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Accounting and Finance - ACC515 - Assignment

   

Added on  2020-03-04

10 Pages1170 Words49 Views
Finance
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Accounting and Finance Assignment
Accounting and Finance  - ACC515 - Assignment_1

Answer 1:1.1Payback PeriodPayback MethodInitial Investment390000Statement of Cummulative Cash FlowsYearCash InflowCummulative CF180000.0080000.002120000.00200000.003100000.00300000.004110000.00410000.00590000.00500000.00Payback years3years + {(390000-300000)/(410000-300000)}3.82years1.2Accounting Rateof ReturnAnnualDepreciation(390000-10000)/576000.00YearCash InflowSalvage ValueDepreciationAccountingIncome180000.0076000.004000.002120000.0076000.0044000.003100000.0076000.0024000.004110000.0076000.0034000.00590000.0010000.0076000.0024000.00Total130000.00AverageAccountingincome26000.00AverageInvestment200000.00Average ARRAverage AccountingIncome/average
Accounting and Finance  - ACC515 - Assignment_2

Investment13.00%1.3 The payback period is 3.82 years and requires is less or equal to 4 years. Therefore project can be accepted on the basis of payback period.The return from the project is 13% but required rate of return is 25% that makes it difficult to accept the project because company wants higher return on the project and it is given less profit.1.4Average Accounting income26000.00Average Investment200000.00Average ARRAverage Acounting Income/average Investment13.00%1.3The payback peroid is 3.82 years and requires is less or equal to 4 years. Therefore project can be accpeted on the basis of payback peroid.1.4Net Present ValueStatement of Cash FlowsYearParticularsCash OutflowCash InflowsLess DepreciationPBTTax @30%PATPBDAT0Machine Cost390000.001PB Depreciation80000.00760004000.001200.002800.0078800.002PB Depreciation120000.007600044000.0013200.0030800.00106800.003PB Depreciation100000.007600024000.007200.0016800.0092800.004PB Depreciation110000.007600034000.0010200.0023800.0099800.005PB Depreciation90000.007600014000.004200.009800.0085800.005Salvage Value10000.00Cost of capital10%Statement for calculation of present Value of Cash inflowsYearCash InflowPVF @ 10%PV178800.000.90971636.36The return from the projetc is 13% but required rate of return is 25% that makes it difficult to accpet the project because company wants higher return on the project and it is given less profit.1.5 I will choose NPV to make the ultimate decision.
Accounting and Finance  - ACC515 - Assignment_3

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