Giant Machinery Ltd is considering to invest in one of the two following Projects to buy a new equipment. Each project will last 5 years and have no salvage value at the end. The company’s required rate of return for all investment projects is 9%. The cash flows of the projects are provided below.   project 1 project 2 cost 175000 185000 future cash flows     year 1 76000 87000 year 2 83000 78000 year 3 67000 69000 year 4 65000 65000 year 5 55000 57000 Required: a) Identify which project should the company accept based on NPV method.  (Note: Please round up the result of each calculation of PV to 2 decimal places only for simplification) b) Identify which project should the company accept based on simple pay back method if the payback criteria is maximum 2 years.  c) Which project Giant Machinery should choose if two methods are in conflict.

Bunnings Ltd is considering to invest in one of the two following projects to buy a new equipment. Each equipment will last 5 years and have no salvage value at the end. The company’s required rate of return for all investment projects is 8%. The cash flows of the projects are provided below.   Equipment 1 Equipment 2 Cost $186000 $195000 Future Cash Flow     Year 1 86000 97000 Year 2 93000 84000 Year 3 83000 86000 Year 4 75000 75000 Year 5 55000 63000 Required:a) Identify which option of equipment should the company accept based on Profitability Index? b) Identify which option of equipment should the company accept based on discounted pay back method if the payback criterion is maximum 2 years?

Bunnings Ltd is considering to invest in one of the two following projects to buy a newequipment. Each equipment will last 5 years and have no salvage value at the end. Thecompany’s required rate of return for all investment projects is 8%. The cash flows of theprojects are provided below.Equipment 1 Equipment 2Cost $186,000 $195,000Future Cash FlowsYear 1Year 2Year 3Year 4Year 586 00093 00083 00075 00055 00097 00084 00086 00075 00063 000Required:a) Identify which option of equipment should the company accept based onProfitability Index? b) Identify which option of equipment should the company accept based ondiscounted pay back method if the payback criterion is maximum 2 years?   Do not use excel calculations

A company that manufactures magnetic flow meters expects to undertake a project that will have the cash flows estimated. First cost, $ -810,000 Equipment replacement cost in year 2, $ -300,000 Annual operating cost, $/year Salvage value, $ Life, years -860,000 250.000 4 an interest rate of 10% per year, what is the equivalent annual cost of the project? Find the AW value using tabulated factors. e equivalent annual cost of the project is $-820000

Bunnings Ltd is considering to invest in one of the two following projects to buy a new equipment. Each equipment will last 5 years and have no salvage value at the end. The company’s required rate of return for all investment projects is 8%. The cash flows of the projects are provided below.     Equipment 1 Equipment 2 Cost $186,000 $195,000 Future Cash Flows Year 1 Year 2 Year 3 Year 4 Year 5   86 000 93 000 83 000 75 000 55 000   97 000 84 000 86 000 75 000 63 000   Required: 1. Identify which option of equipment should the company accept based on Profitability Index? 2. Identify which option of equipment should the company accept based on discounted pay back method if the payback criterion is maximum 2 years?