For each of the following problems, (a) draw the cash flow diagram; (b) present clean and clear manual solutions to the problem; (c) highlight the final answer (only the final answer as required by the problem) by enclosing it within a box.   A project for a specialized product estimated to have a short market life has the following information. Use the PW method to determine the minimum amount of equivalent uniform annual revenue required to justify the project economically. First cost: $1,200,000 Cost of depreciable property: $500,000 Property class of depreciable property: GDS 3 years Annual O&M costs: %600,000 on the first year, increasing at a rate of 5% per year thereafter Selling price of depreciable property at the end of 3 years: $300,000 Income tax rate: 35%

In my accounting class I am learning to find accounting rate of return.  To solve for this I subtracted net cash flow- the salvage value divided by the initial investment.  Have I done something incorrect?

REQUIRED Use the information provided below to answer the following questions:   3.1. Calculate the Payback period for the HMC.   3.2. Calculate the Net Present Value for both the HMC and VMC.   3.3. Calculate the Internal Rate of Return (IRR) for the HMC and VMC.   3.4. Which configuration of the CNC machining centres should SMT purchase, if any? Motivate your answer by referring to the answers obtained in questions 3.3 and 3.4.   INFORMATION Southern Manufacturing Tools Limited (SMT) is considering the purchase of a Computer Numerical Control (CNC) machining centre for its operations. Two configurations of the CNC machining centres are available: horizontal CNC machining centre (HMC) and vertical CNC machining centre (VMC). Both the HMC and VMC will require an initial investment of R10 000 000, will have a useful life of 7 years and a residual value of R1 500 000. SMT uses the straight-line method of depreciation. The expected net cash inflows of the VMC are expected to be R2 100 000…

Define each of the following terms:b. Incremental cash flow; sunk cost; opportunity cost; externality; cannibalization; expansion project; replacement project

AMT, Inc., is considering the purchase of a digital camera for maintenance of design specifications by feeding digital pictures directly into an engineering workstation where computer-aided design files can be superimposed over the digital pictures. Differences between the two images can be noted, and corrections, as appropriate, can then be made by design engineers. Solve, a. You have been asked by management to determine the PW of the EVA of this equipment, assuming the following estimates: capital investment = $345,000; market value at end of year six = $120,000; annual revenues = $120,000; annual expenses = $8,000; equipment life = 6 years; effective income tax rate = 50%; and after-tax MARR = 10% per year. MACRS depreciation will be used with a five-year recovery period. b. Compute the PW of the equipment’s ATCFs. Is youranswer in Part (a) the same as your answer in Part (b)?

This is the problem. I need to do cash flow diagram , PW cost for each vendor, and which vendor would choose.

2.Which of the following are sunk costs for deciding whether to accept or reject a project? i.Payments for maintenance of a factory that would need to be made if the project is accepted.ii.The salaries of employees that would need to be hired to execute the new project.iii.Payments that were made to an economist to generate economic forecasts that were used when deciding whether to accept or reject the project.iv.The additional tax expenses that are expected to result from the profits of the new project. a.iii and iv, but not i or iib.ii and iii, but not i or ivc.iii onlyd.iv only

Which term is used to represent the sales level that results in a project's net income exactly equalling zero? Group of answer choices Cash breakeven Operational breakeven Present value breakeven Financial breakeven Accounting profit breakeven

Modified internal rate of return (MIRR) The IRR evaluation method assumes that cash flows from the project are reinvested at the same rate equal to the IRR. However, in reality the reinvested cash flows may not necessarily generate a return equal to the IRR. Thus, the modified IRR approach makes a more reasonable assumption other than the project’s IRR. Consider the following situation: Green Caterpillar Garden Supplies Inc. is analyzing a project that requires an initial investment of $2,225,000. The project’s expected cash flows are: Year Cash Flow Year 1 $350,000 Year 2 –125,000 Year 3 450,000 Year 4 450,000   Green Caterpillar Garden Supplies Inc.’s WACC is 7%, and the project has the same risk as the firm’s average project. Calculate this project’s modified internal rate of return (MIRR): -12.63%   26.46%   30.64%   29.24%     If Green Caterpillar Garden Supplies Inc.’s managers select projects based on the MIRR criterion,…

he IRR evaluation method assumes that cash flows from the project are reinvested at the same rate equal to the IRR. However, in reality the reinvested cash flows may not necessarily generate a return equal to the IRR. Thus, the modified IRR approach makes a more reasonable assumption other than the project’s IRR. Consider the following situation: Green Caterpillar Garden Supplies Inc. is analyzing a project that requires an initial investment of $3,000,000. The project’s expected cash flows are: Year Cash Flow Year 1 $275,000 Year 2 –150,000 Year 3 475,000 Year 4 400,000   Green Caterpillar Garden Supplies Inc.’s WACC is 8%, and the project has the same risk as the firm’s average project. Calculate this project’s modified internal rate of return (MIRR): 15.88%   14.21%   18.39%   -20.35%     If Green Caterpillar Garden Supplies Inc.’s managers select projects based on the MIRR criterion, they should    this independent project.…