Open Question: Accounting - please last question - I need help?

29 July 2010, 10:32 am

The management of Wyoming Corporation is considering the purchase of a new machine costing $375,000. The company's desired rate of return is 6%. The present value factor for an annuity of $1 at interest of 6% for 5 years is 4.212. In addition to the foregoing information, use the following data in determining the acceptability in this situation:In year 1, the income from operations is $18,750 and the net cash flows is $93,750. In year 2, the income from operations is $18,750 and the net cash flows is $93,750. In year 3, the income from operations is $18,750 and the net cash flows is $93,750. In year 4, the income from operations is $18,750 and the net cash flows is $93,750. In year 5, the income from operations is $18,750 and the net cash flows is $93,750. The average rate of return for this investment is: A) 25% B) 5% C) 10% D) 15%... Read More »

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