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MU Acct 2037 Ch 20 HW Solution

MU Acct 2037 Ch 20 HW Solution - 20-19(a(b(c Present value...

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20-19 (a) Present value = $500 x 0.5674 = $283.70 (b) Present value = $100 x 3.6048 = $360.48 (c) Present value = ($300 x 0.7118) + ($400 x 0.5674)               = $213.54 + $226.96               = $440.50 (d) Present value = $60 x 5.6502 = $339.01 20-1
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20-25 (1) Present value of (net) cash receipts:   Annual net savings   $4,500 a x 4.1925   = $18,866.25   Residual value         $200 x 0.1615   =      32.30     Total     $18,898.55 Investment    (  20,000.00 )   Net present value    ($   1,101.45 ) a $8,000 - $3,200 - $300 No, this capital expenditure is not acceptable. (Its net present value is negative.) (2) If the purchase price of the packaging machine were less than $18,898.55 , this capital  expenditure would be acceptable. 20-2
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20-27 (1) Proposal A : Present value of cash receipts: $3,600 x 3.2743 = $11,787.48 Investment   (10,000.00 )   Net present value   $ 1,787.48 Proposal B : Present value of cash receipts: $20,000 x 0.4761 = $ 9,522.00 Investment    (10,000.00 )   Net present value    $  (478.00 ) Proposal C : 20-3
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Present value of cash receipts:   $ 2,000 x 2.7982  = $5,596.40
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