Current Attempt in ProgressThe Management of Carla Vista Manufacturing Company is evaluating two forklift systems to use in its plant that produces the towersfor a windmill power farm. The costs and the cash flows from these systems are shown below. The company uses a 10 percent discountrate for all projects.Year 0DYear 1Year 2Year 3Otis Forklifts$-3,138,450$974,225$1,362,886$2,112,497Craigmore Forklifts$-4,128,410 $876,236 $1,766,225$2,853,110NPVOtis forklift$460,711Craigmore Forklifts$271,442Compute the IRR for each of the two systems. (Round intermediate calculation to O decimal places, e.g. 1,525 and final answers to 2 decimalplaces, e.g. 15.10%.)Otis forkliftCraigmore ForkliftsIRR%%Is the investment decision different from the one determined by NPV?The investment decision iseTextbook and Mediafrom the one determined by NPV.Save for LaterUsing multiple attempts will impact your score.20% score reduction after attempt 2Q SearchAttempts: 0 of 3 usedSubmit Answer

Step 1: The calculation of the IRR ABC1YearOtis forkliftCraigmore forklift20 $ -3,138,450 $…

Answered: Current Attempt in Progress The…

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter12: Capital Investment Analysis

Section: Chapter Questions

Problem 5E: Cash payback period for a service company Janes Clothing Inc. is evaluating two capital investment...

See similar textbooks

Similar questions

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…
Premium Manufacturing Company is evaluating two 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. If the company uses a 10 percent discount rate for all projects, determine which forklift system should be purchased using the net present value (NPV) approach. Also, Compute the IRR and Payback Period for each of the two systems. System 1 System 2 Year 0 Year 1 Year 3 Year 2 $1,358,886 -$4,123,450 $1,979,225 $2,111,497 -$5,137,410 $1,875,236 $1,765,225 $2,865,110
ic Yo NS io cer ist bun ngs nnée Current Attempt in Progress Blossom Manufacturing Co. is evaluating two projects. The company uses payback criteria of three years or less. Project A has a cost of $905,000, and project B's cost is $1,247,300. Cash flows from both projects are given in the following table. Year 1 2 3 4 Project A $86,212 313,562 427,594 285,552 Project B $586,212 413,277 231,199 What are their discounted payback periods? (Round answers to 2 decimal places, e.g. 15.25. If discounted payback period exceeds life of the project, enter 0.00 for the answer.) Discounted payback period of project A Discounted payback period of project B will he accepted with a discount rate of 8 percent? átv zoom
TOPIC: ANNUITIES INSTRUCTION: SHOW COMPLETE SOLUTION WITH CORRESPONDING CASH FLOW DIAGRAM AND BOX THE FINAL ANSWER Hydroklean, an environmental soil cleaning company, borrowed P3.5M to finance start-up costs for a site reclamation project. How much must the company receive every six months in revenue to earn a rate of return of 15% compounded semiannually for the 5-year project period?
MAIN PROJECT Szabist University is considering investing in an online book ordering and information service, which will be managed by 2 employees. The following estimates relate to the costs of starting the service and the subsequent revenues from it. The initial investment needed to start the service, including the installation of additional phone lines and computer equipment, will be $1,000,000. These investments are expected to have a life of 4 years with 0 salvage value.The investments will be depreciated straight line over the four-year life.The revenues in the first year are expected to be $1500,000, growing 20% in year 2, and 10% in the two years following.The salaries and other benefits for the employees are estimated to be $150,000 in year 1, and grow 10% a year for the following three years.The cost of the books is assumed to be “0.60” of the revenues in each of the four years.The non-cash working capital, which includes the inventory of books needed for the service and the…
Alpha Bridge Project SUMMARY OF BRIDGE REPAIR COSTS Year Activity Cost GH¢ 2005 Inspection and top chord repairs 44,800 2007 Inspection and erosion protection 19,800 2009 Inspection 1,800 2011 Inspection and misc. steel repairs 31,800 2013 Inspection 1,800 2015 Inspection 1,800 2017 Inspection and repair abutments 65,000 2019 Inspection 1,800 Calculate the present value of the costs for the above project cash flow with a discounting rate of 5%
when answering the question please type out all of your work
Required information (The following information applies to the questions displayed below] A local farming company is considering an investment in equipment with a useful life of five years and no salvage value. The company's discount rate is 14%. The project would provide net operating Income in each of five years as follows: Sales Variable expenses $2,867,000 1,125,000 Contribution margin 1,742,000 Fixed expenses: Advertising, salaries, and other fixed out-of-pocket costs Depreciation $706,000 571,000 Total fixed expenses Net operating income 1,277,000 $ 465,000 Click here to view Exhibit 148-1 and Exhibit 148-2. to determine the appropriate discount factor(s) using table. What is the present value of the project's annual net cash inflows? (Round your final answer to the nearest whole dollar amount.) Present value
Jim Jones Sleepaway Camps, Inc. is looking for some payback period analysis for a new project in Janestown, Indiana. Suppose that the cost of acquiring the new camp, buildings, cabins, etc. and setting up trails and activities has an initial cost of $1.3M dollars but will generate the following cash-flows for the next four years: Year 1 $450,000 Year 2 $610,000 Year 3 $464,000 Year 4 $575,000 What is the payback period for this project
The line incorporate is considering a new piece of equipment that cost $60,000 the company can get 6000 for the trading on their old machine follow is financial data relevant to the new machine $24,000 revenue of $13,000 cash expenses peaceful life eight years appreciation expense $5500 per year internal rate of return is approximately
Should WMM lease or construct their own production facility Option 1: Construct Costs to incur: Actual expenditure towards buying land, construct building and getting ready for use $ 500,000Taxes, insurance, and repairs (per year) $ 20,000Intended years of use 18Projected market value in 18 years $ 1,000,000 Budgeted maximum expenditure towards buying land, construction of building and getting ready for use. $ 500,000Remainder in four payments of; $ 175,000Option 2: LeaseIntended years of use 18First lease payment due now $ 100,000Rest of the lease payments…
DuraTech Manufacturing is evaluating a process improvement project. The estimated receipts and disbursements associated with the project are shown below. MARR is 6%/year. Solve, a. What is the present worth of this investment? b. What is the decision rule for judging the attractiveness of investments based on present worth? c. Should DuraTech implement the proposed process improvement?

