Overland Corporation has gathered the following data on a proposed investment project:
Investment required in equipment: $150,000
Annual cash inflow: $40,000
Salvage value of equipment: $0
Life of the investment: 10 years
Required rate of return: 10%
The company uses straight-line depreciation on all equipment. Assume cash flows occur
uniformly throughout a year except for the initial investment.
The payback period for the investment is:
A. 0.27 years
B. 3.75 years
C. 10.00 years
D. 2.13 years
The net present value of this investment is:
A. $40,000
B. $3,625
C. $57,831
D. $95,800
The internal rate of return on the investment is closest to:
A. 23%
B. 25%
C. 24%
D. 21%
Answers (1)
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “Overland Corporation has gathered the following data on a proposed investment project: Investment required in equipment: $150,000 Annual ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers
You Might be Interested in
How are present values affected by changes in interest rates? A. The lower the interest rate, the larger the present value will be. B. The higher the interest rate, the larger the present value will be. C.
Answers (1)
What is an advantage of entrepreneurship
Answers (2)
In his analysis of the Dell fraud for Forbes, Edward Hess comments: "Too often, the market's maniacal focus on creating ever-increasing quarterly earnings drives bad corporate behavior, as it apparently did at Dell.
Answers (1)
When Kendra's manager asked the team to come up with new ideas for attracting people to their trade show booth, Kendra suggested installing a video game in the booth. Which part of the rational decision making process does Kendra's idea exemplify? a.
Answers (1)
Market failure is said to occur whenever: prices rise some consumers who want a good do not obtain it because the price is higher than they are willing to pay. private markets do not allocate resources in the most economically desirable way.
Answers (1)
New Questions in Business
If you were using a simple exponential smoothing forecast model (alpha value equal to 0.30) that generated a forecast of 25.
Answers (1)
McMurphy Corporation produces a part that is used in the manufacture of one of its products. The costs associated with the production of 12,000 units of this part are as follows: 36) Direct materials Direct labor Variable factory overhead Fixed
Answers (1)
The basic financial statements include all of the following except: Select one: a. Management's Discussion & Analysis b. Fund-basis financial statements c. Notes to the financial statements d. Government-wide statements e.
Answers (1)
The whole idea behind mass production was to: a. produce goods of the highest possible quality. b. give producers the maximum flexibility to respond to customer preferences. c. make large quantities of a limited variety of products at very low cost.
Answers (1)
Provenzano Corporation manufactures two products: Product B56Z and Product D32N. The company is considering implementing an activity-based costing (ABC) system that allocates its manufacturing overhead to four cost pools.
Answers (1)