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Denise Seals Problem 13-24

Denise Seals Problem 13-24 - 1 2 3 4 5 6 7 8 9 10 11 12 13...

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13-24 Name: Enter the appropriate amounts in the shaded (gray) cells or select from the drop-down list. 1. Payback period: Payback Year Cash Expenses Balance Years 0 $74,000 1 $16,800 $16,800 57,200 1.00 2 24,000 24,000 33,200 1.00 3 29,400 29,400 3,800 1.00 4 29,400 3,800 0 0.13 $99,600 3.13 2. Accounting rate of return using original investment: Average cash flow $99,600 / 4 = $24,900 Average depreciation 17,000 Difference $7,900 Divided by original investment 74,000 Accounting rate of return 10.7% Accounting rate of return using average investment: Difference (from above) $7,900 Divided by average investment 40,000 Accounting rate of return 19.8% 3. Year Cash Flow Discount Factor Present Value 0 $(74,000) 1.000 $(74,000) 1 16,800 0.893 Wrong 15,002 2 24,000 0.797
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