The information below relates to the purchase of equipment: investment in the project: $10,000 Net annual cash inflows: 2,400 Working capital required: 5,000 Salvage value of the equipment: 1,000 Life of the project: 8 years At the completion of the project, the working capital will be released for use elsewhere. Compute the net present value of the project, using a discount rate of 10% $606 $8,271 ($1,729) $1,729

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A: Introduction Payback period: It is the method of capital investment evaluation. This method counts…

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A: A method of capital budgeting that helps to evaluate the present worth of cash flow and a series of…

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A: Formulas:

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Q: Perit Industries has $135,000 to invest. The company is trying to decide between two alternative…

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Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.