A computer call center is going to replace all of its incandescent lamps with more energy-efficient fluorescent lighting fixtures. The total energy savings are estimated to be $1,875 per year, and the cost of purchasing and installing the fluorescent fixtures is $4,900. The study period is five years, and terminal market values for the fixtures are negligible. Solve, a. What is the IRR of this investment? b. What is the simple payback period of the investment? c. Is there a conflict in the answers to Parts (a) and (b)?List your assumptions. d. The simple payback “rate of return” is 1/θ. How close does this metric come to matching your answer in Part (a)?

Q: (Net present value calculation) Big Steve's, makers of swizzle sticks, is considering the purchase…

A: Investment amount = $90,000 Annual cash inflow = $17,000 Period = 9 Years

Q: Just because a project's payback period is relatively long doesn't mean it is not profitable in the…

A: The payback period will reflect a period for recovering back initial investment and it will not…

Q: OptiLux is considering investing in an automated manufacturing system. The system requires an…

A: Net Present Value (NPV) :— It is the sum of present value of all cash flows. It is also calculated…

Q: Refer to the problem given in answering the following questions:(a) How long does it take to recover…

A: The pay-back period is a capital budgeting technique that is used to find out the period when…

Q: Analysts predict that Burks Corporation will have free cash flows (FCFs) of negative $20 million at…

A: WACC is 11% Net Debt is $30million Stocks outstanding is 3 milllion   To Find: current price per…

Q: A company is investing in a solar panel system to reduce its electricity costs. The system requires…

A: Investments: Companies invest in stocks and bonds of other companies or governmental entity to…

Q: Waste Management Inc. is analyzing an average-risk project, and the following data have been…

A: Given, WACC = 9.50%, New Investment = $100,000 Units Sold    = 40,000 Avg price per unit = 25 Annual…

Q: Fantastic Footwear can invest in one of two different automated clicker cutters. The first, A, has a…

A: IRR refers to the internal rate of return. IRR is the rate at which NPV is nil.

Q: 3. An untreated electric wooden pole that will last 10 years under certain soil condition costs…

A: If we take untreated pole, we will have to buy 2 poles in 20 years; i.e. first pole now and another…

Q: OptiLux is considering investing in an automated manufacturing system. The system requires an…

A: Net present value (NPV) is the difference between the present value of cash inflows and the present…

Q: Consider the retrofitted space-heating system with given the investment of $110,000 and market value…

A: The question is based on the calculation of economic worth of machine.

Q: A new computer system will require an initial outlay of $20, 500, but it will increase the firm's…

A: NPV is also known as Net Present Value.. It is a capital budgeting technique which helps in decision…

Q: OptiLux is considering Investing in an automated manufacturing system. The system requires an…

A: NPV means Net present value.It is a capital budgeting technique used for making investment…

Q: Perform a financial analysis for an IT Project which requires an initial investment of $32,000, but…

A: Present value = future value / (1+rate)^no. of years

Q: What is the Accounting rate of return. Calculate the payback period in years & months Compute the…

A: Here, Purchase price is $240,000 Residual value  is $40,000 Desired payback period is 4 years…

Q: You are considering a CNC machine. This machine will have an estimated service life of 10 years with…

A: Annaual savings is $60,000.The period is 10 years.The salvage value at the end of 10 years is 10% of…

Q: payback period

A: A project's payback period is the number of years required to recoup the money spent on it. We don't…

Q: Big​ Steve's, makers of swizzle​ sticks, is considering the purchase of a new plastic stamping…

A: Initial Investment = $95,000Annual Cash Flow = $21,000Life of Project = 9 yearsAnswer a.Discount…

Q: OptiLux is considering investing in an automated manufacturing system. The system requires an…

A: Internal rate of return method:-The internal rate of return is the discount rate at which the net…

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A: Capital budgeting indicates the evaluation of the profitability of possible investments and projects…

Q: what annual savings in shipping expenses must there be justify the purchase of the software?

A: Present value illustrates the current value of a sum of money that will be received or paid in the…

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A: Net Present Value is the modern method of capital budgeting that is used to determine the worth of…

Q: 2. The Paktika Apple Orchard has always hired part-time workers to pick its annual apple crop.…

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A: A payback period is the time period in which a project will generate enough cash flows to cover the…

Q: Ang Electronics, Incorporated, has developed a new mesh network. If successful, the present value of…

A: Go to market now:Expected Net Present Value = ($34,900,000 * 50%) + ($12,900,000 * 50%)…

Q: Mr Dela Cruz is going to buy a new machine for manufacturing its product: Machine A has a first cost…

A: The net gain or loss of an investment over a specific time period, stated as a percentage of the…

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A: Discounted pay back period is a Capital budgeting techniques which help in decision making on the…

Q: A new engineer is evaluating whether to use a larger-diameter pipe for a water line. It will cost…

A: The present worth of an investment is the net current worth of a project computed by deducting the…

Q: Fantastic Footwear can invest in one of two different automated clicker cutters. The first, A, has a…

A: The IRR of a project is used to measure the project’s profitability. It equates the NPV to zero to…

Q: Fantastic Footwear can invest in one of two different automated clicker cutters. The first, A, has a…

A: The IRR of a project is used to measure the project’s profitability. It equates the NPV to zero to…

Q: OptiLux is considering investing in an automated manufacturing system. The system requires an…

A: Net present value is present value of cash flow minus initial investment.

Q: (Net present value calculation) Big Steve's, makers of swizzle sticks, is considering the purchase…

A: Initial Outlay $ -95,000.00Net cash inflow $  16,000.00Tenure11YearsDiscount rate9%

Q: A new computer system will require an initial outlay of $20,000, but it will increase the firm's…

A: Initial outlay = $20,000Cash flow = $4,300Number of years = 8 years

Q: The electric power supply for a new industrial complex is being planned, and you are asked to…

A: Interest Rate 12% Time Period 25   Alternative A Cost of New construction  $…

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A: Cost of computer=$100000Period=n=5yearsAnnual decrease=g=-2%Required rate=10%Required is to…

Q: A remotely situated fuel cell has an installed cost of $1,900 and will reduce existing surveillance…

A: Installed cost=$1900Annual savings=$500Period=n=15 yearsMARR=r=8%Salvage value=$350

Q: An energy efficiency project has a first cost of $400,000, a life of 10 years, and no salvage value.…

A: Present worth is the increased value of the firm from a prospective project. The present worth is…

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Q: Blossom Company is considering a long-term investment project called ZIP. ZIP will require an…

A: Solution:Internal rate of return on this project :IRR is the rate at which NPV = 0Net annual cash…

Q: Using Excel, compute the internal rate of return for the proposed investment. (Round your answer to…

A: Internal Rate of Return (IRR) is the Discount rate where a project returns equal to its initial…

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.