are generally established by the market, and buyers of the new stock must pay the price that prevails at the close of trading on the day the stock is offered to the public. C. In a "Dutch auction," investors who want to buy shares in an IPO submit bids indicating how many shares they want to buy and the price they are willing to pay. The company determines how many shares it wants to sell. The highest price that enables the company to sell the desired number of shares is the price that all buyers must pay. D. It is possible that the price set in an IPO is so high that investors will refuse to buy the number of shares that the company wants to sell. In this situation, the IPO is said to be oversubscribed. E. It is possible that the price set in an IPO is so low that investors will want to buy more shares than the company wants to sell. In that case, the company will have to issue more shares than it wants to sell.
The accounting records of Omar Corporation contained the following information for last year: BeginningEndingDirect materials inventory$9,000 $7,000 Work in process inventory$17,000 $31,000 Finished goods inventory$10,000 $15,000 Manufacturing Costs IncurredDirect materials used$72,000Overhead applied$24,000Direct labor cost (10,000 hours)$80,000Depreciation$10,000Rent$12,000Taxes$8,000Unadjusted cost of goods sold (does not includeoverapplied or underapplied overhead)$157,000 Selling, General, andAdministrative Costs IncurredAdvertising$35,000 Rent$20,000 Clerical$25,000 The cost of goods manufactured for the year was:
A. $162,000 B. $135,000 C. $168,000 D. $190,000