{"id":67663,"date":"2018-02-20T23:50:30","date_gmt":"2018-02-20T23:50:30","guid":{"rendered":"https:\/\/writemyessayfree.com\/need-accounting-assistance-with-capital-budgeting-3"},"modified":"2017-08-18T05:50:22","modified_gmt":"2017-08-18T05:50:22","slug":"need-accounting-assistance-with-capital-budgeting-3","status":"publish","type":"post","link":"https:\/\/www.benedictsol.com\/blogs\/need-accounting-assistance-with-capital-budgeting-3\/","title":{"rendered":"Need Accounting Assistance with capital budgeting"},"content":{"rendered":"<p>Considerthe following statements about capital budgeting.a. _______ is (are) moreappropriate for long-term investments.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. _______ highlights riskyinvestments.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. _______ shows the effect ofthe investment on the company&#8217;s accrual-based income.&nbsp;&nbsp;d. _______ is the interest ratethat makes the NPV of an investment equal to zero.&nbsp;&nbsp;&nbsp;e. In capital rationingdecisions, management must identify the discount rate when the _______ methodis used.f. _______ provides managementwith information on how fast the cash invested will be recouped.&nbsp;g. _______ is the rate ofreturn, using discounted cash flows, a company can expect to earn byinvesting in the asset.h. _______ does not considerthe asset&#8217;s profitability.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i. _______ uses accrualaccounting rather than net cash inflows in its computation.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Requirement:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. Fill in each statement withthe appropriate capital budgeting method: Payback period, ROR, NPV, or IRR.Water Planet is considering purchasing a water park in Atlanta,Georgia, for $1,870,000. The new facility will generate annual net cashinflows of $460,000 for eight years. Engineers estimate that the facilitywill remain useful for eight years and have no residual value. The companyuses straight-line depreciation, and its stockholders demand an annual returnof 10% on investments of this nature.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Requirements:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. Compute the payback period,the ROR, the NPV, the IRR, and the profitability index of this investment.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Recommend whether thecompany should invest in this project.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Considerthe following statements about capital budgeting.a. _______ is (are) moreappropriate for long-term investments.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. _______ highlights riskyinvestments.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. _______ shows the effect ofthe investment on the company&#8217;s accrual-based income.&nbsp;&nbsp;d. _______ is the interest ratethat makes the NPV of an investment equal to <a href=\"https:\/\/www.benedictsol.com\/blogs\/need-accounting-assistance-with-capital-budgeting-3\/\" class=\"read-more\">Read More &#8230;<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-67663","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts\/67663","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/comments?post=67663"}],"version-history":[{"count":0,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts\/67663\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/media?parent=67663"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/categories?post=67663"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/tags?post=67663"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}