Accounting

Payback, Net present value, and depreciation tax shield 1)Calculate the payback for a project that costs $1,000 and
is expected to provide cash inflows of $400 per year for the next three years
If the required payback is 3 years, should the firm accept the project?

2)Calculate the net present value for a project that costs
$1,000 and is expected to provide cash inflows of $400 per year for the next
three years if the cost of capital is 10% Should the firm accept the

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3)Calculate the depreciation tax shield for an asset that
costs $100,000 and is depreciated over 10 years using straight line
depreciation if the firm’s tax rate is 30%

4) You are at retirement age and one of your benefit options is to accept a monthly annuity of $6,900 for 20 years What lump sum settlement, if paid today, would have the same present value as the $6,900 monthly annuity? Assume a 5 percent discount rate

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