Generro Company is considering the purchase of equipment that would cost $36,000 and offer annual cash inflows of $10,500 over its useful life of 5 years. Assuming a desired rate of return of 12%, is the project acceptable?
A. Yes, since the positive net present value indicates the investment will earn a rate of return greater than 12%.
B. Yes, since the investment will generate $52,500 in future cash flows, which is greater than the purchase cost of $36,000.
C. No, since the negative net present value indicates the investment will yield a rate of return below the desired rate of return.
D. The answer cannot be determined.
Answer: A
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Fill in the blank(s) with correct word
Which of the following procedures is more likely to be performed in a review engagement of a nonpublic entity than in a compilation engagement?
A. Gaining an understanding of the accounting principles and practices in the industry. B. Gaining an understanding of the entity's business transactions. C. Obtaining a representation letter from the chief executive officer. D. Assisting the entity in adjusting the accounting records.
Answer the following statement(s) true (T) or false (F)The Lean Start-Up methodology is hypothesis-driven.
The Lean Start-Up methodology is hypothesis-driven.
Skolnick Corporation has provided the following information:??Cost per UnitCost per Period?Direct materials$5.70??Direct labor$3.60??Variable manufacturing overhead$1.50??Fixed manufacturing overhead?$121,500?Sales commissions$1.00??Variable administrative expense$0.45??Fixed selling and administrative expense?$36,450Required:a. If 8,000 units are produced, what is the total amount of direct manufacturing cost incurred?b. If 8,000 units are produced, what is the total amount of indirect manufacturing costs incurred?
What will be an ideal response?