Operating cash inflow DOCX

Title	Operating cash inflow
Author	Nicole Aytona
Pages	11
File Size	22.8 KB
File Type	DOCX
Total Downloads	24
Total Views	79

Summary

Operating cash inflow 1. The Lakers Company is interested in buying a piece of equipment that is needs. The following data assembled concerning this equipment: Cost of required equipment P250,000 Working capital required P100,000 Annual operating cash inflow 80,000 Cash repair at end of 4 years 40,0...

Description

Operating cash nnlow 1. The Lakers Company is interested in buying a piece of equipment that is needs. The following data assembled concerning this equipment: Cost of required equipment P250,000 Working capital required P100,000 Annual operatng cash infow 80,000 Cash repair at end of 4 years 40,000 Salvage value at end of 6 years 90,000 This equipment is expected to have a useful life of 6 years. At the end of the sixth year the working capital is 10%. Use the net present value method to answer the following queston. The PV of all future operatng cash infow is a. P617,280 b. P45,120 c. P348,400 d. P278,710 Answer: C. Annual Operatng Cash Infow P 80,000 X Present Value of 1 in 6 periods 4,355 Present Value of Operatng Cash Infow P348,400 2. The Jackson Company has invested in a machine that cost P70,00, that has a useful life of seven years, and that has no salvage value at the end of its useful life. The machine is being depreciated by the straight-line method, based on its useful life. It will have payback period of four years. Given these data, the simple rate of return (to the nearest tenth of a percent) on the machine will be (ignore taxes) a. 7.1% b. 8.2%...