# help 416533

 Wing Walker Aces (WWA), Inc., is considering the purchase of a small plane to use in its wing walking demonstrations and aerial tour business. Various information about the proposed investment follows:
 Initial investment \$ 110,000 Useful life 10 years Salvage value \$ 10,000 Annual net income generated \$ 5,400 WWA’s cost of capital 10 %

1. value:

10.00 points

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 Required: Help WWA evaluate this project by calculating each of the following:
 Accounting rate of return %

 Worksheet Learning Objective: 08 01 Calculate the accounting rate of return and describe its major weaknesses. Learning Objective: 08 03 Calculate net present value and describe why it is superior to the other capital budgeting techniques. Difficulty: Hard Learning Objective: 08 02 Calculate the payback period and describe its major weaknesses. Learning Objective: 08 04 Predict the internal rate of return and describe its relationship to net present value.

2. value:

10.00 points

 Payback period years

3. value:

10.00 points

 (c) Net present value (NPV). (Use Table 2 &Table 4.) (Negative amount should be indicated by a minus sign. Round your intermediate calculations to 4 decimal places and final answer to the nearest whole dollar amount. Omit the “\$” sign in your response.)
 Net present value \$

rev: 04 11 2011 check my workeBook Links (4)references

4. value:

10.00 points

 (d) Recalculate WWA’s NPV assuming the cost of capital is 6 percent. (Use Table 2 &Table 4.) (Round your intermediate calculations to 4 decimal places and final answer to the nearest whole dollar amount. Omit the “\$” sign in your response.)

 Net present value \$

rev: 04 15 2011 check my workeBook Links (4)references

Calculator

Total price:\$26
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