Accounting II Chapter 12 Quiz.docx

# Accounting II Chapter 12 Quiz.docx - Chapter 12 Quiz The...

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Chapter 12 Quiz The  SavonaSavona  Company is considering investing in a wind turbine to generate its own power. Any unused power will be  sold back to the local utility company. Between cost savings and new revenues, the company expects to  generate  \$ 798 comma 750\$798,750  per year in net cash inflows from the turbine. The turbine would cost  \$ 4.5\$4.5  million and is expected to have a  2020-year  useful life with no residual value. Calculate the payback period. First enter the formula, then calculate the payback period. (Enter amounts in the formula as whole dollars  and not in millions. Round the payback period to two decimal places.)   /   = Payback period   /   =   years         More                                                      Less Choose from any list or enter any number in the input fields and then continue to the next question. The Johnson Company is considering investing in a wind turbine to generate its own power. Any unused power will be sold back to the local utility company. Between cost savings and new revenues, the company expects to generate \$784,750 per year in net cash inflows from the turbine. The turbine would cost \$4.3 million and is expected to have a 20-year useful life with no residual value. Calculate the NPV assuming the company uses a 12% hurdle rate. (Round your answer to the nearest whole dollar.) LOADING... (Click the icon to view the present value of an annuity table.) LOADING... (Click the icon to view the present value table.) LOADING... (Click the icon to view the future value of an annuity table.) LOADING... (Click the icon to view the future value table.) The NPV is \$ . Enter any number in the edit fields and then continue to the next question. Sonoma is considering investing in solar paneling for the roof of its large distribution facility. The  investment will cost \$9 million and have a six-year useful life and no residual value. Because of rising

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