This question sir thnksss 678910Required:0.7050.5640.507 0.432 0.3350.665 0.513 0.452 0.376 0.2790.627 0.467 0.4040.3270.2330.5920,4240.361 0.284 0.1940.558 0.386 0.322 0.2470.1621a. Compute the average rate of return for each investment. If required, round your answer to one decimal place.Average Rate of ReturnRobotic AssemblerWarehouse14 X %Present value of net cash flowAmount to be invested14 X %1b. Compute the net present value for each investment. Use the present value of $1 table above. If required, round to the nearest dollar.Robotic AssemblerWarehouseNet present value2. Prepare a brief report for the capital investment committee, advising it on the relative merits of the two investments.The robotic assembler has a greater ✔net present value because greaterof the two projects can be accepted, the robotic assembler ✓would be the more attractive.cash flows occur earlier in time compared to the warehouse. Thus, if only one eBookShow Me HowAverage rate of return method, net present value method, and analysis for a service companyThe capital investment committee of Iguana Inc. is considering two capital investments. The estimated operating income and net cash flows from each investment are asfollows:Year1234Robotic AssemblerOperating IncomeYear12345678Robotic AssemblerNet Cash Flow$35,00025,00020,00015,00010,000$105,000$65,00055,00050,00045,00040,000Total$255,000Each project requires an investment of $150,000. Straight-line depreciation will be used, and no residual value is expected. The committee has selected a rate of 12% forpurposes of the net present value analysis.WarehouseOperatingIncome$21,00021,00021,00021,00021,000$105,000Present Value of $1 at Compound Interest6%10%12%15%20%0.943 0.9090.893 0.8700.8330.8900.8260.797 0.7560.6940.8400.751 0.7120.6580.5790.7920.6830.5720.4820.7470.6210.497 0.4020.564 0.507 0.4320.3350.7050.6650.513 0.452 0.3760.2790.6270.467 0.404 0.3270.2330.6360.567Warehouse -Net Cash Flow$51,00051,00051,000$1,00051,000$255,000

Introduction:-This question involves a capital investment analysis for two potential investments: a…

Robotic Assembler Year Operating Income 1 2 3 Total $35,000 25,000 20,000 15,000 10,000 $105,000 Robotic Assembler Net Cash Flow $65,000 55,000 50,000 45,000 40,000 $255,000 Warehouse Operating Income $21,000 21,000 21,000 21,000 21,000 $105,000 Warehouse Net Cash Flow $51,000 $1,000 $1,000 51,000 $1,000 $255,000 Each project requires an investment of $150,000. Straight-line depreciation will be used, and no residual value is expected. The committee has selected a rate of 12% for purposes of the net present value analysis.

Robotic Assembler Year Operating Income 1 2 3 Total $35,000 25,000 20,000 15,000 10,000 $105,000 Robotic Assembler Net Cash Flow $65,000 55,000 50,000 45,000 40,000 $255,000 Warehouse Operating Income $21,000 21,000 21,000 21,000 21,000 $105,000 Warehouse Net Cash Flow $51,000 $1,000 $1,000 51,000 $1,000 $255,000 Each project requires an investment of $150,000. Straight-line depreciation will be used, and no residual value is expected. The committee has selected a rate of 12% for purposes of the net present value analysis.

Fundamentals Of Financial Management, Concise Edition (mindtap Course List)

10th Edition

ISBN:9781337902571

Author:Eugene F. Brigham, Joel F. Houston

Publisher:Eugene F. Brigham, Joel F. Houston

Chapter16: Financial Planning And Forecasting

Section: Chapter Questions

Problem 2P: AFN EQUATION Refer to Problem 16-1. What additional funds would be needed if the companys year-end...

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Average rate of return method, net present value method, and analysis for a service company The capital investment committee of Iguana Inc. is considering two capital investments. The estimated operating income and net cash flows from each investment are as follows: Year Robotic AssemblerOperating Income Robotic AssemblerNet Cash Flow WarehouseOperating Income WarehouseNet Cash Flow 1 $47,500 $152,000 $100,000 $243,000 2 47,500 152,000 76,000 205,000 3 47,500 152,000 38,000 144,000 4 47,500 152,000 17,000 99,000 5 47,500 152,000 6,500 69,000 Total $237,500 $760,000 $237,500 $760,000 Each project requires an investment of $500,000. Straight-line depreciation will be used, and no residual value is expected. The committee has selected a rate of 15% for purposes of the net present value analysis. Year 6% 10% 12% 15% 20% 1 0.943 0.909 0.893 0.870 0.833 2 0.890 0.826 0.797 0.756 0.694 3 0.840 0.751 0.712 0.658 0.579 4 0.792 0.683 0.636 0.572 0.482 5 0.747…
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