The manager of a canned food processing plant is trying to decide between two labellingmachines.a) Construct the incremental net cash flow table for each year.b) Determine the number of positive roots for the incremental cash flow.c) Determine the rate of return for the incremental cash flow based on PW analysis.d) Determine which machine should be selected. Use MARR of 20% per year.Please enter your final answers below in addition to uploading your detailed answer to yourprofessor MS Teams after the exam.Machine 1 Machine 2First Cost $15.00025,000Annual Operating Cost $ per year-1,600-4003,0004,000Salvage Value $4Life, years

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Answered: The manager of a canned food processing…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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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
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