Ac 556 Week 5 Assingment

 Ac 556 Week some Assingment Article

| Week 4| | | | | | |

| Capital Budgeting Problem| | | | | | |

| | | | | | | |

Data: | | | | | | |

Primary investment| $80, 000| | | | | |

Increase in working capital| $20, 000| | | | | |

Length of investment| 6| | | | | |

Salvage value| $8, 000| | | | | |

Ahead of tax annual cash inflows| $28, 500 | | | | | | | Taxes rate| 35%| | | | | |

Discount rate| 14%| | | | | |

| | | | | | | |

1 . Total annual accounting income| | | | | | |

| Annual money inflows| $28, 500 | | | | | |

| Downgrading expense| doze, 000| | | | | |

| В | В | | | | | |

| EBT| 16, 500| | | | | |

| Income tax| a few, 775| | | | | |

| В | В | | | | | |

| Accounting Income| $12, 725 | | | | | |

| В | В | | | | | |

| | | | | | | |

2 . Twelve-monthly after duty cash inflows| | | | | | |

| Accounting income| $10, 725 | | | | | |

| Add again depr. Expense| 12, 000| | | | | |

| В | В | | | | | |

| Annual following tax cash inflows| $22, 725 | | | | | | | | В | В | | | | | |

| | | | | | | |

3. Payback based upon first cash outflows| | | | | | | | Preliminary investment| $80, 000| В | | | | |

| Increase in WC| $20, 000| В | | | | |

| В | В | В | | | | |

| Initial funds outflows| $22.99, 000| В | | | | |

| В | В | В | | | | |

| Total annual after tax cash inflows| $22, 725| В | | | | | | | В | В | В | | | | |

| Payback| 5. 4| years| | | | |

| В | В | В | | | | |

| | | | | | | |

some. Discounted payback based upon preliminary cash outflows| | | | | | | | | | | | | |

| В | Annual funds inflows| 14% PV factor| Discounted funds flows| В | Balance of initial investment| Discounted payback| В |...

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