Company. His annual pay raises are largely determined by his division's return on investment (ROI), which has been above 20% each of the last three years. Derrick is considering a capital budgeting project that would require a $3,300,000 investment in equipment with a useful life of five years and no salvage value. Holston Company's discount rate is 17%. The project would provide net operating income each year for five years as follows: Fixed expenses: Advertising, salaries, and other fixed out-of-pocket costs Depreciation Total fixed expenses Net operating income Req 1 Click here to view Exhibit 7B-1 and Exhibit 7B-2, to determine the appropriate discount factor(s) using tables. Required: 1. Compute the project's net present value. 2. Compute the project's simple rate of return. 3a. Would the company want Derrick to pursue this investment opportunity? 3b. Would Derrick be inclined to pursue this investment opportunity? Req 2 Net present value Complete this question by entering your answers in the tabs below. Req 3A Saved $ 640,000 660,000 Req 38 $2,900,000 1,200,000 1,700,000 Rey 1,300,000 $ 400,000 Compute the project's net present value. (Round your final answer to the nearest whole dollar amount.) Hel Reg 2 >
14 Derrick Iverson is a divisional manager for Holston Company. His annual pay raise investment (ROI), which has been above 20% each of the last three years. Derrick require a $3,300,000 investment in equipment with a useful life of five years and r 17%. The project would provide net operating income each year for five years as fo Sales Variable expenses Contribution margin Fixed expenses: Advertising, salaries, and other fixed out-of-pocket costs Depreciation Total fixed expenses Net operating income Click here to view Exhibit 7B-1 and Exhibit 7B-2, to determine the appropriate discount Req 1 $ 640,000 660,000 Required: 1. Compute the project's net present value. 2. Compute the project's simple rate of return. 3a. Would the company want Derrick to pursue this investment opportunity? 3b. Would Derrick be inclined to pursue this investment opportunity? Req 2 $2,900,000 1,200,000 1,700,000 Complete this question by entering your answers in the tabs below. Req 3A 1,300,000 $ 400,000 Req 3B Compute the project's net piesent value. (Round your final answer to the nearest whole dollar Net present value Req 2 >>
Derrick Iverson is a divisional manager for Holston Company. His annual pay raises a investment (ROI), which has been above 20% each of the last three years. Derrick is require a $3,300,000 investment in equipment with a useful life of five years and no 17%. The project would provide net operating income each year for five years as follo Sales Variable expenses Contribution margin Fixed expenses: Advertising, salaries, and other fixed out-of-pocket costs Depreciation Total fixed expenses Net operating income Click here to view Exhibit 7B-1 and Exhibit 7B-2, to determine the appropriate discount fa Required: 1. Compute the project's net present value. 2. Compute the project's simple rate of return. 3a. Would the company want Derrick to pursue this investment opportunity? 3b. Would Derrick be inclined to pursue this investment opportunity? Req 2 Req 3A Complete this question by entering your answers in the tabs below. % $ 640,000 660,000 Req 1 Compute the project's simple rate of return. (Round your answer to 1 decimal place i.e. 0.123 st 12.3%.) Simple rate of return Req 3B < $2,900,000 1,200,000 1,700,000 1,300,000 $ 400,000 Req 1 Req 3A >
04 Derrick Iverson is a divisio investment (ROI), which has been above 20% each of the last three years. Derrick is require a $3,300,000 investment in equipment with a useful life of five years and no 17%. The project would provide net operating income each year for five years as follo Sales Variable expenses Contribution margin Fixed expenses: Advertising, salaries, and other fixed out-of-pocket costs Depreciation Total fixed expenses Net operating income Req 1 Click here to view Exhibit 7B-1 and Exhibit 7B-2, to determine the appropriate discount fa Required: 1. Compute the project's net present value. 2. Compute the project's simple rate of return. 3a. Would the company want Derrick to pursue this investment opportunity? 3b. Would Derrick be inclined to pursue this investment opportunity? Complete this question by entering your answers in the tabs below. Req 2 Yes ONO Req 3A $ 640,000 660,000 Req 3B $2,900,000 1,200,000 1,700,000 1,300,000 $ 400,000 Would the company want Derrick to pursue this investment opportunity? < Req 2 Req 38
Derrick Iverson is a divisional manager for Holston Company. His annual pay raise nvestment (ROI), which has been above 20% each of the last three years. Derrick require a $3,300,000 investment in equipment with a useful life of five years and r 17%. The project would provide net operating income each year for five years as fo Sales Variable expenses Contribution margin Fixed expenses: Advertising, salaries, and other fixed out-of-pocket costs Depreciation Total fixed expenses Net operating income Req 1 Click here to view Exhibit 7B-1 and Exhibit 7B-2, to determine the appropriate discount Required: 1. Compute the project's net present value. 2. Compute the project's simple rate of return. 3a. Would the company want Derrick to pursue this investment opportunity? 3b. Would Derrick be inclined to pursue this investment opportunity? Complete this question by entering your answers in the tabs below. Req 2 Yes ONO Req 3A $ 640,000 660,000 Req 38 Would Derrick be inclined to pursue this investment opportunity? $2,900,000 1,200,000 1,700,000 Req 3A 1,300,000 $ 400,000
Sales Variable expenses Contribution margin. Derrick Iverson is a divisional manager for Holston Sales Variable expenses Contribution margin. Derrick Iverson is a divisional manager for Holston Company. His annual pay
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