First National Bank of Conway is considering installing two ATMs in its Southside branch. The new machines are expected to cost $37000 apiece. Installation costs will amount to about $15000 per machine. Each machine has a projected useful life of 10 years. Due to rapid growth in the Southside district, these two machines (combined) are expected to handle 50000 cash transactions per year. On average, each cash transaction is expected to save $0.30 in teller expenses. If First National has a 0.10 cost of capital, what is the NPV of this project?
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- A grocery store is considering the purchase of a new refrigeration unit with an Initial Investment of $412,000, and the store expects a return of $100,000 in year one, $72000 in years two and three, $65,000 in years four and five, and $38,000 in year six and beyond, what is the payback period?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.Your company is planning to purchase a new log splitter for is lawn and garden business. The new splitter has an initial investment of $180,000. It is expected to generate $25,000 of annual cash flows, provide incremental cash revenues of $150,000, and incur incremental cash expenses of $100,000 annually. What is the payback period and accounting rate of return (ARR)?
- A supermarket is planning on piloting a self- checkout system in one of its stores. It estimates that this requires an investment of about $500,000 to modify existing checkout lanes into self-checkout lanes. It also estimates that it will save $200,000 yearly in employee salaries by automating the checkout process. If the supermarket's MARR is at 10% per year compounded annually, determine the payback period (in years) for this pilot.A supermarket is planning on piloting a self-checkout system in one of its stores. It estimates that this requires an investment of about $500,000 to modify existing checkout lanes into self-checkout lanes. It also estimates that it will save $200,000 yearly in employee salaries by automating the checkout process. If the supermarket's MARR is at 10% per year compounded annually, determine the Conventional- payback period (in years) for this pilot.A telephone company is considering the purchase of a new central call management system. The new system will cost $ 2,100,000, 20% will be deducted annually. He estimates that the new system will be useful to him for 6 years. The new system will generate billing revenues of $ 920,000 per year and out-of-pocket operating costs of $ 400,000 per year. With the increase in sales, it will be necessary to invest in accounts receivable based on an annual rotation of 12 which will be recovered at the end of the project. At the end of the 6 years the equipment is estimated to have a sales value of $ 380,000. The company is subject to a tax rate of 40% and in case of losses these can be used to generate tax savings. Determine investment flows, annual operation and recovery.
- A small town in Ohio is considering the purchase of a new parking system that would enhance the collection of parking fees while providing additional convenience to shoppers. The hardware requires an immediate investment of $950. The town estimates that the new system will create an annual cash flow of $204 to be received at the end of each year, beginning in one year, for 7 consecutive years. And, in addition, the project will produce a terminal cash flow in year 8 of $304. What is the payback, in years, of the computer package?YearsPlace your answer in number of years, as an integer (whole number)Peach Co. spends $250,000 for a new catnip sorting machine. Peach Co. expects net cash inflows of $20,000 in the first year, $50,000 in the second year, and $25,000 over the following 10 years. What is the payback period? Round your answer to 2 d.p.Ventura Driving School is considering purchasing new autos costing $220,000. The company's management has estimated that the autos will generate cash inflows as follows: Year 1 $ 85,000 Year 2 $ 100,000 Year 3 $ 70,000 Year 4 $ 55,000 Considering the residual value is zero, calculate the payback period. Round to one decimal place. The payback in years is GELD
- Cow Chips, Incorporated, a large fertilizer distributor based in California, is planning to use a lockbox system to speed up collections from its customers located on the East Coast A Philadelphia-area bank will provide this service for an annual fee of $12,000 pald at the end of the year plus 5 cents per transaction. The estimated reduction in collection and processing time is one day. Treasury bills are currently yielding 5 percent per year, and there are 365 days per year. If the average customer payment in this region is $5,900, how many customers each day, on average, are needed to make the system profitable for Cow Chips? (Do not round Intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Number of customers per dayThe Hangover Diner is considering a project to build a new diner next to Saint Joseph's University with an initial cost of $555,000. Construction will take 2 years. The diner will open in year 3, so no cash will be received in the first 2 years. At the end of the third year, the diner expected to produce a cash inflow of $100,000. Starting in the fourth year the cash flows are expected to grow by 2.50% per year forever. What is the project's net present value today at a 15% discount rate? O -$22,711 $44,274 O $49,915 $58,552Knob, Inc., is a nationwide distributor of furniture hardware. The company now uses a central billing system for credit sales of $198.00 million annually. First National, Knob’s principal bank, offers to establish a new concentration banking system for a flat fee of $150,000 per year. The bank estimates that mailing and collection time can be reduced by four days. Assume a 360-day year. By how much will Knob’s cash balances be increased under the new system? (Enter your answer in dollars not in millions.) Assume that the borrowing rate is 12%. How much extra interest income will the new system generate if the extra funds are used to reduce borrowing under Knob’s line of credit with First National? (Enter your answer in dollars not in millions.) Calculate the total annual cost of the old system if collection costs under the old system are $45,000 per year? (Enter your answer in dollars not in millions.)