Archive for June, 2011

calculate the payback period ?

carole is considering buying the equipment for her factory

cost of the machine 60,000
estimated residue value 5000
estimated annual net cash flow 18000
estimated useful life 5 years
required rate of return 16%

discounting table:
year 1 0.8620
year2 0.7430
year3 0.6410
year4 0.5520
year5 0.4760

annuity table year 1 to 5

required:
calculate payback period
accounting rate of return
calculate the net present value
plzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzz i neeeeeeeeeeeeeeeeed help iam studying for my exam and i couldnt answer this exercise plzzzzzzzzzzz help plzzzzzzzzzzzzz

On June 30, 2003, Acme Aircraft leased a jumbo jet from Airbus Corp. The terms of the lease require Acme to make: a. a ,000,000 payment on June 30, 2003; b. 20 annual payments of 0,000 on each June 30 beginning June 30, 2003; c. and a ,000,000 payment on June 30, 2005. Accounting standards require this lease to be recorded as a liability for the present value of all scheduled payments. Assume that an 8% interest rate properly reflects the time value of money in this situation. Compute the amount that Acme should record as the lease liability on June 30, 2003, before any payments are made, assuming that the first payments will be made on June 30, 2003.

I got 7,159,138.42

Only things throwing me off is of course it being uneven, and also that i am calculating it BEFORE any payments are made, so i was assuming that its going to be basically PV of an annuity due? I’m confused, and literally every example in my book is even cash flows so its way easier.

So i did it for 1 million at 1 year, plus 500,000 at 20 years, plus 1 million at 3 years. and added it together. That gave me 9,085,060.

I also entered it into the BA II Plus, and it gave me 7,159,138.42. So obviously im missing something here.

If I have an annuity and sell it for cash what is the average % of total annuity worth that they firm buying it will give me for it.
I mean like I win 0,000 in a lawsuit paid to me monthly over 10 years, How much will it cost on day 0 if I sell that annuity for a lump cash payment

Accounting Question Help!?

Rooney, Inc. is considering the purchase of a new machine costing 0,000. The machine’s useful life is expected to be 8 years with no salvage value. The straight-line depreciation method will be used. The net increase in annual after tax cash flow is expected to be 7,000. Thomas estimates its cost of capital to be 14%. (The present value of a annuity for 8 years at 14% is 4.639, and the present value of to be received in 8 years is 0.351

The net present value of the investment in the machine under consideration is:

Thanks for the help!

Powered by Yahoo! Answers