Periods 1 2 Present Value of $1 Present Value of an Annuity at 10% of $1 at 10% 0.9091 0.8264 0.7513 0.6830 0.9091 1.7355 2.4869 3.1699
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- Garnette Corp is considering the purchase of a new machine that will cost $342,000 and provide the following cash flows over the next five years: $99,000, $88,000, $92,000. $87,000, and $72,000. Calculate the IRR for this piece of equipment. For further instructions on internal rate of return in Excel. see Appendix C.Pahy is considering the purchase of... Poe Company is considering the purchase of new equipment costing $80,000. The projected annual cash inflows are $30,200, to be received at the end of each yea machine has a useful life of 4 years and no salvage value. Poe requires a 10% return on its investments. The present value of an annuity of $1 and present value of an annuity for different periods are presented below. Compute the net present value of the machine (rounded to the nearest whole dollar). Periods 1 2 3 4 Present Value of $1 at 10% 0.9091 0.8264 0.7514 0.6830 Present Value of an Annuity of $1 at 10% 0.9091 1.7355 2.4869 3.1699 HelpPoe Company is considering the purchase of new equipment costing $85,500. The projected annual cash inflows are $35,700, to be received at the end of each year. The machine has a useful life of 4 years and no salvage value. Poe requires a 10% return on its investments. The present value of an annuity of 1 and present value of an annuity for different periods is presented below. Compute the net present value of the machine. Periods Present Value of 1 at 10% Present Value of an Annuity of 1 at 10% 1 0.9091 0.9091 2 0.8264 1.7355 3 0.7513 2.4869 4 0.6830 3.1699 $45,409. $14,857. $27,665. $(14,857). $(27,665).
- Grady Corp. is considering the purchase of a new piece of equipment. The equipment costs $50,700, and will have a salvage value of $5,070 after six years. Using the new piece of equipment will increase Grady's annual cash flows by $6110. Grady has a hurdle rate of 13%. (Future Value of $1, Present Value of $1, Future Value Annuity of $1, Present Value Annuity of $1.) (Use appropriate factor from the PV tables.) a. What is the present value of the increase in annual cash flows? (Round your answer to 2 decimal places.) Present Value b. What is the present value of the salvage value? (Round your answer to 2 decimal places.) Present Value c. What is the net present value of the equipment purchase? (Negative value should be indicated by a minus sign. Round your intermediate calculation and final answer to 2 decimal places.) Net Present ValueA company is considering the purchase of new equipment for $99,000. The projected annual net cash flows are $38,800. The machine has a useful life of 3 years and no salvage value. Management of the company requires a 8% return on investment. The present value of an annuity of $1 for various periods follows: Period 1 Present value of an annuity of $1 at 8% 2 0.9259 1.7833 3 2.5771 What is the net present value of this machine (rounded to the nearest whole dollar) assuming all cash flows occur at year-end? Multiple Choice $33,000 $4,800 $991 $37,800 $97,414Bassinger Company plans to buy a new machine for $60,000 that will have an estimated useful life of 3 years and no salvage value. The expected cash inflow is $24,000 annually. Bassinger Company has a cost of capital of 12%. Given that the present value of $1 after 3 periods at 12% is 0.71178, and the present value of an annuity for 3 periods at 12% is 2.40183, the profitability index is: 000 0.04 1.96 1.04 0.28 0.96
- Mini Inc. is contemplating a capital project costing $47,019. The project will provide annual cost savings of $18,501 for 3 years and have a salvage value of $3,000. The company's required rate of return is 10%. The company uses straight-line depreciation. Present Value of an Annuity of 1 Period Present Value of 1 at 10% Present Value of an Annuity of 1 at 10% 1 .909 .909 .826 1.736 3 .751 2.487 Calculate the Net Present Value. Round your answer to 2 decimal places.Acme Company is considering an investment in a project that requires an initial investment of $64,650, generates annual net cash inflows of $8,500, and has an economic life of 15 years and no salvage value. Use the present value of an annuity table to determine the internal rate of return of this investment. 8% 10% 12% 14%Malone Corp. is considering the purchase of a new piece of equipment. The cost savings from the equipment would result in an annual increase in cash flow of $24330. The equipment will have an initial cost of $154350 and have a 5-year life. The salvage value of the equipment is estimated to be $21260 Factors to use for n-5.1-8% (DO NOT USE ANY OTHER FACTORS OR EQUATIONS) Future Value of an Annuity of $1 5.8666 Future Value of $1 1,4693 3.9927 0.6806 Present Value of an Annuity of $1 Present Value of $1 If the hurdle rate is 8%, what is the approximate not present value? Ignore income taxes
- Turrican Ltd is considering whether to purchase a new machine. It will cost $440,000 to purchase and $20,000 to install. It is expected to generate additional annual revenues of $90,000 per year for eight years, at which time it will have no further use or value. The machine will cost an additional $5,000 in electricity to run. The company's required rate of return is 7% (the present value of an annuity of eight years at 7% is 5.97). Ignore depreciation for this question. Ignore taxes for this question. Required: (a) What is the payback period? Show calculations. (b) What is the cash flow in year zero? (c) What is the annual cash flow for years 1 - 8? (d) What is the NPV of this investment? (e) Should the company accept this project? Why or why not?An investment of $20,000 for a new condenser is being considered. Estimated salvage value of the condenser is $5,000 at the end of an estimated life of 6 years. Annual income each year for the 6 years is $8,500. Annual operating expenses are $2,300. Assume money is worth 15% compounded annually. Determine the external rate of return and whether or not the condenser should be purchased.The management of Charlton Corporation is considering the purchase of a new machine costing $580,000. The machine is expected to have a useful life of 10 years and no residual value, and an annual net cash inflow of $105,000. Determine the project's internal rate of return, using the Tİ BẢII Plus calculator (Round to 2 decimal places).