4. The present value payback period, in years, of the proposed investment under the assumption that cash inflows occur evenly throughout the year. (Note: Because of this assumption, the present value calculations will be approximate, not exact.) To calculate present value amounts, use the appropriate factors from Appendix C, Table 1. Round your answer to 1 decimal place. For example, 3.481 years = 3.5 years. 5. The internal rate of return (IRR), rounded to 1 decimal place (e.g., 13.612% = 13.6%). Page 0527 6. The modified internal rate of return (MIRR), rounded to 1 decimal place. (In conjunction with this requirement, you might want to consult either of the following two references: https://support.office.com/en-us/Search/results?query=mirr+function&src=as and/or www.journalofaccountancy.com/issues/2017/feb/calculate-internal-rate-of-return-in-excel.html.)
4. The present value payback period, in years, of the proposed investment under the assumption that cash inflows occur evenly throughout the year. (Note: Because of this assumption, the present value calculations will be approximate, not exact.) To calculate present value amounts, use the appropriate factors from Appendix C, Table 1. Round your answer to 1 decimal place. For example, 3.481 years = 3.5 years. 5. The internal rate of return (IRR), rounded to 1 decimal place (e.g., 13.612% = 13.6%). Page 0527 6. The modified internal rate of return (MIRR), rounded to 1 decimal place. (In conjunction with this requirement, you might want to consult either of the following two references: https://support.office.com/en-us/Search/results?query=mirr+function&src=as and/or www.journalofaccountancy.com/issues/2017/feb/calculate-internal-rate-of-return-in-excel.html.)
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
Transcribed Image Text:4. The present value payback period, in years, of the proposed investment under the assumption that cash inflows occur evenly throughout
the year. (Note: Because of this assumption, the present value calculations will be approximate, not exact.) To calculate present value
amounts, use the appropriate factors from L Appendix C, L Table 1. Round your answer to 1 decimal place. For example, 3.481 years
= 3.5 years.
5. The internal rate of return (IRR), rounded to 1 decimal place (e.g., 13.612% = 13.6%).
Page 0527
6. The modified internal rate of return (MIRR), rounded to 1 decimal place. (In conjunction with this requirement, you might
want to consult either of the following two references: https://support.office.com/en-us/Search/results?query=mirr+function&src=as
and/or www.journalofaccountancy.com/issues/2017/feb/calculate-internal-rate-of-return-in-excel.html.)
![C LO 12-4, L 12-6]
12-49
Basic Capital Budgeting Techniques; No Taxes, Uniform Net Cash Inflows;
Spreadsheets Bob Jensen Inc. purchased a $650,000 machine to manufacture specialty taps
for electrical equipment. Jensen expects to sell all it can manufacture in the next 10 years. To
encourage capital investments, the government has exempted taxes on profits from new
investments. This legislation is to be in effect for the foreseeable future. The machine is expected
to have a 10-year useful life with no salvage value. Jensen uses straight-line depreciation. The net
cash inflow is expected to be $150,000 each year for 10 years. Jensen uses a 12% discount rate in
evaluating capital investments. Assume, for simplicity, that MACRS depreciation rules do not
аpply.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F0a63f6a7-ec54-4c0e-abf5-810ded572838%2F0bc4c9ba-17a7-468c-ab69-3e76f634d1c5%2Fzlfy7r_processed.png&w=3840&q=75)
Transcribed Image Text:C LO 12-4, L 12-6]
12-49
Basic Capital Budgeting Techniques; No Taxes, Uniform Net Cash Inflows;
Spreadsheets Bob Jensen Inc. purchased a $650,000 machine to manufacture specialty taps
for electrical equipment. Jensen expects to sell all it can manufacture in the next 10 years. To
encourage capital investments, the government has exempted taxes on profits from new
investments. This legislation is to be in effect for the foreseeable future. The machine is expected
to have a 10-year useful life with no salvage value. Jensen uses straight-line depreciation. The net
cash inflow is expected to be $150,000 each year for 10 years. Jensen uses a 12% discount rate in
evaluating capital investments. Assume, for simplicity, that MACRS depreciation rules do not
аpply.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 5 steps with 6 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