4. Gran's Cleaning Service would like to purchase an ultrasound machine for cleaning window blinds. It would cost P 236,000. Freight cost is P 2,300, Installation cost is 3,500 and the Training cost for the employees is 4,500. Gran estimated that the machine would increase the company's cash flows, net of expense by 32,000 per year. The machine has a 10-year useful life with no salvage value. a) Compute for the machine's internal rate of return to the nearest whole percent. b) Compute the machine's net present value at 5%.
4. Gran's Cleaning Service would like to purchase an ultrasound machine for cleaning window blinds. It would cost P 236,000. Freight cost is P 2,300, Installation cost is 3,500 and the Training cost for the employees is 4,500. Gran estimated that the machine would increase the company's cash flows, net of expense by 32,000 per year. The machine has a 10-year useful life with no salvage value. a) Compute for the machine's internal rate of return to the nearest whole percent. b) Compute the machine's net present value at 5%.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question
PLEASE ANSWER WITH COMPLETE AND CLEAR SOLUTION.
Transcribed Image Text:4. Gran's Cleaning Service would like to purchase an ultrasound machine for cleaning window
blinds. It would cost P 236,000. Freight cost is P 2,300, Installation cost is 3,500 and the
Training cost for the employees is 4,500. Gran estimated that the machine would increase the
company's cash flows, net of expense by 32,000 per year. The machine has a 10-year useful life
with no salvage value.
a) Compute for the machine's internal rate of return to the nearest whole percent.
b) Compute the machine's net present value at 5%.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps with 3 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.Recommended textbooks for you
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education