A food processing company is considering replacing essentialmachinery. Cost and relevant cash flow details are providedin the table at the right. The company requires an 11% returnon its capital. Students must do their own work, with nohelp/solutions provided by others.Cost of ProjectYr 1 cash flowYr 2 cash flowYr 3 cash flow($2,000,000)(200,000)(75,000)90,000Yr 4 cash flow150,000Yr 5 cash flowa) What is the present value of the yearly cash flows? Use aTime Value of Money function for full credit. (round tonearest dollar)Yr 6 cash flow600,0001,400,000Yr 7 cash flow2,500,000b) What is the net present value of the project? (round tonearest dollar)c) What is the internal rate of return of the project? Use aTime Value of Money function for full credit. (round to two

Calculate Present ValuePresent value (PV) is the current value of a future sum of money or stream of…

Answered: A food processing company is…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 1PA: Your company is planning to purchase a new log splitter for is lawn and garden business. The new...

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You work for an outdoor play structure manufacturing company and are trying to decide between the following two projects: (Click on the following icon in order to copy its contents into a spreadsheet.) Year-End Cash Flows ($ thousands) 1 19 39 Project Playhouse Fort You can undertake only one project. If your cost of capital is 8%, use the incremental IRR rule to make the correct decision. 0 - 27 - 78 2 20 50 IRR 28.2% 8.9% The incremental IRR is %. (Round to two decimal places.) With the incremental IRR at - 1.23% and the cost of capital of 8%, you should undertake the ▼ (Select from the drop-down menu.)
You work for an outdoor play structure manufacturing company and are trying to decide between the following two projects: (Click on the following icon in order to copy its contents into a spreadsheet.) Project Playhouse Fort Year-End Cash Flows ($ thousands) 1 2 18 IRR 33.8% 13.2% 52 You can undertake only one project. If your cost of capital is 7%, use the incremental IRR rule to make the correct decision. 0 -25 -75 The incremental IRR is%. (Round to two decimal places.) 20 39 Save OL
You work for an outdoor play structure manufacturing company and are trying to decide between the following two projects: (Click on the following icon in order to copy its contents into a spreadsheet.) Project Playhouse Fort Year-End Cash Flows ($ thousands) 1 0 - 26 - 76 19 40 The incremental IRR is %. (Round to two decimal places.) 2 19 52 IRR 29.5% 13.1% You can undertake only one project. If your cost of capital is 5%, use the incremental IRR rule to make the correct decision.
X-treme Vitamin Company is considering two investments, both of which cost $10,000. The cash flows are as follows: NOTE: you must show your work for ALL steps for full credit. Year Proj A Proj B 1 $ 12,000.00 $10,000.00 2 $8,000.00 $6,000.00 3 $ 6,000.00 $16,000.00 a. Which of the two projects should be chosen based on the payback method b. Which of the two projects should be chosen based on the net present value method? Assume a cost of capital of 10 percent. c. Should a firm normally have more confidence in answer a or answer b.
The Management of Cullumber Manufacturing Company is evaluating two forklift systems to use in its plant that produces the towers for a windmill power farm. The costs and the cash flows from these systems are shown below. The company uses a 10 percent discount rate for all projects. Year 0 Year 1 Year 2 Year 3 Otis Forklifts $-3,109,450 $995,225 $1,376,886 $2,092,497 Craigmore Forklifts $-4,128,410 $856,236 $1,750,225 $2,851,110 Calculate net present value (NPV). (Enter negative amounts using negative sign e.g. -45.25. Do not round Discount factors.Round other intermediate calculations and final answers to 0 decimal places, e.g. 1,525.) NPV Otis forklift $enter a dollar amount rounded to 0 decimal places Craigmore Forklifts $enter a dollar amount rounded to 0 decimal places Determine which forklift system should be purchased. select the forklift system forklift…
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Please see attached
A nursery would like to build another commercial greenhouse to expand its operations. It estimates that building another greenhouse will cost $180,000. To operate another greenhouse, the nursery estimates an additional labor and utilities will cost $30,000 per year. The greenhouse is expected to produce an additional $60,000 of revenue at the end of year 1; this revenue is expected to increase by $10,000 each year. Choose a cash flow diagram.
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when answering the question please type out all of your work
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