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- First Choice Carpets is considering purchasing new weaving equipment costing $730,000. The company's management has estimated that the equipment will generate cash inflows as follows: Year 1 $204,000 2 $204,000 3 $266,000 4 $266,000 5 $150,000 Considering the residual value is zero, calculate the payback period. (Round your answer to two decimal places.) A. 3.70 years B. 4.61 years C. 3.42 years D. 3.21 yearsConsider the following two machines a company can purchase. The following table provides the costs of the machines and the annual cash flows obtained from the machines over their lifetimes. Machine A Initial Cost $19,000 Cash Inflows per year Years of Service Machine B $9,000 $6,000 $10,000 6 5 The discount rate is 7%. What is the net present value for each machine? Machine A Number Machine B = Number Click "Verify" to proceed to the next part of the question. This question has 3 parts (i.e., you will need to click "verify" 3 times)A. Paramount Carpets Company is considering purchasing new equipment costing $700,000. The company's management has estimated that the equipment will generate cash flows as follows: Net Cash Flow $200,000 200,000 250,000 Year 1 2 3 4 250,000 5 150,000 Considering the residual value is zero, calculate the payback period.
- 1. Use the information below for the next two questions. Leaky Pipe Inc. is considering a new machine for its largest product line. The cash flows Lastalled Purchase Price S40, 000 Roduced Cost of Materials S 6,000 per year Labor Savings S9, 000 per year locrease in Working Capital $5, 000 (for Year 0 and I only) Depreciable Life (zero salvage value) 4 years Economic Life 8 years Required Return 12% Tax Rate 40% a . What is the NPV of this machine if it does not replace any other?. b. Suppose the machine replaces another machine with the following characteristics: Book Value of Old Machine $6.000 Market Value of Old Machine $4,000 Remaining Depreciable Life of Old Machine 6years Assume the old machine was not expected to have any salvage value and compute the NPV of the New Machine.Octavia Bakery is planning to purchase one of two ovens. The expected cash flows for each oven are shown below. MARR is 8% / year. Initial Investment Estimated Life End of Life Salvage Annual Income Annual Expense Part a Model 127B $50,000 Part b 10 $10,000 $19.400 $10,000 Your answer is correct. Model 334A $80,000 5 Your answer is partially correct. $0 What is the discounted payback period for Model 127B? $26,000 $6,000 Round entry to two decimal places. The tolerance is ±0.02. eTextbook and Media What is the discounted payback period for Model 334A? Is the DPBP greater than the planning horizon? No V Round entry to two decimal places. The tolerance is ±0.02. 7.18 years 5.10 years Attempts: 1 of 3 usedX-treme Vitamin Company is considering two investments, both of which cost $10,000. The cash flows are as follows: NOTE: you must show your work for ALL steps for full credit. Year Proj A Proj B 1 $ 12,000.00 $10,000.00 2 $8,000.00 $6,000.00 3 $ 6,000.00 $16,000.00 a. Which of the two projects should be chosen based on the payback method b. Which of the two projects should be chosen based on the net present value method? Assume a cost of capital of 10 percent. c. Should a firm normally have more confidence in answer a or answer b.
- The management of Charlton Corporation is considering the purchase of a new machine costing $460,000. The company's desired rate of return is 6%. In addition to the foregoing information, use the following data in determining the acceptability in this situation: Income from Operations $20,000 20,000 Net Cash Flow $95,000 95,000 95,000 95,000 95,000 Year 1 3. 20,000 20,000 20,000 4 The cash payback period for this investment is: O4 years O 4.8 years O 23 years The project will never recover the invested cashMNO company is evaluating a proposal for purchase of equipment which will cost $180,000. The cash inflows from the use of equipment is given below: Year Cash flow $60,000 $40,000 $70,000 $125,000 $35,000 4. Payback period for the proposal is: a. 3 years b. 2 years c. 4 years d. 3.08 years DELL 123 45Four alternative designs are being considered for a pet-exercising treadmil. The company's MARR is 18% The cash flows associated with each are given in the following table. The Judas The Lancelot The Bella The Lilo Capital Investment Annual Revenues Annual Expenses Refurbish at EOY S Market Value after 10 years $120,000 $50.000 $130,000 S50,000 $141,000 $50.000 $160,000 $50.000 514,000 $15000 $15,000 $20,000 $15,000 $13,000 $23,000 $4.000 $23,000 $4,000 218% $18.000 $5,000 216% 17.7% Here are various interest tables you can use to look up factor values 10.Intecest Table 12%. Jnterest. Jatiei 15%.laterest.Table i 18%.loterest.Table & 20 InterestJable 25% Jatecest Tatle D Question 1 Use the trial and errar method combined with linear interpolation to solve for the IRR of The Judas design (to one decimal place. XXXM). In your supporting work, clearly state why you chose each interest rate to try. D Question 2 Compute the FW tuture worth) of The Lancelot Remember to include vour…
- A business is considering purchasing a piece of new equipment for $200,000. The equipment will generate the following revenues: Year 1: $50,000 Year 2: $50,000 Year 3: $50,000 Year 4: $50,000 The machine can be sold at the end of the year four for $25,000. Assume a discount for 8%. 1. What is the net present value (NPV)? Select one: A. -7890.99 B. 7899.99 C. -8,667.61 D. 9100.54 2. A business is considering purchasing a piece of new equipment for $200,000. The equipment will generate the following revenues: Year 1: $50,000 Year 2: $50,000 Year 3: $50,000 Year 4: $60,000 The machine can be sold at the end of the year for $25,000. Assume a discount of 8%. What is the compounded raturn (IRR) for this project?Question1: A company is planning to purchase a new machine to expand the range of its products. There are two brands available in the market: A and B. Both machines are costing 70,000 OMR. The cash inflows given in the table are expected to be generated by both machines. Based on NPV and IPP, identify the better machine if the discounting rate is 7.5% and write aconclusion. Year Machine A Machine B 1 12000 13100 2 14200 13900 3 16100 15800 4 19000 18600 5 21700 20000 6 22200 22800Motor City Productions sells original automotive art on a prepaid basis as each piece is uniquely designed to the customer's specifications. For one project, the cash flows are estimated as follows. Based on the internal rate of return (IRR), should this project be accepted if the required return is 9 percent? Year Cash flow 0 $5500 1 -$5900 (Hint: You may or may not be able to use the simple default IRR rule) (a) IRR is 7.27%. Accept the project. (b) IRR is 7.27%. Reject the project. (c) IRR is 9%. Accept the project. (d) IRR is 9%. Reject the project.