Assume that a company is considering purchasing a machine for $50,500 that will have a five-year useful life and no salvage value. The machine will lower operating costs by $17,000 per year. The company's required rate of return is 18%. The profitability index for this investment is closest to: Click here to view Exhibit 128-1 and Exhibit 12B-2, to determine the appropriate discount factor(s) using the tables provided.

Baird Rentals can purchase a van that costs $110,000; it has an expected useful life of five years and no salvage value. Baird uses straight-line depreciation. Expected revenue is $40,425 per year. Assume that depreciation is the only expense associated with this Investment. Required a. Determine the payback period. Note: Round your answer to 1 decimal place. b. Determine the unadjusted rate of return based on the average cost of the investment. Note: Round your answer to 1 decimal place. (l.e., .234 should be entered as 23.4). a. Payback period b. Unadjusted rate of return years %

The management of Zesty Corporation is considering the purchase of a new machine costing $400,000. The company's desired rate of return is 10%. The present value factors for $1 at compound interest of 10% for Years 1 through 5 are 0.909, 0.826, 0.751, 0.683, and 0.621, respectively. In addition to the foregoing information, use the following data in determining the acceptability in this situation: Year OperatingIncome Net CashFlow 1 $100,000      $180,000      2 40,000      120,000      3 20,000      100,000      4 10,000      90,000      5 10,000      90,000      The cash payback period for this investment is

An investment that costs $22,500 will produce annual cash flows of $4,500 for a period of 6 years. Further, the investment has an expected salvage value of $2,750. Given a desired rate of return of 9%, what will the investment generate? (PV of $1 and PVA of $1) Note: Use appropriate factor(s) from the tables provided. Do not round your intermediate calculations. Round your answer to the nearest whole dollar.

The management of Arkansas Corporation is considering the purchase of a new machine costing $490,000. The company's desired rate of return is 10%. The present value factors for $1 at compound interest of 10% for 1 through 5 years are 0.909, 0.826, 0.751, 0.683, and 0.621, respectively. In addition to the foregoing information, use the following data in determining the acceptability of this investment: Year Operating Income 1 2 3 4 5 $100,000 40,000 40,000 10,000 10,000 Net Cash Flow $180,000 120,000 100,000 90,000 120,000 The net present value for this investment is

Assuming monetary benefits of a construction project at $50,000 per year, one-time costs (initial investment) of $15,000, recurring costs of $35,000 per year, a discount rate of 10 per cent, and a 4-year time horizon, calculate the net present value (NPV) of an information system's costs and benefits. Calculate the overall return on investment (ROI) of the project. During which year does break-even occur?   Use the NPV template provided (modify to suit your answer) and clearly display the NPV, ROI, and year in which payback occurs.   Write a paragraph explaining whether you would recommend investing in this project based on your financial analysis. Explain your answer referring to the NPV, ROI and payback for this project.   Discount Rate (10%) Year 0 - 1.0000 Year 1 -    .9091 Year 2 -    .8264 Year 3 -    .7513 Year 4 -    .6830

Mayberry, Inc., is considering a design change that will cost $6,000 and will result in an annual savings of $1,000 per year for the 6-year life of the project. A cost of $2,000 will be avoided at the end of the project as a result of the change. MARR is 8%/year. a. What is the annual worth of this investment? b. What is the decision rule for judging the attractiveness of investments based on annual worth? c. Should Mayberry implement the design change?

Keeper Inc. is considering the purchase of new equipment that will automate production and thus reduce labor costs. Keeper made the following estimates related to the new machinery: (Click the icon to view the information.) Present Value of $1 table Present Value of Annuity of $1 table Future Value of $1 table Future Value of Annuity of $1 table Read the requirements. Requirement 1. Calculate (a) net present value, (b) payback period, (c) discounted payback period, and (d) internal rate of return. a. Net present value. (Round intermediary calculations to the nearest whole dollar. Use factors to three decimal places, X.XXX, and use a minus sign or parentheses for a negative net present value. Enter the net present value of the investment rounded to the nearest whole dollar.) The net present value is $ 40,275 b. Payback period. (Round your answer to two decimal places.) The payback period in years is 4.79 c. Discounted payback period. (Round interim calculations to the nearest whole…

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Three alternatives have the following cost and annual benefit data associated with them: The loan payments are calculated using an interest rate of 10%, a life equal to the life of the machine, and a down payment of 30%. Use a MARR of 12% and determine which machine, if any, should be purchased. Use incremental rate of return for your analysis. Do not forget to use DN in the analysis.