Payback, Accounting Rate of Return, Net Present Value, Internal Rate of Return Follow the format shown in Exhibit 12B.1 and Exhibit 12B.2 as you complete the requirement below. Blaylock Company wants to buy a numerically controlled (NC) machine to be used in producing specially machined parts for manufacturers of trenching machines. The outlay required is $800,000. The NC equipment will last five years with no expected salvage value. The expected after-tax cash flows associated with the project follow: Year Cash Revenues Cash Expenses 1 $1,600,000 $1,200,000 2 1,600,000 1,200,000 3 1,600,000 1,200,000 4 1,600,000 1,200,000 5 1,600,000 1,200,000 Required: Compute the investment's Net Present Value, assuming a required rate of return of 8 percent. Round present value calculations and your final answer to the nearest dollar. NPV = $fill in the blank 1
Payback, Accounting Rate of Return, Net Present Value, Internal Rate of Return Follow the format shown in Exhibit 12B.1 and Exhibit 12B.2 as you complete the requirement below. Blaylock Company wants to buy a numerically controlled (NC) machine to be used in producing specially machined parts for manufacturers of trenching machines. The outlay required is $800,000. The NC equipment will last five years with no expected salvage value. The expected after-tax cash flows associated with the project follow: Year Cash Revenues Cash Expenses 1 $1,600,000 $1,200,000 2 1,600,000 1,200,000 3 1,600,000 1,200,000 4 1,600,000 1,200,000 5 1,600,000 1,200,000 Required: Compute the investment's Net Present Value, assuming a required rate of return of 8 percent. Round present value calculations and your final answer to the nearest dollar. NPV = $fill in the blank 1
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Payback, Accounting
Follow the format shown in Exhibit 12B.1 and Exhibit 12B.2 as you complete the requirement below.
Blaylock Company wants to buy a numerically controlled (NC) machine to be used in producing specially machined parts for manufacturers of trenching machines. The outlay required is $800,000. The NC equipment will last five years with no expected salvage value. The expected after-tax
| Year | Cash Revenues | Cash Expenses |
| 1 | $1,600,000 | $1,200,000 |
| 2 | 1,600,000 | 1,200,000 |
| 3 | 1,600,000 | 1,200,000 |
| 4 | 1,600,000 | 1,200,000 |
| 5 | 1,600,000 | 1,200,000 |
Required:
Compute the investment's Net Present Value, assuming a required rate of return of 8 percent. Round present value calculations and your final answer to the nearest dollar.
NPV = $fill in the blank 1
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