The Pan American Bottling Company is considering the purchase of a new machine that would increase the speed of bottling and save money. The net cost of this machine is $70,000. The annual cash flows have the following projections. Use Appendix B and Appendix D for an approximate answer but calculate your final answer using the formula and financial calculator methods. Year 1 2 3 4 5 Cash Flow $ 38,000 40,000 36,000 30,000 13,000 a. If the cost of capital is 12 percent, what is the net present value of selecting a new machine? Note: Do not round intermediate calculations and round your final answer to 2 decimal places. Net present value

The Pan American Bottling Company is considering the purchase of a new machine that would increase the speed of bottling and save money. The net cost of this machine is $70,000. The annual cash flows have the following projections. Use Appendix B and Appendix D for an approximate answer but calculate your final answer using the formula and financial calculator methods. Year 1 2 3 4 5 Cash Flow $ 38,000 40,000 36,000 30,000 13,000 a. If the cost of capital is 12 percent, what is the net present value of selecting a new machine? Note: Do not round intermediate calculations and round your final answer to 2 decimal places. Net present value

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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Consolidated Aluminum is considering the purchase of a new machine that will cost $308,000 and provide the following cash flows over the next five years: $88,000, 92,000, $91,000, $72,000, and $71,000. What is the internal rate of return (IRR) for this piece of equipment? Use the Present Value tables in Time Value of Money Appendix e of the book or use Excel to calculate the answer. Round to 2 decimal places. O Cannot be determined from the information provided. O 11.30% O 11.28% O 11.00%
Ronnie's Coffee House is considering a project which will produce sales of $6,000 and increase cash expenses by $2,500. If the project is implemented, taxes will increase by $1,300. The additional depreciation expense will be $1,000. An initial cash outlay of $2,000 is required for net working capital. What is the amount of the operating cash flow using the top - down approach? Question 23 Select one: a. $4,200 b. $3,500 c. $2,200 d. $1,500 e. $200
X-treme Vitamin Company is considering two investments, both of which cost $34,000. The cash flows are as follows: $ 36,000 Project B $ 34,000 16,000 18,000 16,000 10,000 Use Appendix B for an approximate answer but calculate your final answer using the formula and financial calculator methods. a-1. Calculate the payback period for Project A and Project B. Note: Round your answers to 2 decimal places. Year Project A 1 2 3 Project A Project B a-2. Which of the two projects should be chosen based on the payback method? Project A O Project B Payback Period year(s) year(s) b-1. Calculate the net present value for Project A and Project B. Assume a cost of capital of 12 percent. Note: Do not round intermediate calculations and round your final answers to 2 decimal places. Project A Project B Net Present Value
Dowling Sportwear is considering building a new factory to produce baseball bats. The project will require an initial outlay of $ 8,000,000 and will generate annual net cash inflows of $ 2,000,000 per year for 6 years. Calculate the project's Net Present Value (NPV) assuming a 9% discount rate: a. $871,837 b. $971,837 c. $6,000,000 d. $4,000,000
Be fast plz
Calculating IRR, payback, and a missing cash flow. the merriweather printing company is trying to decide on the merits of constructing a new publishing facility. The project is expected to provide a series of positive cash flows for each of the next four years. The estimated cash flows associated with this project are as follows. year. Project cash flows 0 ? 1 $780,000 2 $420,000 3 $310,000 4 $480,000 if you know that the project has a regular payback of 2.6 years, what is the project's IRR?
Answer with calculation and explanation pls
Please give me answer very fast in 5 min saur
Dogwood Company is considering a capital investment in machinery: (Click the icon to view the data.) 8. Calculate the payback. 9. Calculate the ARR. Round the percentage to two decimal places. 10. Based on your answers to the above questions, should Dogwood invest in the machinery? 8. Calculate the payback. Amount invested Expected annual net cash inflow Payback 1,500,000 24 500,000 3 years 9. Calculate the ARR. Round the percentage to two decimal places. Average annual operating income Average amount invested ARR Data Table Initial investment $ 1,500,000 Residual value 350,000 Expected annual net cash inflows 500,000 Expected useful life 4 years Required rate of return 15%
Home Security Systems is analyzing the purchase of manufacturing equipment that will cost $56,000. The annual cash inflows for the next three years will be: Year 1 2 3 Cash Flow $ 28,000 26,000 21,000 Use Appendix B and Appendix D for an approximate answer but calculate your final answer using the financial calculator method. a. Determine the internal rate of return. Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Internal rate of return %
Management of Wildhorse, Inc., is considering switching to a new production technology. The cost of the required equipment will be $4,000,000. The discount rate is 11 percent. The cash flows that management expects the new technology to generate are as follows. Years 1-2 3-5 6-9 CF 0 $750,000 $1,450,000 a. Compute the payback and discounted payback periods for the project. (Round answers to 2 decimal places, e.g. 15.25.) The payback for the project is The NPV of the project is $ years, and the discounted payback period is b. What is the NPV for the project? Should the firm go ahead with the project? (Enter negative amounts using negative sign e.g. -45.25. Do not round discount factors. Round intermediate calculations to O decimal places, e.g. 1,525 and final answer to O decimal places, e.g. 5,125.) The IRR of the project is , and using the NPV rule the project should be c. What is the IRR, and what would be the decision based on the IRR? (Round answer to 3 decimal places, e.g.…
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