SEE MORE QUESTIONS

Recommended textbooks for you

Managerial Accounting

Accounting

ISBN:

9781337912020

Author:

Carl Warren, Ph.d. Cma William B. Tayler

Publisher:

South-Western College Pub

EBK CFIN

Finance

ISBN:

9781337671743

Author:

BESLEY

Publisher:

CENGAGE LEARNING - CONSIGNMENT

EBK CONTEMPORARY FINANCIAL MANAGEMENT

Finance

ISBN:

9781337514835

Author:

MOYER

Publisher:

CENGAGE LEARNING - CONSIGNMENT

Managerial Accounting

Accounting

ISBN:

9781337912020

Author:

Carl Warren, Ph.d. Cma William B. Tayler

Publisher:

South-Western College Pub

EBK CFIN

Finance

ISBN:

9781337671743

Author:

BESLEY

Publisher:

CENGAGE LEARNING - CONSIGNMENT

EBK CONTEMPORARY FINANCIAL MANAGEMENT

Finance

ISBN:

9781337514835

Author:

MOYER

Publisher:

CENGAGE LEARNING - CONSIGNMENT

Principles of Accounting Volume 2

Accounting

ISBN:

9781947172609

Author:

OpenStax

Publisher:

OpenStax College

Intermediate Financial Management (MindTap Course…

Finance

ISBN:

9781337395083

Author:

Eugene F. Brigham, Phillip R. Daves

Publisher:

Cengage Learning

SEE MORE TEXTBOOKS